Las Vegas Weekly

June 17, 2010 · 1:01 AM

Photos: From Artisan to Rumor, focus is on boutique hotels for Siegel Group

By Robin Leach

Stephen Siegel and Michael Crandall of The Siegel Group at the future site of Rumor, the former site of St. Tropez, on Sept. 9, 2009.

Photo: Steve Marcus

Yesterday’s job fair at the new boutique resort Rumor signaled that Stephen Siegel’s multimillion bet on the future of Las Vegas is finally in play, as he proves to the naysayers that his unique business plan of buying up “lost, abandoned and shuttered” hotels will help Las Vegas boom again.

Rumor is scheduled to open by the end of the month opposite the Hard Rock Hotel, and when you walk it, you’d never know that it was the St. Tropez, an old and now-defunct piece of Las Vegas history. When I toured it with Stephen, it sang with new life: 150 modern suites, contemporary ambience and a truly unique Las Vegas pool courtyard garden with room for 2,500 revelers. He’s taken a page out of the South Beach playbook and brought a zero-attitude hot look and cool fun to Las Vegas.

It’s not Stephen’s first top-to-bottom makeover or under-performing asset turnaround. He’s just completed the same game with The Artisan Hotel. Everyone loves a comeback, and not only did his company bring it back into business, they also made it dramatically better.

“I knew that The Artisan was an exceptional property, so I personally oversaw the extensive renovations throughout the hotel. The makeover is now complete after six months, and we have the new Mood lounge at The Artisan restaurant, Artisan Afterhours and a whole new sexy pool experience. The legion of fans it once had are all back and impressing those who have never been before,” he told me.

The Artisan is a 1900s Parisian-looking, non-gaming boutique hotel and ultra lounge behind gilded gothic doors. The 62-room, two-suite, lushly landscaped hideaway is literally covered from floor to ceiling with eclectic art and paintings from another world of sparkling chandeliers and flickering candles.

“My vision is for The Artisan to be the ultimate locale for nightlife, weddings, one-of-a-kind events, extended visits and weekend Las Vegas getaways,” Stephen said. “I’ve never seen a hotel like it. When guests walk through the door, they are literally blown away.”

Stephen, who has been in Las Vegas since 2004, runs The Siegel Group, which owns and operates the Resort on Mount Charleston and masterminded another makeover at The Oasis and the Gold Spike downtown. He’s no novice when it comes to taking unwanted properties and turning them into new gems at the rate of $12 million a time. The Oasis at Gold Spike is in the heart of downtown, and he redeveloped and reimagined a three-story, 50-room forgotten Travel Inn connected to his just renovated Gold Spike Hotel so that both are where retro meet modern.

“Oasis offers its guests the opportunity to experience not only Las Vegas, but also downtown Las Vegas in a relaxing way in a boutique hotel setting that’s hip with an easygoing vibe,” Stephen said. “I’m a big believer in downtown Las Vegas, and this property was the perfect place to create something entirely new and different.”

The focus of the company, though, is aimed at Rumor, and yesterday’s staffing brings the master plan closer to fruition. Who better to hire than former Hard Rock Hotel executive Yale Rowe to lead its future opposite his former playground?

Stephen and Michael Crandall, director of business development, don’t deny that they are mavericks with their business philosophy for the designer hotels they’ve created. “The old model of building bigger and larger no longer works. Today, it’s about being different with new ideas and new concepts, and our vision is of chic boutique resorts,” Stephen said. “We’re taking what was bad or unwanted and brought them back to life in a contemporary, stylish, hip, sexy, fun way.

Robin Leach: In a day and age with the economy the way it is, why aren’t you guys running for the hills?

Stephen Siegel: When everybody runs one way, we run the other. I think today is full of opportunities. Now is the best time for opportunity, when everyone is scared.

RL: Why have you taken on this niche market of boutique hotels? St. Tropez, which is going to be Rumor, and The Artisan, which is a lovely hotel. Why boutique hotels?

SS: We feel that there are a lot of travelers who come to Las Vegas who don’t want the hustle and bustle of The Strip. … If they’re coming into town for a convention or if they’re just coming to town to relax and they don’t want that big box hotel or cookie cutter franchise, we want to bring them something that is very boutique-y, very chic, customized to them, with tip-top service. They’ll feel like they’re almost not in Las Vegas, but they can still go out to a show and a club.

