Game Changers

Located on the lower level of the resort, XS the Nightclub at Encore lives up to its name. The 40,000-square-foot club flows out from the stairway, all curves and opulence. Chandeliers throughout and more than 10,000 light sources illuminate the richly appointed space, which is adorned in gold, bronze, black and brown hues. Curvaceous female torsos along the side walls draw the eye; the sculptures’ concave gold leaf finish adding a sensuous element. The sunken dance floor — surrounded by gold crocodile-embossed leather booths and crowned with a 10-foot rotating chandelier — flows out to a pool ringed by private cabanas. An island bar appears to float on the water.

On a Saturday night, a long line of guests eagerly awaits entering the most expensive club ever built in Las Vegas. Inside, the dance floor throbs with exquisitely attired partiers; beautiful women take to the dance poles scattered throughout the club. Bottles of high-end spirits — Ketel One, Dom Perignon, Absolut, Patron, Grey Goose — are paraded to VIP tables by model-perfect cocktail servers. Tabs run from a few hundred to tens of thousands of dollars. One has to wonder, “Recession? What recession?”

Typically watching the action from a VIP booth are Cy and Jesse Waits, managing partners of XS and also Tryst at Wynn Las Vegas and Drai’s After Hours at Bill’s Gamblin’ Hall. Flanked by a bevy of beauties, the identical twins, whose playboy reputations are well-chronicled, may look like they’re enjoying themselves, but they’re actually working. In fact, putting in 20-hour days — or nights, as it were — the pair may be the hardest working guys in Vegas.

Together with Victor Drai, who co-owns Tryst and XS with the Wynn organization and heads up this powerhouse trinity, the Waits brothers oversee a nightlife empire. From the exclusive, edgy vibe of Drai’s After Hours — one of the first clubs to bring bottle service to Las Vegas, the intimate venue is a favorite of hip hop DJs and fans — to the game-changing opening of Tryst to the blockbuster debut of XS on New Year’s Eve, the trio has raised the bar on nightlife to an entirely new level. Together, the three clubs are expected to exceed $100 million in revenue in 2009, a figure unheard of in Vegas and unimaginable in today’s economy.

Exquisite club environs, attention to detail and high levels of guest service are supported by precise operational systems and a loyal staff that drive astronomical revenues, attributes that earned them the 2009 Operator of the Year Award from Nightclub & Bar. Tryst and Drai’s are also among the Nightclub & Bar 2009 Top 100, ranked at number 2 and 22, respectively. XS hosted the Top 100 Party, sponsored by Absolut, held during the Nightclub & Bar Convention and Trade Show in March.

Quick Ascent

Some might say the trio’s success originated in their simply being in the right place at the right time. Maybe so, but from that point, each brought his A-game: Drai playing in design and decor, Jesse Waits handling marketing and guest services and Cy Waits overseeing operations, although the brothers tag-team on many elements of the business.

Hollywood producer and restaurateur Victor Drai opened a French restaurant at what was then the Barbary Coast in Vegas in 1997. His entertainment friends from Los Angeles transformed the spot into an underground late night hangout. Drai enticed Jesse Waits to manage the front door in 2001. Waits had been working his way up at a variety of Vegas venues, including House of Blues. His personal approach to guest service and knack for generating word-of-mouth buzz attracted more business, and he was soon managing the club.

In 2005, hotel magnate Steve Wynn was looking to rescue the failing La Bete nightclub in his crown jewel, Wynn Las Vegas. Cued in that Drai’s was the insiders’ hot spot, he invited Drai to partner on a new concept for the subterranean space.

Working with Wynn executive vice president of design Roger Thomas, Drai undertook a $5 million redesign, opening the club to access Wynn’s 90-foot waterfall and adding 450 bottle service seats. Inside, rich cherry reds contrast the ebony sunken dance floor; Drai reconfigured the space to be brighter and allow for better traffic flow. “So many clubs are dark and difficult to move around in,” Drai explains. “When you go out, you want to see people, see the entire space and take it all in.”

