“Las Vegas is rolling the dice, betting this time on the young and the hip,” trumpeted USA Today last week. Kitty Yancey’s story noted the domino effect of “lifestyle hotels.” From the Quad and Nobu Hotel to the impending Delano, SLS and Gansevoort, clean lines and playful sophistication are steamrolling old-school opulence and outsize whimsy across the Strip.
The target demographic is indeed coming to what’s being built, especially the Cosmopolitan, which embodies the power of edgy understatement in a place known for anything but. (Only in Vegas could a three-story chandelier be understated.) Dining and nightlife to music and retail, the goods are fresh and sexy. Yancey suggested that the Cosmo’s “must-do” status has other hoteliers paying attention to Gen Y and Millennial crowds that “don’t blink at dropping $1,000 on bottle service at club tables.” They do blink, unfortunately, at dropping such wads at casino tables. While the Cosmo is undoubtedly and deservedly the “it” place for locals and savvy tourists, it reported net losses of $96.9 million in 2011 and $106.5 million in 2012. Apparently, the young and the hip don’t gamble much, and “profits remain, for most operators on the Strip, comfortably ensconced on the casino floor.”
So says Bo Bernhard, executive director of UNLV’s International Gaming Institute. He adds that the tastes of younger players have long plagued the slot industry, and considering that the money Nevada casinos won last year included roughly $6.8 billion from slots and $3.9 billion from all table games combined, that makes the Cosmo’s stumbling block even bigger. The same report by UNLV’s Center for Gaming Research shows baccarat bringing more than a third of the table-games take. It caters to Asian high rollers, not hipsters, and Bernhard says it’s likely another soft area for the Cosmo: “A virtual startup like Cosmopolitan … can have real difficulties penetrating that market with no databases, no history and no long-standing corporate linkages to that market.”
For the many fans of the Cosmo’s inventive vibe, community spirit and gutsy corporate strategy, this number soup is tough to swallow. As more properties woo the cool kids and try to balance the profit picture, I hope the stumbling blocks are merely growing pains.
“Evolution is natural—indeed, crucial for a destination like Las Vegas that needs to project itself as ‘hip’ and hence must change or risk being as uncool as yesterday’s tweets,” Bernhard says. “I don’t know that the boutique hotel will be the next evolution … but I do know that there will be changes, and they may come from unexpected places.”