Will Sam Nazarian’s Risky Attempt to Rethink Las Vegas Hotels Work?

In 2009 when hotel occupancy and room revenue took their biggest swan dives in Las Vegas history during the financial crisis, the legendary Sahara hotel was selling rooms for $21 during the week.

Hotel and nightlife impresario Sam Nazarian had purchased the hotel in 2007, drawn by its iconic role in Las Vegas tourism when it was the favorite watering hole for Frank Sinatra and friends—the original Ocean’s Eleven crew. Nazarian wanted to convert the Sahara into an SLS Hotel, part of his parent SBE Entertainment hospitality conglomerate, alongside two others in Beverly Hills and South Beach.

Few places in the country took the brunt of the recession worse than Las Vegas, but after years of delays following design and refinancing wranglings, the 1,600-room SLS Las Vegas Hotel & Casino is finally scheduled to launch on Labor Day weekend.

Before the crisis, Las Vegas was peaking after a couple decades of development in the luxury sector, forgoing the theme-y 1980s weirdness for a more modern take on 21st century lifestyle trends. By 2007, Las Vegas had clearly shifted direction from The Venetian to Vdara.

The massive CityCenter Las Vegas and The Cosmopolitan of Las Vegas are the most emblematic hotels representing that evolution, leading the rise in occupancy rates in 2013 over 2007.

Because no major hotel developments have happened since them, Nazarian and his team are positioning SLS Las Vegas as a catalyst sparking the next generation of the Las Vegas Strip, catering to a slightly older, more sophisticated, more well-heeled consumer base with a more global lifestyle mindset and higher service expectations.

“This is the birthplace of, and the gateway to, the next era of Las Vegas,” Nazarian said in the Los Angeles Times last June.

The SLS brand wasn’t originally an acronym for anything in particular, although the phrase “style, luxury and service” is now often used in consumer-facing communications. Those three brand drivers are designed to differentiate SLS on the Strip because, in Nazarian’s mind, no other brands deliver all three in-market to his primary Gen X demographic in the 38-45 age group.

“Prior to the Great Recession, the cycle in Vegas was bigger is better, seeing who could out-build each other on the Strip,” says Mike Pavicich, assistant director of hotel sales for SLS Las Vegas Hotel & Casino. “In a large part it created some magnificent mega resorts, but at the same time we also lost that Las Vegas service standard that the city was built on. So Sam’s vision with SLS is to make Las Vegas really the traditional Vegas of years past when people were treated like a name and not a number.”

The SLS Dream Team

Sam Nazarian is a bit of a magician when it comes to brand building and partnerships bringing together disparate personalities in hotel development and aligning them with the SLS mission.

Also, his SBE group owns the physical assets and operates 100% of every department throughout the hotel, which Pavicich says helps maintain more cohesive standards of luxury.

The following people have all worked together on previous SLS projects.

Creative director Philippe Starck is a, if not the, godfather of modern hotel design who ushered in the era of boutique hotels during his time with hotelier Ian Schrager and Morgans Hotels beginning in the 1980s. Starck is working on this project in collaboration with Gensler Architects.

Singer Lenny Kravitz is designing the handful of suites in Las Vegas, like he did in Miami.

Michelin-ranked Chef José Andrés is SBE’s culinary director who helped develop the fine-dining Bazaar brand into one of the most sought-after restaurant reservations on both coasts.

And celebrity chef Katsuya Uechi reprises his successful partnership with another Japanese seafood-themed Katsuya restaurant.

Altogether, SBE operates over 40 restaurant and nightclubs in the Los Angeles area, and Pavicich says Nazarian is integrating all of that expertise into the Las Vegas property.

There is one significant new player. For the hotel’s 24-hour restaurant, Nazarian says it took five years to convince the owner of The Griddle Cafe in L.A. to open another outlet at SLS Las Vegas. The Los Angeles Times says about the iconic original, “The French toast and pancakes are unsurpassed.”

“Sam is a true expert at partnerships, and through his personality, and really through his service model, he convinced some of the brightest and most energetic minds in the hospitality business to come together for these projects,” explains Pavicich. “The result is a very youthful, playful take on modern-day luxury.”

That alchemy of talent is the driving force behind SLS Hotels’ mission to create a true luxury and lifestyle hotel product. However, it’s considerably easier to create that experience at a small property like the 140-room SLS South Beach. Attempting to scale that model to fill a 1,600-room Las Vegas hotel comes with its challenges.

What SLS has in its favor is rabid loyalty among its regular customers with an uncommon fervor on social media. The Las Vegas property already has 59K likes on Facebook and almost 8,000 followers on Twitter, and no one has even entered the property yet.

“The most important thing that we recognize is that we are a lifestyle brand, and we cater to a specific person, who when they experience that lifestyle brand, they become true advocates for the brand,” says Pavicich. “So there’s really this grassroots network of people that are promoting SLS because it is a different blend and a different brand. It’s service that is humble, on a first name basis. It’s not white glove, you can touch it and you can feel it.”

In terms of gaming product, the SLS Las Vegas casino is smallish at 60,000 square feet. That’s somewhat diminutive in relation to the room count, but Pavicich says the overarching goal is completely focused on creating a lifestyle hotel ambience and delivering a more customized, cultivated experience.

“We look at the casino as an amenity to the property,” he says. “Being Las Vegas, it’s always nice to have but it’s not the driving force behind the SLS. Why Sam liked the Sahara so much was the hotel entrance was completely separate from the Las Vegas Strip entrance, so if you’re a hotel guest you never see the casino floor.”

Greg Oates covers hotel/tourism development and travel brand media. He has toured over 1,000 hotels in 50+ countries. email / twitter