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Interesting Analysis on SLS

Discussion in 'Casino Industry & Development' started by leo21, Nov 25, 2014.

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  1. leo21

    leo21 VIP Whale

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  2. Hawaiianmark

    Hawaiianmark Low-Roller

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    McKee writes a great blog. Dynamite info without the residue of gunpowder!
     
  3. pphold

    pphold pp Park Place Degenerate

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    SLS is nice just too far north.
     
  4. UTE

    UTE Plastics

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    One thing lacking from every analysis I've seen is the fact the Sahara was turned into the SLS for a relatively low cost. It's not heavily leveraged. As a result, it does not have to operate at an ongoing high capacity to succeed.

    Yeah, SLS is pretty quiet during regular week days - as is the Wynn (et al.). Good weekends make up for it and I've been in the SLS for five of 'em. And, on all of those five weekends, business was good. I think all of us will be waiting for the forthcoming comparative financials of Strip casinos. I'm willing to go out on a limb and assert SLS will have equaled or out-performed Strip competitors further to the South - when first year financial performance is measured.

    Bill
     
  5. aaisack

    aaisack High-Roller

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    I'll be staying there next week for 3 nights. In a couple visits I haven't been overly impressed, but I'm willing to give them some decent play on the offer match. Hopefully they treat me better than the Plaza did.
     
  6. REELmoneySlotFan

    REELmoneySlotFan High-Roller

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    @UTE. I'm not as convinced as you are. The renovation of the Tropicana was done on a smaller budget. Location of the Tropicana is way better than SLS. Still Tropicana has been improving their bottem line one step at a time and they have lost money years in a row...The SLS bottem line might be better than Riviera and Casino Royale and maybe even Cromwell but I guess that's about it.
     
    Last edited: Nov 28, 2014
  7. leo21

    leo21 VIP Whale

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    I don't recall any casino getting by merely on weekend traffic, and the overall observation is the nightclub part of the business isn't doing well enough. And do the renovation on the cheap side is part of the problem from my perspective. A Vegas resort can't get by with one narrow demographic. I don't see what they have been doing would draw conventioneers, the older weekday strip tourist or locals. They probably need to get aggressive in all three area to survive.
     
  8. UTE

    UTE Plastics

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    Actually, weekends ARE where casinos/resorts make their money. They're lucky if they cover operational costs on most weekdays - unless it's peak season or unless something big is in town. And the biggest Golden Goose is a major holiday weekend.

    Bill
     
  9. Fraggle

    Fraggle Low-Roller

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    The tropicana is owned by the ONEX corporation, a very large canadian company with ample cash to take its time to maximize the longevity of the property. I am not sure that the SLS can continue to lose money the way they are without going into bankruptcy... its kind of an entirely different situation.
     
  10. Kickin

    Kickin Flea

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    Has SLS released any numbers yet?? How do you know how much they are losing (if at all)?

    I know the early developments and reviews don't bode well for them, but as UTE said this isn't some highly leveraged overly ambitious project either like Revel which needed to outperform from day one.
     
  11. Fraggle

    Fraggle Low-Roller

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    You're right, I don't know.. but I also don't buy stock in pixie dust and fairy's just because my niece believes by some slim chance they might be real... It's not really a case of being leveraged, its a case of whether or not they are 'allowed' to lose money. The tropicana did not transition over night to be some magical money maker for ONEX and partners... they're still suffering growing pains, years later.. the difference is that they have the time to move from negative to positive. The SLS believed it would be making money right off the get-go, and that everything would be wonderful from day 1. Sadly it was short-sighted and rather foolish. I don't think anyone really believes they have staying power, because they didn't have any plan whatsoever to actually move forward. This was their plan, this was their magical money-maker. In the end it was just pixie dust and pipe dreams. Now they're left with a mess and no plan to clean it up (at least, as far as anyone can tell?!).
     
  12. Malibugolfer

    Malibugolfer High-Roller

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    I always perceived the whole SLS project to be a smoke and mirrors dog and pony show.
    Front man Sam with no gaming license, the EB-5 visas, PE Stockbridge money etc. They just didn't produce a product even near comparable to their hype. Their photo ads showing SLS as right behind Encore spoke volumes. Did they think people would believe the photos or their own taxi costs to get way up there?
    And way too many rooms the size of newer hotel closets.
     
  13. REELmoneySlotFan

    REELmoneySlotFan High-Roller

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    @Fraggle It's not an entirely different situation: converting a dump into a nice property was the starting point. And where the situation is different it's different in Tropicana's advantage. The Tropicana renovation was done on a lower budget and their location is way better. Yes the advantage of the Trop is that they have an investment company behind it with deep pockets. We actually agree about SLS's chances. They will have to start making some serious money pretty soon because I don't see them surviving for 2 years if they don't. In other words, I'm with you about not being optimistic about SLS's future. UTE has more confidence. I hope SLS is going to be succesful fast but I don't think they will.
     
  14. Funkhouser

    Funkhouser In Charge of the Big Door

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    Here's the thing. SLS from the get go was trying to extend their brand image into Las Vegas, thinking it could compete.
    So they were trying to take what worked for them in SoCal and transplant it into Vegas and have the CA throngs follow them out
    there as well as siphon business off the other players in that demographic (Hard Rock, Cromwell, Cosmo, Palms)

    The problem IMHO they did not have enough money to create a unique experience. So what they built was a solid Mid Tier property
    in an isolated location. If they want to make the debt payments they desperately need to pull in the convention crowd, which I believe
    with the right offering mix they could (traveler perks, access to convention center by free monorail passes, so perks for business travelers).

