Closing Of The Sahara Las Vegas – The Real Story

When I heard that The Sahara was going to make a major announcement last week, I figured one (and only one) thing: They were announcing investments and improvement in their property. It only made sense. New hotel construction is out of the question given the current saturation of Las Vegas rooms. But a number of mid-level (similar category) hotels to the Sahara have been in the process of upgrades and renovations. With Las Vegas tourism numbers on the upswing, I figured The Sahara would be jumping on that bandwagon.

OOOPS (on my part). The actual announcement was that come May 16, 2011 the hotel would be shuttered.

This simply made no sense. Other similar properties were holding their own and reinvesting despite the economy. For The Sahara to hold on through the worst of the recession and then simply shut just as things were picking up signaled a big JDLR in my book. (JDLR is a Las Vegas term used mainly by casino surveillance and stands for Just Doesn’t Look Right).

Let’s look at examples of The Sahara’s direct competitors and others in the mid-level hotel market:

* The Stratosphere – This hotel (known as Vegas World when I moved to town) just spent $20 million dollars in upgrades. Both to the casino and to the rooms. Their upgraded rooms are going for more money and we hear are quite popular. While people note that The Sahara is isolated (a possible reason for it struggling), The Strat is even more isolated.

* Palace Station – What? Ted… that is a local’s casino. Yes it is. I agree. It happens to by MY local’s casino (I can see the Palace hotel tower — and also the Strat Tower — from my front yard). But when I cruise the parking garage at Palace, you know what I see? License plates from California, Arizona, Oregon, New Mexico, and beyond. These very people exit the I-15 and instead of turning east toward The Sahara, they turn west towards Palace Station.

The entire Station casino chain has recently hired 1000 people, some of which to boost the staff at Palace. Another Sahara competitor upgrading, not cutting.

Side Note: You can tell quite about about a hotel’s occupancy and clientele simply by observing their parking garage.

* The Riviera – They have re-opened their buffet, opened the new Queen Victoria British Pub, and are re-doing their gaming tables.

* Circus Circus – Did not close anything down even during the worst of times and in fact have added Rock ‘n Ritas bar/restaurant. They still the worst buffet in town (you have that hospital food taste in your mouth after eating there). But at least they kept it open!

* The Plaza – Not in close proximity but a direct competitor in terms of class of property. The Plaza is in the middle of a top-to-bottom upgrade including all newly remodeled rooms.

* The Tropicana – Just concluding a $100 million upgrade. Incredible. The rooms are nice, the new marble and carpet in the hotel makes you feel like you are in a swanky place, the South Beach theme has been needed in Las Vegas for a long time, and one look at the new Nikki Beach and Cafe had us swooning.

In the meantime that all of the above happened, The Sahara has closed two hotel towers, closed their buffet, and severely limited both their food offerings and hours of food outlet service. (Side Note: This was a boon to local pizza companies as late-night, drunk-and-hungry hotel guests called out for pizza delivery). No wonder people were staying at Palace Station instead of on The Strip at The Sahara: Palace has numerous, nice quality, reasonably priced food options including a 24 hour cafe.

So exactly what the hell was going on with this closure? I set out to find out.

The Saturday night after the announcement, I took the arduous 2 mile drive from my front door to The Sahara. The place was mostly full and very lively (partially thanks to Spring Break and March Madness) I listened to employees talk among themselves. I listened to what appeared to be former employees who had come down (after hearing the announcement) talk with their former co-workers. I talked to employees.

I found out something interesting. I assumed that they would have it in for current Sahara owner Sam Nazarian. The ones I talked to didn’t. They instead cited the terrible management that Nazarian put in place. Not a management vs. employee beef but simply how badly the place had been run.

For the uninitiated, Nazarian is a nightclub mogul from Los Angeles who bought The Sahara 2007 with plans to completely refurbish it into a trendy, upscale property. The economic downturn put his plans on hold.

Now it all started to come together and the closing (from his standpoint) made sense:

1. He needed to clean house with the management team. Yes, they could be replaced. But if they were previously people involved in his nightclub group or that he otherwise has present business relationships with (outside of The Sahara), that can get sticky.