Proving Ground

Realizing the magnitude of the business potential, Jesse Waits invited his brother to the party. Cy Waits had worked through stints at House of Blues, and then managed Tabu Ultra Lounge, where, like Jesse, he was a quick study of the nightlife business.

Tryst opened to rave reviews in December 2005; the threesome more than doubled the $18 million sales projection in the first year. Bottle service accounts for 75 percent of sales, and the profit margin hovers at 70 percent, more than twice the market norm. With “godfather” Drai behind them, the Waits became the golden boys of the Vegas strip.

For the all-suites Encore Resort, Wynn again turned to Drai and the Waits. The trio conjured up a top-of-the-line club designed to attract high-flyers but remain accessible. The New Year’s Eve opening night at XS took in an estimated $1 million; the club has already exceeded sales expectations. As the summer season approached, Cy Waits was busy adding bartenders and servers.

“We’re running with 30 waitresses, but are going to 45 for the summer at XS,” he says. Tryst and Drai’s are also on the upswing; Drai’s is running 20 percent ahead of last year. The three clubs combined did over $1 million in a single March weekend.

But wait: isn’t Vegas being hard hit by the recession? Gambling revenues are estimated to be down 22 percent on the strip and discounts abound at bars, nightclubs, hotels and restaurants. What gives?

Simply put, the three micro-manage guest service and operations, and empower staff to provide top-notch, personalized hospitality. The final element is an unshakeable belief that the club is the brand.

Inside Out Marketing

Marketing mastermind Jesse Waits buys very little advertising — maybe a billboard here and there for Tryst and XS; there is no advertising for Drai’s. Instead, exposure is generated through stories in media favored by club-goers, such as Black Book and 944.

The real marketing occurs via the employees. “Our staff is our most valuable marketing tool,” says Jesse Waits. “They’re encouraged to have [presence on] Facebook, MySpace, Linkedin and now Twitter.”

While Jesse Waits considers social media an amazing if not saturated medium, grassroots marketing is the preferred strategy. “The family atmosphere of our staff involves group outings in and outside of Vegas that expand our current customer base.” 

Adds Cy Waits, “We all talk up the club, invite people in. People want to be where it’s a great crowd, lots of girls and the energy feels good. Our staff gives off that energy no matter where they are.”

The clubs also employ VIP hosts to care for elite guests. A custom-designed data base tracks the guest from reservation to a personal phone call after their visit. “The essence of VIP is individualized service,” Jesse Waits explains. “From the second a client makes a reservation, we have full accountability for them throughout the system: general information and details with notes and a small biography including music preferences, frequency of visits, average spend, liquor preference, etc.”

That information is actionable: when VIPs check in at the front desk at XS, for example, it triggers a series of lightning-speed communications and the guests’ bottles are set up and at the ready by the time they’re lead down the staircase, through the glittering club and to their table. For all the club’s opulence, prices are competitive: $30 for men and $20 for women at the door, cocktails are $12 or $13 and bottle service of super-premium vodkas such as Grey Goose is $495 on Friday and Saturday nights.

The personal service doesn’t stop there. “A standard follow-up procedure is also expected of our staff: checking on the client prior to the visit, checking in on them periodically throughout the evening and a follow-up call in the morning — not too early, of course — to make sure everything went as they had hoped and to see if there is anything we could do differently next time,” says Jesse Waits.

Celebrities are fixtures at XS, Tryst and Drai’s After Hours, but not because they’re paid to be there. “We want the celebs to have privacy, so there are no paparazzi allowed inside the clubs,” Cy Waits explains. “That’s actually one of the reasons we attract a lot of celebrities.”

Hot DJs such as DJ Vice, DJ Irie and Sharam of Deep Dish appear regularly at all three clubs but are never advertised. “Sometimes we know they’re coming, sometimes they just come in and ask to spin. Whatever occurs, we treat them well, make them comfortable,” says Cy Waits.

