will SLS Las Vegas be a success?

When I first read that Sam Nazarian was spending $350 million to renovate the Sahara, I was optimistic that he could make it work. But as I read more about it and viewed images of the proposed renovations, it's obvious that he's not trying to compete with Bally's or Flamingo. It appears he intends to compete with the hip properties on the Strip. (The sister property is the SLS Hotel at Beverly Hills, and it is indeed a luxury hotel.)

The big drawbacks to renovating the Sahara are:

A) Location. Yes, it's close to Wynn. But it's much closer to Circus Circus, Riviera, and Stratosphere. This is not the chic part of town that folks with money flock to.

B) Room size. By Las Vegas standards, Sahara's rooms are small. Why would I pay $150 to stay in a 350 sq ft room at SLS in a bad part of town, when I can get a 500 sq ft room at Bally's in the best part of town for $80?

Apparently he spent $350 million on the property and will spend another $350 million on renovations. (Are these numbers accurate?) For that kind of money, couldn't he have bought Fountainblue?

This was kind of discussed in another thread, though the SLS angle is different enough to warrant a separate thread...

After a discussion with the Wizard at WovCon, my idea for a true Macau-style casino at Sahara probably won't work. I still think an Asian themed casino that focuses heavily on the "Asian games" would be a good idea, but you'd have to pull the traffic from Palace Station and some of the higher end Strip properties. Unfortunately, just a nice hotel doesn't solve that problem.

Unless it is exploded and rebuilt from scratch, there is no chance

They are removing 120 guest rooms, so I assume that at least some rooms will be bigger. The $50 million a year in interest payments will be tough to overcome.

I hope it does that end of the strip was going to be crazy when the vegas boom was happening with the Fontainebleau, Ehelon and the Plaza going to be there. So this could kick start those back up if it works. I don't think it ever will after seeing the disappointment in the City Center and how over budget that became.

I believe construction has just started to convert the old Sahara Casino into SLS Las Vegas. The project is now estimated to cost
$415 million and should be completed by the fall, in 2014. Frankly, I don't understand the logic behind reworking the property
into a luxury resort. Who are they going to draw from? The casino's closest neighbors are Circus Circus, Stratosphere, Riveria
and LVH. These are hardly upscale properties and they certainly don't have large numbers of "whales" as visitors. Because I
live in Las Vegas, for the sake of reducing our unemployment numbers, I wish Sam Nazarian and company all the luck in the
world and hope they can pull off a miracle by making this venture a success. However, I don't see how this may realistically
come about. A short time before the Sahara closed, a pit boss told me they were generating a net $33 million per annum in
revenue and it wasn't enough to pay the interest on the loans made to help purchase the property from the Bennetts.

"Be not simply good; be good for something."

-Henry David Thoreau

Quote: timbo123

I believe construction has just started to convert the old Sahara Casino into SLS Las Vegas. The project is now estimated to cost
$415 million and should be completed by the fall, in 2014. Frankly, I don't understand the logic behind reworking the property
into a luxury resort. Who are they going to draw from? The casino's closest neighbors are Circus Circus, Stratosphere, Riveria
and LVH. These are hardly upscale properties and they certainly don't have large numbers of "whales" as visitors. Because I
live in Las Vegas, for the sake of reducing our unemployment numbers, I wish Sam Nazarian and company all the luck in the
world and hope they can pull off a miracle by making this venture a success. However, I don't see how this may realistically
come about. A short time before the Sahara closed, a pit boss told me they were generating a net $33 million per annum in
revenue and it wasn't enough to pay the interest on the loans made to help purchase the property from the Bennetts.

"Be not simply good; be good for something."

-Henry David Thoreau

If Nazarian was rebuilding it as another Sahara, it certainly would not stand a chance. However, he is trying to do something different than before, and if he can make it special, folks will come. I agree, there are strong headwinds against the project, but Center Strip is not the only place where money can be made.