2. He needed to clean house regarding Sahara employees. The majority of Sahara employees are legacy employees with long tenure earning top union wages. And they are older. Las Vegas values youth and looks when hiring. If Nazarian kept the hotel open, he’d have to keep these employees which don’t fit in with his trendy vision of what he wants to do with the property. So, now he’ll get to hire fresh, young faces at significantly lower wages. (Don’t shoot the messanger here. If that bothers you, leave a comment below).

3. Summer is pending. For Las Vegas hotels, this means they have to charge some of the lowest hotel rates but pay obnoxiously high electric bills to cover the air conditioning. The prospects of making a decent profit over the next few months wasn’t promising. The heat also cuts down on the number of people staying at Strat, Riv, or Circus who will attempt the trek to The Sahara. And yes… people make the walk When the weather is not too hot or cold, you regularly see people on the sidewalk headed toward The Sahara. Remember, hotels here look a lot closer than they really are!

Hence, Nazarian pulled the plug.

Final late-breaking note: Local gossip monger Robin Leach (yes, the “Rich and Famous” guy) has teased that “The modern makeover of a legendary Strip hotel is back on the drawing board” and the executive who was holding it up had returned to Hollywood.

We looked at the scenario involving every legendary local property. They were all either remodeled (Trop and similar) or highly unlikely to see any work because of the financial condition of parent companies (Circus, Imperial Palace). Only one property is in position to go through this: The Sahara.

Plus, the makeover is being teased as a very unique concept. Which reads “trendy” and upscale. Fitting Nazarian’s original vision.

Additionally, an executive who had come in and has now returned to Hollywood fits the bill of someone associated with Nazarian. Hotel executives usually don’t otherwise come in from (nor depart to) Hollywood. Perhaps things would be different if Nazarian had hired someone from Las Vegas who knew how to run a casino. (Ed Deline comes to mind).

If the above turns out to be more than conjecture, I’m going to campaign hard that the new project retains the historic Sahara name. You can reposition a property while maintaining the name. The Tropicana did. Real Las Vegas casino people were hired to remodel and run the place. Let’s hope they indeed do the same with The Sahara. People from out-of-state who “think” they know Vegas often end up falling flat on their faces here. When it comes to the gaming and resort business, Las Vegas is its own separate beast and has very little in common with the hospitality industry in general.

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Sahara Las Vegas Big Announcement: Hotel Closing Or Upgrades?

A strong internet rumor has developed today that the Sahara Las Vegas is closing. This is based on a major pending announcement from property owners SBE. I’m not so sure. The same site reported that less than a month ago, The Sahara was power-washing areas of their (extremely filthy) parking garage. Kind of strange they would be cleaning up one of the first customer contact areas right before they are going to let the place collect dust. The Sahara also has been announcing new services (aimed at more upscale visitors) like Bags To Go (which lets you check our bags in for your flight right at the hotel). Also, Las Vegas tourism is on the upswing. Yes, The Sahara closed down two of three towers about 15 months ago. (A closed tower would be an easy remodel). Would they hang on this long, only to close completely in the wake of slow but steady visitor volume increases? This just does not seem right. I also am very surprised that Robin Leach (who isn’t always accurate but never strays away from attempting a big scoop) has said nothing. Especially since the dearly departed Las Vegas magician Steve Dacri noted in December (on the Vegas Video Network) that Leach had said The Sahara was headed for mothballs. (Note: This was not during his interview with Leach, but something Dacri reported on another one of his shows second-hand). Leach would want to capitalize on any knowledge and as of this writing (12 hours before the official press conference), I can find nothing. The renovation of the Strat has been big news. SBE could easily find $10 million (or more) in private investor money, calculating that upgrading certain rooms could bring a boost in room revenue a la Stratosphere. Investor money coming from their nightclub buddies in L.A. (SBE is primarily a Southern California nightclub operations company) who could be given an ownership piece in return is an easy possibility. $1,000,000 and you own 2% of the property. Permanently. Something like that. Very enticing. When do you get to be a “casino owner” (instead of just someone who owns some stock)? Will I be shocked if it is mothballed? No. But I wouldn’t be remotely surprised if the announcement is that they are tossing a modest amount of cash at the place to keep up with their neighbor. By all accounts, the Strat’s investments are paying off with the higher rates and slightly better customer base (the people willing to purchase the room upgrades). I simply can’t see anything pointing to mothballing this legendary property.