RL: For guys who have built an empire from Siegel Suites, how do you manage both ends of that customer spectrum?

SS: We build our business based on the vision of the leader of the company, whether you’re running a single-suites hotel, running a boutique hotel, making a pencil, fixing a car, being a manufacturer, business is business. Managing people and taking care of customers is the No. 1 thing you have to do. Then everything else just falls in line. It feels just as good to take care of a blue-collar employee who’s spending $2 on his beer at the Gold Spike as it is to take care of a higher-end customer who is spending $8 on his beer at Rumor or Artisan. … So, whether it is a Siegel Suites or a boutique property, it’s still managing your employees and taking care of your customers. We’re here for the long run. We love Las Vegas. We believe in Las Vegas.

RL: Let’s talk about downtown. Why are you making this extraordinary bet on hotels that have seen some pretty rough times?

SS: I think the bet was made a couple of years ago. We believe in the mayor’s vision of downtown. We believe that in every city that downtown is the place to be. I think that it’s just a matter of time before it happens. I think that if the economy wouldn’t have gone the way it did that downtown would be on a roll. We’re in it, and we believe in it.

RL: So you are the new gunslingers in town? How do you look at yourselves?

SS: We are aggressive in a business that we do well. We will be the best at what we do, and right now we’re in the boutique hotel business. We think there is a huge upside for boutique hotels. We think that when we focus on doing something, we want to be the best where we’re doing it.

RL: Do you look at this as a good business gamble for 2010?

SS: I think for the price that we’ve picked up a majority of these hotels, we believe the value is there in the purchase. We think we can bring our expertise in managing them and be profitable creating a brand of which there is no competition in the market. We don’t have 4,000 rooms. We’re much less, and we can really cater to our customer, so we don’t need that many bodies to be successful. Nobody else has that in Las Vegas or can have it in Las Vegas.

RL: Is it fair to say that this concept has worked well in New York, L.A. and San Francisco, but it has never been exploited here in Las Vegas?

SS: I would agree. I think a couple reasons why it hasn’t happened are because people’s mind frames are always big, big attractions, big themed hotels, and there weren’t many locations to do this. You have to have the right property, and the few properties that we do have possessed the quality, the location and the whole vibe of a true boutique hotel.

RL: Do you sense that Las Vegas is starting its comeback? Can you see the light at the end of the tunnel even if you don’t know how far away it is?

SS: It’s all about value; it’s all about bargain. When you give people a bargain and value, we see that people show up. People are hunting for those bargains, and in addition to value at our hotels, we add in the experience of a vibe you will not find anywhere else in Las Vegas. They see it, they experience it, they tell their friends, and then they want to see it for themselves.

RL: Has the rebound started yet in Las Vegas?

SS: I think it’s still at the bottom. I don’t think it’s going to go much lower, but I think it’s still bouncing on the bottom. I think it will go up and drop back down. I think it’s going to take time. You have to have jobs, and you have to have the confidence in people, and right now you just don’t have that. But once it does happen, it will happen pretty quickly. Everyone wants to be in Las Vegas.

We’re still out there shopping for more opportunities. We’ve got to be careful because it’s not just about buying something right, but it’s being prepared to wait it out to three or five to seven years. It’s people like us who are on the ground every single day who are operating them, keeping them above water in order to be holding them for that long or longer. It’s obviously buying the property at the right price, but you have to be able to hold the property. Las Vegas is the best city in the world. It will get back to its glory days again. It’s just a matter of time.

RL: Would you go on the record and say that the rebirth of downtown has already started?

SS: I do. I think it’s going to be a slower process, but the wheels are moving. We’re making it safe and secure for customers, too. We want to make sure we’re inviting them in so they don’t pass us by.

When Rumor opens this month, look for those smart uniforms on handsome doormen and model girls behind the reception desks -- the entire New York and South Beach look. Everybody I’ve spoken with says Stephen, Michael and Yale will eventually win their big bets even if it takes them longer than they expected.

Robin Leach has been a journalist for more than 50 years and has spent the past decade giving readers the inside scoop on Las Vegas, the world’s premier platinum playground.

Follow Robin Leach on Twitter at Twitter.com/Robin_Leach.

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