I think for SLS to truly thrive there has to be some revitalization north of the WynnCore. Stalled projects like Fontainebleau and Echelon need to get going again. It wasn't long ago that properties like Circus Circus and Stratosphere were thought of as "Strip" properties. Now it seems that for all intents an purposes the strip properties end at Wynncore. For SLS to succeed there will need to be reason for regular foot traffic to take place north of Wynncore which as of now is virtually non-existant.

wow.. he's renovating the Saraha to compete with Wynn?!

with a $400M pricetag, why not just implode it?!
a completely new building would stand a better chance, no?

the only thing i can see for it to work is if Caesars crumbles under it's debt weight and closes.

Quote: Gabes22

I think for SLS to truly thrive there has to be some revitalization north of the WynnCore. Stalled projects like Fontainebleau and Echelon need to get going again. It wasn't long ago that properties like Circus Circus and Stratosphere were thought of as "Strip" properties. Now it seems that for all intents an purposes the strip properties end at Wynncore. For SLS to succeed there will need to be reason for regular foot traffic to take place north of Wynncore which as of now is virtually non-existant.

Do many guests at the high end properties like, Wynn/Encore, Venetian/Palazzo, Caesars, Bellagio, do alot of gambling off of the property they are staying at? I think most will play where they stay, but are there any studies? SLS's sucess will depend on it.

Quote: 100xOdds

wow.. he's renovating the Saraha to compete with Wynn?!

with a $400M pricetag, why not just implode it?!
a completely new building would stand a better chance, no?

the only thing i can see for it to work is if Caesars crumbles under it's debt weight and closes.

It would cost at least double the $415M to blow it up and start from scratch.

Quote: Ayecarumba

Do many guests at the high end properties like, Wynn/Encore, Venetian/Palazzo, Caesars, Bellagio, do alot of gambling off of the property they are staying at? I think most will play where they stay, but are there any studies? SLS's sucess will depend on it.

I would love to see that study too. I always bum around the strip to multiple properties to gamble, have always done this even when I wasn't an amateur AP and was just slinging dice. Based on the crazy foot traffic, I'm not the only one (of course). But yeah, definitely curious how many people just stay and play.

I agree that nowadays people, especially out of towners, view the Strip from Mandaly Bay to the Wynn, and even Mandalay Bay might be a bit far on the other end of the Strip. I have driven and taken the bus by there and foot traffic was minimal when I observed it. There has to be a reason to go there and unless they come up with a really compelling one, I do not see it succeding.

The Echelon project was delayed by Boyd Gaming and now I read where they are seeking $500 million in new funding/loans
to replace some current debt obligations. With their recent acquisition of Pinnacle Gaming for 1.5 billion or so, it seems that
their emphasis will be placed elsewhere. The last I heard is that Echelon might restart in another 3 years. The Fontainebleau
is a bit of a puzzle. I don't know the shape of the building's interior as the recent renovation of the Plaza downtown used
fixtures obtained from the Fontainebleau. I suspect the building maybe gutted from bow to stern. Clark County is wrestling
with how to make the building and surrounding area a little less of an eyesore. Going on, the New Frontier was purchased
somewhere around 2007 and imploded. A few back acres of the property were sold to Donald Trump who promptly built
Trump Towers. A new casino was once planned for the remaining 38.5 acres that now grow weeds and all is quiet about
the potential future of this land. With the Riveria, Circus Circus and Stratosphere as struggling to survive neighbors, and
all of the vacant land nearby, I don't see where SLS Las Vegas will be getting any desirable foot traffic. All I see at the
corner of Las Vegas Blvd. and Sahara Ave., are vagrants.

If the monorail would have been built right down the middle of the strip and ran from McCarron airport all the way to downtown,
there would have been benefit for many casinos along the way, especially those leading up to the Stratosphere and then beyond,
to downtown. However, it was built behind the strip casinos, ends at the Sahara, has too few riders and is effectively bankrupt.