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How Retirees Will Help Las Vegas’ Local Economy Rebound From Recession

Highest Poverty Rates – The metropolitan areas of the U.S. with the largest gains in people living below the poverty level:

1. Las Vegas, 2. Modesto (CA), 3. Detriot, 4. Ft. Myers (FL), and 5. Los Angeles.

I bring that up because people wonder about the long-term viability of this area. But few wonder about he long-term viability of Los Angeles. Ft. Myers isn’t going to dry up and blow away either. (No question that Detroit has had issues that pre-dated the current recession).

What do Ft. Myers and Las Vegas have in common that will bode well for the long run? Sunny weather, a low cost of living, and no state taxes. IE, the very things that retirees who their pensions and not in need of a vibrant jobs market.

According to a recent Review-Journal editorial:

…studies debunk the idea that senior citizens are a drain on government services. On the contrary, their median income is higher than the national average. Although 12.6 percent of the country’s population is at least age 65, only 11.3 percent of the state’s residents are that old.

“Our population is getting older,” Mr. Aguero said. “Seniors will choose where to retire and bring a huge amount of capital with them.

“Somebody is going to get the benefit. If it is not us, it will be somebody else.” Read Complete Editorial: Strategic thinking – A suggestion to help the economy grow

The story also noted that $80 million a year is spent to advertise Las Vegas as a great place to visit. None is spent attracting retirees by showing that it is a great place to live. With ample, inexpensive housing and a low cost of living, perhaps someone needs to look into that.

Your comments are encouraged:

Las Vegas New Years Eve Fireworks Info and Insider Party Tips

Our New Years Eve fireworks display details have been announced. The 8 minute show will be the largest display west of the Mississippi and we’re expecting 310,000 people in town. If you’ve never been, imagine the entire 4-plus miles of the Las Vegas Strip closed to traffic and filled with revelers. Drinking is allowed (no glass) and the party atmosphere is second-to-none.

Because of the glut of rooms which have opened in our soft economy, this may be one of the more economical years to come and experience it! Even this close to the date, our travel partners at I4Vegas Discount Las Vegas Reservations are showing hotels like Sahara, Flamingo, and Hooters at around $200 a night. (Honestly, there is nothing wrong with staying at Hooters. All the rooms were entirely refurbished when it became Hooters, and you are directly across the street from the porte-cochere of the MGM Grand).

Fireworks will be shot off the tops of 8 hotels but heed our important notes and tips:

  • The fireworks will be concentrated on the middle and south end of The Strip (Venetian to Tropicana). The Stratosphere will be involved (and seeing them go off that tower is probably the most impressive). BUT… no hotel between the Strat and Venetian are involved. 
  • The center strip gets crowded. WAY too crowded for my tastes (and I like a crowd). The farther south you walk, the more the crowds will thin out. Down by Trop and MGM you will have all the elbow room need without sacrificing a good view of the show as you look stright up The Strip. 
  • Porta-Potties are generously stationed in various locations. Take a note of them when you see them so you can get back to them. Why? The hotels will NOT allow you in without a room key on this night only. 
  • Drinking: Is allowed! Various vendors have beer for sale, and you are allowed to bring whatever you want as long as it isn’t glass. If you are doing BYOB, look for a store that sells beer in plastic bottles before you head down. Also, some brands of hard liquor are available by the pint in plastic. Some people take a gallon water jug and make their own concoction and bring it along. 
  • The Cops: Except to enforce the no bottles rule, break up fights, and get the overly-drunk off the street, they are unbelievably cool. They are generally stationed every 100 feet or so in groups of four. If they are not taking care of something, they will usually be happy to pose for a photo of even take one for you. If you are a cute girl, they might even let you pose for a photo on one of their motorcycles! Take a minute to thank them for the work they are doing. You are having fun, but virtually every Metro (Las Vegas police) officer is on duty during this 24 hour stretch. They sacrifice family and holiday vacation to make this night special for you. 
  • Happy Mardi Gras… Almost. Beads (and what girls will do for them) are no longer limited to New Orleans. You can do an online search and buy a mess of them (enough for your entire group) for $40.00 or less. The police don’t sweat it unless a particular woman starts go on too much and want too much attention and gets the crowd out of control. 
  • Parking: Hotels will generally NOT let you park in their lots (this night only) unless you are a guest. If driving (either because you are a local, or you are staying off-strip), get down to The Strip by 6 PM. First try some of the street behind the Flaming/Imperial Palace area. If no dice, get down Koval to the area around Tropicana and start checking out all the side streets in that area. Also, an empty just east of Koval on Tropicana usually is selling parking. If you are having trouble finding a street spot, just pay up and be on your way. 
  • If you can’t attend, you can still watch live streaming at no cost. For many years now, KLAS TV has streamed their live coverage on their site 8newsnow.com Do keep in mind the time difference! Those of you outside our time zone and watch the boring ball drop from New York and if that does not put you to sleep, stay up and ring our new year with us (and see what a REAL new year’s eve celebration looks like)!

