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So, Fontainebleau is gorgeous. We say this a lot. It’s a miracle the place opened. It sat idle for two decades.<\/p>\n
The resort’s original developer, Jeffrey Soffer, partnered with Koch Real Estate Investments and opened Fontainebleau on December 13, 2023.<\/p>\n
In the first quarter of 2024, Fontainebleau lost $400,000 a day. The lesson: Never open a casino on the 13th of the month.<\/p>\n
Anyway, it’s been a rough road for Fontainebleau. The most visible signs of distress are 1) the emptiness of the casino, 2) the loss of a dozen key executives<\/a>. In its first six months of operation, Fontainebleau lost (either through firings or resignations) two presidents, COO, CMO, CFO, Chief People Officer, two senior VPs of casino operations and others.<\/p>\n It’s been quieter at Fontainebleau recently, for a couple of reasons. One, Maurice Wooden is president. Two, a havoc-wreaker—Peter Arnell, Chief Brand and Design Officer for Fontainebleau Development—is no longer in the picture<\/a>.<\/p>\n Then, out of the blue, it’s reported Jeffrey Soffer is buying part of the former Riviera site.<\/p>\n This was surprising news for a number of reasons.<\/p>\n In 2023, the LVCVA sold 10 acres of the Riviera site<\/a> to a company called 65SLVB for $125 million. 65SLVB is Brett Torino and Paul Kanavos. These are the folks behind Harmon Corner and 63 at The Shops at Crystals. Retail developers.<\/p>\n Soffer is buying (subject to rubber stamp approval blah-blah-blah from the LVCVA in July 2024) the “back” five acres of the parcel, in other words, the part not on Las Vegas Blvd.<\/p>\n If you do the math, Brett Torino and Paul Kanavos are looking like geniuses, because they recouped nearly their entire investment by selling the least valuable part of their parcel. They still have plenty of room to build some boring retail down the road. Sorry, “jaw-dropping, immersive shopping experience that will change the face of human commerce and echo for an eternity.”<\/p>\n So, why is Fontainebleau spending so much money on a parking lot?<\/p>\n The answer is high roller suite inventory.<\/p>\n The plan is for Fontainebleau to build a bridge to a new structure that will cater to elite gamblers. Think the Mansion at MGM Grand and Fairway Villas at Wynn. If you don’t recognize those places, it’s because we normal humans can’t afford to stay there. Even if you have the money, the highest end suites in Las Vegas can’t be reserved by commoners, they are given away free to whales.<\/p>\n Fontainebleau is spending (wasting) $112.5 million (a shit-ton) because they’re convinced (deluded) the reason they haven’t been able to steal big players from other casinos (Wynn) is they don’t have the suite product to attract them.<\/p>\n They haven’t said that’s the reason for buying the parcel, but that’s the reason.<\/p>\n Fun fact: Justin Timberlake was paid $6 million to perform at Fontainebleau’s opening night gala. That night, he stayed at Wynn. Awkward.<\/p>\n At the moment, Fontainebleau is scrambling to solve for a simple question: “Why isn’t this working?”<\/p>\n The answer is almost as simple: Las Vegas isn’t Miami, “build it and they will come” isn’t tethered to reality. Oh, and no foot traffic.<\/p>\n Speaking of droning, we’ve droned on endlessly about Fontainebleau’s lack of casino and hotel databases, along with the fact Fontainebleau has zero experience in the casino resort business.<\/p>\n The massive losses have, of course, resulted in finger-pointing and chaos.<\/p>\n If your resort isn’t drawing foreign gamblers, fire the person responsible for going after them.<\/p>\n Well-regarded whale hunter Marika Cardellino (Sr. Vice President Latin Europe Middle East) has been fired from Fontainebleau, we’re told.<\/p>\n — Vital Vegas (@VitalVegas) June 9, 2024<\/a><\/p><\/blockquote>\n\n