Again, I hope SLS Las Vegas will be a success and, as a local, I plan to visit it quite often. However, I wouldn't bet on its
long term survival.

"Rather than love, than money, than fame, give me truth."

-Henry David Thoreau

I rode the monorail a month after it opened and thought,
what a waste of money this was. It was full of German and
Japanese tourists all taking pictures of each other. Was that
its intent?

Quote: Ayecarumba

Do many guests at the high end properties like, Wynn/Encore, Venetian/Palazzo, Caesars, Bellagio, do alot of gambling off of the property they are staying at?

It varies.

I base that from accounts here and elsewhere from people who've stayed at the Wynncore and other high end properties. Overall I'd say it's pretty much the same as other casinos.

Quote: Ayecarumba

Do many guests at the high end properties like, Wynn/Encore, Venetian/Palazzo, Caesars, Bellagio, do alot of gambling off of the property they are staying at? .

The last study I saw was people do about 25% of their
gambling at the hotel they stay at in Vegas. Some don't
do any. I do very little at the hotels I stay at, mostly
at night when I start drinking and can't drive anymore.

Why not build a new monorail from the airport to fremont st? I am sure the cab drivers and shuttle vans would appreciate it:) It could be funded by the hotels, free to ride, and they could put lots of security on it as a way to give more jobs.

Quote: NicksGamingStuff

Why not build a new monorail from the airport to fremont st?

I should ask: is there even one successful monorail anywhere in the world outside of a Disney park?

I rode the Vegas monorail on my first trip. I've no complaints about the trains, the ticket machines, or the stations. My only complaint is that in most stops you walk a looooong way after you get off. The two exceptions are the LVH (then the Hilton), where the station led directly to the casino where the Trek rides used to be, and the Sahara, where the walk was relatively short (compared to the other stations). Given how much walking is already involved in any Vegas trip, the added monorail walking was too much.

You are so right. Las Vegas is a tourist mecca as is any Disney Park. You build to accommodate your visitors, your guests. The monorail
should have been built from McCarron Airport right down the center of the strip, all the way to Downtown. Casinos would have been
happy to toss in a few million towards construction as they did when they were building their own monorails years ago. It would have
been easy to provide A and B versions of the trains going downtown to serve every other casino and do the same with C and D versions
of trains on the return runs, covering most if not all casinos along the way. Strip traffic would have been reduced and we would have
made it much easier for tourists to exit the trains and walk short distances to the casinos. Steve Wynn and others build mega-size
casino resorts for people with deep pockets, however, I think we're making it more difficult than it should be for average income folk
to enjoy a pleasant vacation without having to hock the furniture. In the future, I'd like to see more moderate price ranged casinos
built to replace some of those shuttered, torn down or imploded in recent years (such as, the Sahara, New Frontier, Star Dust, Hacienda,
Westward Ho, etc.).

"Friends - they cherish one another's hopes. They are kind to one another's dreams."

-Henry David Thoreau

Its gonna be tough for SLS but smart management decisions will be a major factor. Foot traffic helps but its not the end all for a sucessful casino. I still see some foot traffic around Circus Circus and Riverra. I've actually walked from Rio to Palms and there is no foot traffic around or between those 2 properties. I've walked from Rio to Gold Coast, again nonexistent foot traffic. ( I like to walk alot) I dont think Wynn and Encore gets much foot traffic. Majority of foot traffic on the strip is really between Excalibur to Venetion. Not much foot traffic around old Lady Luck thats becoming the Grand. Last time in vegas, I checked out Southpoint , Green Valley and M. Absolutely no foot traffic around those places. You give good value for the gambling dollar and they will come. Thats where smart management decisions come in. I'm a video poker player and there isnt a single video poker machine on the strip that I will pour money into. I play downtown, the Palms or locals casinos and I will pour money into those machines because of decent pay tables.