Note: This post has been updated with the following recent video.

Las Vegas New Years Eve 2011/2012
“America’s Party” Announcement and Details:

Taxing The Las Vegas Visitors… Here We Go Again

A couple of years ago, we railed against the increasing rental car taxes to fun a performing arts center downtown. This area is already awash in venues of all sizes, and the clientele that goes and sees a touring ballet company isn’t likely to then head to Fremont Street, order up a 3 foot tall frozen drink from a girl in a bikini, and fire up the craps table. I continue to content that the city didn’t need the center, especially on the backs of visitors who already pay outrageous rental car taxes.

Now comes a proposed (just shy of) 1% sales tax only for an area within a 3 mile radius of the center of The Strip. Why? To fund an arena behind Flamingo/Harrah’s/Imperial Palace.

Disclaimer: I got out a map and a ruler (old school) and found out that I’m in that radius. So are most of the places I shop and eat at. On the flip side, we’ll probably be able to profit selling some tickets to the events.

Look… we have arenas. Coming out our backside for a community of this size. The only real reason some want this is because they feel it will land us a pro sports team. Let’s not be stupid here: Las Vegas is in an economic slump. Southern Nevada is slated to lose another 50,000 people. If the team draws, it will have to depend heavily on visitors from the other team’s city.

Can a sport team really bet on that (no pun intended)? And how well is a Las Vegas team going to do when 70% of the people in the stands at their HOME game are rooting AGAINST the home team? This just isn’t the right time to be (once again) sticking it to our visitors financially to fund something we don’t need right now.

What are your thoughts? Make your voice be heard with a comment below:

Zappos.com Moves Downtown Las Vegas, Major Boost Seen For Fremont Street Experience Area

The Biggest News That No One Is Talking About – happens to be the Zappos.com takeover of Las Vegas City Hall for their corporate headquarters. Why have I yet to see even one major Las Vegas blog talk about the impact? Who, what… who cares? You should. Here’s why:

Zappos.com employs 1000 people and they are growing. These employees tend to be younger and obviously have paychecks. With a new Las Vegas City Hall under construction, Zappos will be taking over the old building (on block off of the Fremont Street Experience) for their headquarters.

Despite the bad economy, downtown Las Vegas has slowly but surely been undergoing a revitalization. The new East Fremont district has gained a nice reputation. First Friday is established. The Golden Nugget opened a new tower about a year ago. The El Cortez had a major makeover a couple of years ago and continues improvements. The Plaza is currently in the process of MAJOR upgrades and improvements to their rooms.

However, downtown still has somewhat of a run-down image. With justification. Many of the properties simply have not had the cash to reinvest. Here’s where Zappos employees come in:

Seven days per week, Zappos employees are going to get off of work downtown. They will grab a drink. They will eat. They will leave their money downtown (plus add to an already lively scene). This infusion of people and cash will help provide the profits and incentive for ALL downtown businesses to step up their game. They will have the money to fix-up and upgrade.