    Gambling they have a much smaller space, and not all that exciting since they did not have a lot of dough to spend on the Casino design.
    To me its a more industrial version of Aria and parallel to what DTG did, abit larger. The place is nice enough and they look like
    gaming is competitive. I would try the place, but nothing I have seen as a middle aged 40 something white guy would draw me there on
    a regular basis. If I am going to lose my money in the casino, let alone track half way across the country, the experience has to be something special.

    That means a friendly staff, clean decent appointed rooms, good Wifi / Cell coverage in the joint, and prompt service. Major plus if your staff knows my name,
    and they can interact with me on a more personal level. IMHO that what distinguishes in this current market. There plenty of the same around.

    Now how you inspire your staff and what tools you give them to make that happen is what will create the brand loyalty they need in Vegas to survive.
    especially with less focus on the gaming side of the house.
     
  15. Funkhouser

    Funkhouser In Charge of the Big Door

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    Oops duplicate
     
  16. boogaloobboy

    boogaloobboy Tourist

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    This is a spot on estimate of the incredibly foolish idea they had. What qualifies as "hip and trendy" in Miami and SoCal is the tip of the iceberg in Vegas. SLS badly underestimated what it would take to set themselves apart from the entrenched mega-resorts and are going to pay dearly for it. That this project was ever launched was a folly from the start, it amazes me that the investing group could not just take a trip to the strip and see the huge hurdles in their path is astonishing. And by hurdles I am refering mainly (but not exclusively) to LOCATION, quality and size of the resorts they would be attempting to poach from and again LOCATION.

    Earlier posters are entirely correct. For most people, and virtually ALL female visitors it is strip or bust for Vegas. And I mean mid-strip Aria/Cosmo type location. The allure of Vegas for the new customer is not the gambling. It is the experience. And that experience involves being right in the damn middle of all the action, not a mile away from Wynn which is already to far away to draw in many visitors.
     
  17. fishyducky

    fishyducky Tourist

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    I thought the same thing all along. Bunch of people told me that they had the model to succeed, despite their huge disadvantage in location. Looked at their rates a couple days ago: $55!!!! Holy ****! They really tanked quick! Now I'm not so sure. They better come up with something good.
     
  18. waverunner

    waverunner BBHMM

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    It's down to $41, at least the ads i see here in LA. I was at SLS a day after it opened, the place looked nice, the employees were friendly, and the former Sahara added some nice touches. However, as i have been saying since i visited SLS, the location is bad. Bad for these times.

    Geographically, the SLS is in the same location as Sahara, it's on the same lot. But the Strip has changed over these last few years.
    The reason i keep mentioning the Strip from Wynn to Mandalay Bay is because that's the primary place that visitors can walk. You can walk from Wynn to Mandalay Bay and take pics, dine, see shows, clubs, shop, etc at every property in between the two. You can even walk from one hotel to another without venturing outside like from Excalibur to Mandalay Bay or Paris to Bally's. When people come to Vegas they want to be entertained and take in as much as possible in the few days they are in Vegas. That is the reason Steve Wynn created Mirage.

    Many people come to Vegas now and do little or no gambling. But Vegas has recognized that in order to keep their interest in coming to Vegas, they had to change. Unfortunately, most of the hotels that created a buffer between the North and Mid Strip are no longer there. When i used to frequent hotels like Sahara, Riviera, Sands, Desert Inn, Silverbird/Thunderbird, Landmark, Silver Slipper, and Frontier, the reason was for gambling and liked the ability to casino hop to as many places as possible.
    But casino hopping is different now. It's sort of like widow shopping. You can window shop much easier from Wynn down to Mandalay Bay. There is something to do, see, and enjoy when you can walk to a property and then decide if you want venture in to buy.

    SLS is not a place to window shop. Yes, is has a pleasant design, it does have some nice eateries, clubs to hang out in, but the difference now is if you don't see anything that interests you at SLS, you just can't go on to the next window like you can as easily as the main Strip.
    The location of SLS, in these times, is why it is struggling. A Holograghic image above the bar is nice to look at, but it's not going to bring people out of their way to experience something they can do at Wynn. The distance from Wynn to SLS may seem insignificant to some people, but most people feel that SLS, IMO, is insignificant because of the location. There is not something at SLS that other hotels don't have. You can walk to Bellagio to see the Fountain show, you can walk across the street to shop at PLO, you can take a date on the Canals of Venetian. You can get a good cheap hot dog at Casino Royale, you can soon walk Central Park West at NYNY/Monte Carlo, etc etc.
    If there are any tourists still interested in seeing SLS, there won't be any time left on their vacation.
     
  19. JeJas

    JeJas VIP Whale

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    A casino without a buffet is no more than a slot parlor.
     
  20. Snidely

    Snidely VIP Whale

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    My visit to SLS was not awe inspiring. It's a lot like the Revel in AC and I think it will have the same fate if it doesn't adapt quickly. My issues:

    The parking garage is low budget. If they are expecting a lot of car traffic, they should have fixed up the parking garage. It's a poor first impression. You have to walk outside from the parking garage to get inside the casino. There was no doorman. First class joints have a doorman.

    We signed up for new players cards and the printed cards with instructions to download the free play are incorrect.

    6/5 JOB VP at the sports bar.

    We had to ask 3 times to get the main TV and TV at the bar changed to a football game. The main TV was broadcasting the Macy's Thanksgiving Day parade for 25 minutes. You're a sports bar, someone should have a list of what channels to broadcast at what times.

    My wife and I were drinking champagne at the poker bar and the bartender gave us mis-matched flutes.

    Minor things but things that never happened at Cosmo or Cromwell.

    Cosmo and Cromwell are fancy but have a warmth from their employees. Just like Revel, it's a cold vibe at SLS.

    Palms did/does a great job of being cool on the weekends but a local's place during the week.
     
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