“We don’t push events or who is here — celebrities, DJs, whomever — because everyone is a VIP, but the club is the star. We don’t want people to come in just because some individual happens to be here; tomorrow night that person could be somewhere else. We want them to come because of the product we offer, which is the club itself. The club is the brand.”

Accessible pricing, nearly zero advertising spending and exuding a consistently hot vibe drives the 70 percent profit margin, according to Cy Waits.

 

Family Time

The real driver of their success, says Cy Waits, is the staff. Each employee is carefully recruited, trained and developed as a brand ambassador. “We’re model venues, and we look for energetic people who are willing to play the role and be a part of this high-energy environment,” he says.

A new, but seasoned, cocktail waitress undergoes a five-day training program; those without prior experience have a 15-day unpaid training regimen. Tryst, XS and Drai’s employ 250. On a given Saturday night, 30 work the door at Tryst; in the club, five inside managers oversee the five service bars, and 25 cocktail waitresses are in high gear. Staff retention at Tryst is 95 percent, according to Cy Waits, well above the norm for nightlife. The secret? The Waits brothers and their management staff forge strong relationships with each employee.

“We are really open with our staff, always asking how we can do something better or more efficiently. They’re on the front lines, so they know what’s needed to make everything run smoothly,” says Cy Waits. Monthly meetings with the club’s entire staff and daily pre-shift meetings keep the lines of communication open, and Cy and Jesse are readily accessible.
A strong incentive and reward initiative also helps. Trips abroad, dinners out, tickets to shows, spa treatments and other perks are awarded regularly. “The team is what makes it all happen. You have to manage not through fear, but through building a family,” explains Cy Waits.

“Jesse and Cy are extremely involved and very hands-on with the team,” observes John Wood, director of customer development for Tryst and XS. “They care how everyone is doing, not only in work, but also in their personal lives. And they’ll be the first to tell you you’re doing a good job. There is a strong sense of family here.”

Another element that works in their favor: Cy and Jesse Waits both come out of the nightlife system. Between the two of them, they have experience working the door, bar backing, bartending, handling difficult guests, managing the floor, dealing with DJs and other talent, servicing VIPs and so on. Stooping to pick up a cocktail napkin off the club floor isn’t beneath either of them, and the usually shy brothers make it a point to interact with both VIP and regular guests.

The family philosophy, combined with hands-on management, keeps staff loyal and honest. “We worked our way up. We understand the rules. It’s hard to get one over on us,” quips Cy Waits.

The other retention factor: employees see a career path. When opening XS, the Waits didn’t look outside their organization for talent; high-performers from Tryst were promoted into management positions at XS.

Triple Threat

Las Vegas is an ego-driven town, and nightlife has more than its fair share of larger-than-life characters. The success of Tryst had some competitors scoffing that Drai and the Waits simply stepped into a great opportunity at a well-funded, ideally located space at Wynn. But as the club’s sales and vibe proved sustainable, some gave them begrudging respect. The over-the-top success of XS earned them more than that.

“These guys bring it,” says Robert Casillas, president of Las Vegas-based nightlife consulting firm Monsoon Group. “They are precise; they delegate properly and have strong operations and procedures that support beautiful clubs. They also have supreme loyalty from their people. They created a brand, and as result, they’re at the pinnacle of the nightlife world right now.”

The next challenge for the trio is translating their systems and culture to Los Angeles as they open Drai’s at the W Hollywood in the fall. Complete with a restaurant, pool, private lounge and rooftop club, Drai’s is poised to spark the growing nightlife scene in Hollywood. “They will need to be visible there, just as they are in Vegas, because that’s how they manage and that’s what their guests expect. They’re in demand on so many levels, which is difficult to satisfy. But they work like crazy, so somehow they’ll do it,” predicts Casillas.

“With a much bigger team, spread across two markets, it will be difficult to make everyone happy — our family of employees and our guests,” admits Cy Waits. “We’re really working hard right now to make sure we can keep our vision and culture intact.” Seeing how their previous hard work has paid off, it’s a safe bet that their recession-busting formula for success in Vegas will put them on top in Hollywood as well. NCB