I’m not saying that downtown Las Vegas will ever compete with The Strip. Nor should it. To build billion dollar resorts, you have to charge customers high prices to recoup the cost. Las Vegas continues to need the lower-price, lower-frills option downtown has offers. I don’t anticipate that changing. But wouldn’t it be nice to see some of the older downtown properties spruced up a bit? New life into them with the influx of more customers? This arrangement between the City of Las Vegas and Zappos is a winner for all involved and a huge win for downtown in general.

Is Las Vegas The Coolest Or Most Stressed City In The Country?

Within the space of a couple weeks, Forbes magazine published the results of a nationwide poll showing Las Vegas tying with New York City as the coolest city in the U.S. Hot on the heels of that was Forbes noting that Las Vegas is the “most stressed” city in the county. How could this be? Simple:

The local problems with unemployment and the housing market have nothing to do with your visitor experience. Tens of thousands of people bought homes in new neighborhoods here a few short years ago, paying well over what the traditional value of local homes has been. Many/most of them were also new to town and assumed that the boom-time wages helping them pay that inflated home price were the norm. Now they are underwater on the house, possibly out-of-work (or one spouse is unemployed), or they are underemployed and guess what: That is stressful. But that has nothing to do with your visitor experience.

A recent Review-Journal/KLAS TV poll noted that 71% of locals feel that the economy will stay the same or get worse over the next year. I agree. Here’s why: 34% of locals would leave if the could but can’t (no pending job elsewhere, too far underwater on home). This is simply going to prolong the pain. Here’s why:

The construction jobs that fueled this economy are simply not coming back. Not for many, many years. Construction workers needed everything from a haircut to car insurance to food… and that money trickled through the entire local economy. Which means that those jobs ALSO are GONE. So… you have 34% of the population holding on for dear life. Many of whom will be stressed to the point that they’ll still eventually throw in the towel. Their unemployment will run out, they will realize that the house payments are simply unmanageable, and they’ll pack up and drive away.

So then what? In 3-5 years, we’ll see the revitalization of the local population. Cheap housing (as a result of the continuing housing bust), lack of state income taxes, and a general cheap cost of living will start to attract entreprunuers. In fact, I know first-hand that this is already happening. Add to that the fact that we have not lost our international airport (still one of the busiest in the country) nor the amazing entertainment and dining options. If you can deal with our 3 hot months of summer (which many would suggest are much preferable to somewhere with three months of serious winter weather), you have it made.

With entreprenuers come great ideas. Where you have great ideas, amazing things happen.

But for the forseable future, you’ll still have very high unemployment, plenty of forclosures, and other stressful conditions for a pretty significant portion of the population. This will not cease until natural selection has taken its toll and “thinned out the herd” of Las Vegas residents.

In addition, the people moving to town now didn’t live the boom. They didn’t think it was normal for money to be falling into their lap if they so much as got out of bed in the morning. They are moving here to couple risk taking, hard work and a business friendly environment and will be a lot less likely to assume that a magical jackpot (home appreciation) is going improve their lives.

As I noted, I know because I’m already meeting some of these people. And if they are any indication of what is to come, the city will bounce back nicely and continue to be a very enjoyable place to work, live, and do business.

Reference material:

Your Turn: Think I’m on the money? Is there something I missed? Am I out-to-lunch and you think that Las Vegas is on a slide that it will never recover from? All comments are welcome and appreciated below.

New Concept In Las Vegas: Looser Slots, Cheaper Drinks

Las Vegas visitor numbers are up for the 9’th straight month, but gambling revenue keeps falling. Players aren’t stupid: When a machine (or a 6-5 blackjack table) can suck down $40 before you ever feel like you got going, you start to think about spending it on Las Vegas shows, tours, and restaurants. At least you know what you’ll be getting in return for your dollar!

One hotel owner is taking things back to “old school Las Vegas”: South Point owner Michael Gaughan has been loosening his slot machines and running some intense drink specials. (Wow… people who drink will gamble, and people who will drink more will gamble more… a concept seemingly lost on present-day Las Vegas). Gaughan realizes that he’s going to get that money you stick in the machine. Does it matter to him if it takes him 60 minutes or 90 minutes to get it from you? No… because he’s going to get it. Casinos were not built on winners.

