On any given summer Sunday, a line forms as early as 7 a.m. and stretches through the Hard Rock Hotel. Patrons are dressed in their Sunday bests—barely-there bikinis and sky-high heels or board shorts and white tanks—waiting to worship at the mecca of the daylife scene, Hard Rock’s weekly Rehab pool party. Almost instantly they flock to the bar, grabbing Big Gulp-sized cups of mixed drinks and soon after, the pool is brimming with boozy 20-somethings. Want to swim? Good luck. But it doesn’t matter, anyway. Swimming is hardly the prime activity at these pools. Having a good time while spending money is.
Just to walk in the door at Rehab will cost you more than $100 on a busy weekend. Let me repeat that: $100 just to walk in the door. A place to sit? That’s going to cost you extra. A bottle of booze will run you hundreds more and somewhere to put that bottle, a cabana perhaps, costs thousands more. It’s easy to see why these pool parties are the new revenue darlings of casino operators.
Today’s Strip pool parties are a much different scene than the resort pools of yesteryear, where the high roller’s wife might park herself for a tan and an umbrella drink before meeting her husband for a show and dinner after a day of gambling. Now, it’s the place for the high roller to be and be seen and yet another sign of their temporary wealth, renting miniature suites in the form of cabanas with bed, flat-screen TVs, around-the-clock bar service and a flock of pretty girls. In the cabana next door, you might find the Kardashian du jour, Holly Madison or Jersey Shore’s The Situation, all cashing in on their 15 minutes of fame.
These pools have their own entrance lines with velvet ropes at the door and have the ability to charge night life prices, raking in as much as, if not more, than some of the city’s biggest nightclubs on busy weekend afternoons. It’s a trend that started on the yachts of St. Tropez and of Miami’s South Beach, where the partying starts during the morning hours and the booze flows straight through sundown, and has made its way to Las Vegas in recent years. They blur the lines of the city’s megaclubs and hotel pools, creating a whole new category of entertainment: The dayclub.
To outsiders, spending a Sunday packed in like sardines in the heat with nowhere to sit hardly seems like a pleasant way to spend a weekend. So what’s the appeal?
That’s the thought that ran through my mind as I stood in the middle of Tao Beach shortly after my arrival to Las Vegas in the summer of 2008. The scene was right out of MTV’s Spring Break circa 1997 with partyers dancing in the tiny pool and unnaturally proportioned women lounging in cabanas. It was my “We’re not in Kansas anymore” moment. I went only once. I might not be their target market (even though I’m their age demographic), but plenty of the “new Vegas” crowd is.
“People want to come out and get some sun by the pool no matter what, but making it a nightclub atmosphere just entices them more. Everybody wants to party and they want to be in the sun while they do it. A lot of pools are kick back and relax pools but these people came to Vegas for a reason,” says Ian Kohoutek, director of night life for Hard Rock, who helped launch Rehab in 2004.
It was like nothing Las Vegas had ever seen. Rehab became an instant hit first among locals, and soon out-of-towners were flying in just to get a piece of the debaucherous scene. The weekly party is now in its eighth season, but sans the reality show that gave it its bad-boy image, and draws as many as 5,000 partygoers on a busy Sunday. Even Rehab’s competitors give it credit for kicking off the daylife trend in Las Vegas.
“What’s driven this over the last eight years is the name has established itself in the market. We can open the door on a Sunday and people flock to the doors, despite who we might have as a DJ or hosting. The biggest thing for us is trying to work our way into the other days of the market. Everyone caught on to the trend that these pools parties actually work and we can make a ton of money with very little investment,” Kohoutek says.
Soon, Wet Republic popped up at MGM Grand, the topless pool party Bare opened at the Mirage and Ditch Fridays launched at the Palms, along with a dozen others. It was like a light bulb went off with night life operators: They realized the same deep pockets that were spending at nightclubs in the evenings were going untapped during the day.
“There are these high rollers who are staying at the Mansion at MGM Grand or the Emperor’s Suite at Caesars Palace and they want to come play at our pool party. They could have lost a bunch of money but they’re still paying cash here for their tab at Rehab,” Kohoutek says. “I’ve had investment bankers from New York, or celebrities or these guys from Silicon Valley who have just sold their companies and now have all this money to spend. These girls see these guys in the cabanas and think ‘I don’t need to buy drinks for the rest of the day.’”
Kohoutek remembers the days when pool parties first came on the scene and you could rent a cabana for $300. Now, everything has a food and beverage minimum, he says. Hard Rock’s Rehab requires its VIP cabana patrons to spend between $1,000 and $20,000 in food and beverage minimums.
Last summer, casino mogul Steve Wynn stepped into the pool party game, in true Steve Wynn fashion, spending $68 million to turn the former entrance of his $2.3 billion Encore Las Vegas into the massive and ultra luxurious Encore Beach Club. The party pool complex features 26 cabanas, many of which are Strip-front, and eight two-story, 350-square-foot bungalows with private pools and private bathrooms that garner five-digit tabs on some weekends. As a result, Wynn Resorts reported a 16 percent increase in food and beverage revenue in the third quarter of 2010 after Encore Beach Club’s opening, surpassing revenue generated in other departments, with the exception of gambling.
Other Strip casinos that have hopped on the night life and daylife trend are also reaping the benefits. According to an annual report from the Gaming Control Board released in February, beverage revenue rose seven percent during the 2010 fiscal year to $909.6 million, for the 39 casinos generating annual revenue of at least $1 million. That number compares to a two percent increase in fiscal 2009.
Read it all..