So, why not let you play a while on that same amount of money? Why not let you have fun and get some bang for your buck, just like you’d do spending money on a movie or anything else? How about letting you win once in a while, so you have good memories and want to come back!

For the past couple of Fridays, Gaughan has also been offering $2 drinks — ANY DRINK –all day long. And over this coming weekend (as I write this, July 16 and 17, 2010), he’s offering $2 drinks from noon to midnight. OK… so he’s going to make very little money on booze (and barely break even on top shelf stuff). So what? He’s got you in the casino. What are you going to be doing here, reading a good book? Hell no… you are going to be gambling! And the more people that gamble, the more money he makes.

Granted, Gaughan isn’t carrying the kind of debt that most of the major Las Vegas properties are carrying (and/or operating out of bankruptcy). And, he’s a very wealthy man who has no one to answer to. He owns the place himself. No stockholders or bankruptcy parties pushing to earn every last nickel.

But let’s hope for Gaughan to succeed. If going back to the loose games and cheap booze that Las Vegas was built on works for him, expect other properties to follow suit.

Unfortunately, you have to go a few minutes out of your way to enjoy the South Point. Their shuttle runs $8 (all day pass – call 702-889-4242 for shuttle info). Perhaps they should make it free so more of you who stay on The Strip would use it. But… the $8 is a drop-in-the-bucket for truly looser slots, the friendliness of a locals casino (a relatively brand new property at that), and if you hit them during one of their $2 drink special times, you’ve paid for the ride with a couple of drinks. (Follow our Access Vegas Twitter feed for drink specials).

If you’ve been thinking about checking out a local’s Las Vegas property, check out one that is trying to do the right thing for their players and visitors!

Consumer Reporter Tries To Bash Las Vegas… My Retort

A television consumer reporter from San Francisco evidently hasn’t been here in many years…   but then acts like he knows his stuff. Reference:
Vegas squeezing money for cheap rooms with expensive drinks

Remember when drinks at a casino bar were inexpensive, a buck or less? Those days are now just memories. $6 beers? If you are lucky. $10 cocktail? That is the new normal.

I responded on that blog, but don’t know if the post will be accepted or not. So… here is my response:

With all due respect, the days of the $1 drinks were pretty much gone when I moved here in 1993. (The Plaza downtown was a holdout on that until around 2000).

And… Casino Royale still has $1 bottled beer (varies) and $1 frozen margaritas 24/7 right there on the Las Vegas Strip.

Food and drink specials ABOUND downtown. Just walk around. Want a big pizza and pitcher of beer? $10 at Benny’s Bullpen in Binion’s. $1.99 still buys the huge shrimp cocktail at Golden Gate. $2 Heineken or Corona at Fremont Hotel. Too many more to list.

On top of that, you did not factor in inflation at all. You cite prices from 20 years ago and then are shocked that they have gone up! (Despite the room rates being at 1990 prices in many instances here in Las Vegas).

Plus, the savvy Vegas visitor doesn’t buy his liquid refreshment at the bar. Most hotel sundry shops have a full liquor section (cold beer, wine, hard liquor) and much more modest prices and no tip needed. Also, stores like 7-11, ABC, and other similar convenience stores on The Strip are great places to buy your bottled water, soft drinks, and beer and more realistic prices.

Per a drink costing you more at a video poker machine? Maybe not. If you play properly, you are only giving away (on average) about a nickel per play (at $1.25 a pull). It would take 80 plays to (once again on average) lose the $4.00. Note: Those are averages. Sometimes you may lose quickly. Other times you’ll be up and walk away a winner.

Look… if I vacationed in San Francisco, I’d have to pay the same drink prices you are citing at any decent bar. Oh… except that I’d still be paying through the NOSE for a hotel room. Look at what brand new hotels like Ario, Palazzo, and Encore are charging per night for some of the nicer rooms in the world. Then look at what a comparable hotel in San Francisco (or New York City or Miami) would cost. Not even close.

A Las Vegas vacation is still a bargain with no equal. If you are just not the kind of guy who enjoys Las Vegas, don’t come. Vacation somewhere else (and pay a lot more money)!