The newest Strip resort celebrates one year of business. What its management worked on this year could define its future.
Fontainebleau opened its doors one year ago, bringing life into a development project that loomed over the north Strip for nearly two decades.
The 67-story, 3,644-room property was first conceptualized in 2005 by Fontainebleau Development CEO Jeffrey Soffer, who had bought the historic Miami sister property the same year. But the Great Recession stopped development before it could be completed, and the next decade was marked by changing ownership and new visions for the property. The final twist came in February 2021, when Soffer’s Fontainebleau Development once again took over the $3.7 billion project with partners in Koch Real Estate Investments.
Its first year in operation has similarly brought highs, lows and intrigue. Shortly after its opening, the resort dealt with executive shakeups and a difficult introduction to the market. But one year later, resort management believes the direction is clear and prepared to turn first-time visitors into repeat customers.
“Next year we’re in a tail wind because, I think we’ve now established ourselves as a destination with not just great hotel or food and beverage or beautiful property, but it really is about the people that work here and in the service that they provide,” President Maurice Wooden said.
Early months
The gleaming, bright blue building on Las Vegas Boulevard was roughly 75 percent complete when the economy crashed in 2009. Financial heavy hitters took over in following years, including corporate raider Carl Icahn and real estate investment firms Witkoff and New Valley. When COVID-19 related lockdowns affected funding for the firms’ iteration, Soffer swooped in to complete his idea from long ago.
Crews worked on the project for months to make Nevada’s tallest occupiable building feel intimate and navigable. The resort-casino features marble, blue glass, mosaic tiled walls and small bow-tie motifs in accents throughout the space. Food and retail outlets line the casino floor and the second level’s retail district, including multiple new-to-market concepts, like Mother Wolf and Papi Steak, meant to draw customers from their home markets into the property. The 550,000 square feet of convention and meeting space is a short distance from the Las Vegas Convention Center, with a back-of-house set up meant to streamline load-in and load-out times.
The upscale design and emphasis on luxury service wasn’t enough to draw necessary visitor volume into the new space early on. The hotel opened relying on Fontainebleau Miami Beach’s customer database – meaning customers in the Western U.S. may have been less familiar with the brand.
Changes from the top happened soon after. Fontainebleau Development named n the resort-casino’s president roughly six weeks after the property’s opening following several high-profile departures. The industry veteran of more than 30 years, a former chief executive at Wynn Las Vegas, said his initial goals were focused on “pulling the team together.”
“There was some instability,” Wooden said. “It was a team that was comprised of people from all over – the Cosmo, Resorts World, and every different property in Las Vegas and some from outside who had never worked in Las Vegas.”
One of his first fixes was to expand a weekly property leadership meeting from a handful of executives to as many as 20, he said. His goal was to open communication, allow different departments to speak for themselves and connect with each other in a formal setting. Soon after, those inter-department conversations happened organically.
“It becomes a partnership in the team, and everybody’s looking out for each other,” he said. “And then it doesn’t take a meeting to do that, but the meeting reinforces that. If we’re not all on the same page, then how could we expect everybody else to be?”
Fitting promotions
Wooden also brought his outside perspective in when considering other changes. He initially observed that the property’s layout and its service weren’t property highlighted.
“As a local that lives here and was watching this place come together, I knew one of the things that probably didn’t happen the way it should have was the invitation, the communication about what’s going on inside and how special this place is,” he said.
One major change was the marketing strategy, Wooden said. He said the marketing and advertising did not speak to the uniqueness of this market. Early advertising played up a luxurious and modern feel but didn’t show off the property’s amenities.
“The marketing wasn’t on point with how to speak to a customer who comes to Vegas,” he said. “Vegas is extremely competitive. There are great experiences everywhere in Las Vegas. In order to compete with that, you got to show off your great experiences and you got to have people say, ‘I want to be there.’”
Other promotions included casino loyalty tier matching – a practice that automatically awarded new players of a comparable status at competitors’ casinos to the corresponding tier in Fontainebleau’s loyalty program. Initially offered for the first week of business, Fontainebleau created a new and existing loyalty program promotion that lasted more than six months.
Another successful promotion that Wooden intends to extend into 2025 is complimentary valet for customers who dine, shop, gamble and get spa services.
Wooden said he sees Fontainebleau’s showroom – BleauLive – as an avenue to change customer habits, noting that show audiences are overwhelmingly non-hotel guests. The resort has avoided engaging in a traditional residency and instead opted for frequent shows from several artists such as Pitbull, Tears for Fears and Keith Urban. Other regular entertainment includes Power Slap, a Dana White-backed venture in a nascent fighting style.
Upcoming shorter acts include country music singer Thomas Rhett, holiday-themed performances from Jennifer Hudson and two shows from ‘80s pop group Duran Duran.
“I believe that if we do a good job from point of entry to the experience and every one of those touch points, they think next time, ‘Huh. Why am I staying down the street? This place is pretty special. Maybe I should stay here next time,’” he said. “So having a show policy to get people indoors was a big deal.”
Future growth
Industry watchers say the property still has room to grow in the market. Brendan Bussmann, managing partner of Las Vegas-based B Global, said the property’s first year of operations appears to have included promotions and programs meant to attract customers while looking for ways to keep the high-end ones loyal.
“They have continually tried to chart that and part of that’s been because of changes in leadership,” Bussmann said. “The biggest things are obviously trying to attract that customer and then as you do get the customer in that you’re desiring to get, is figuring out how to change their habits and bring them to your facility versus others along the way.”
With empty land on either side of the property, Fontainebleau is at the center of potential growth in the north Strip. (North of the property is more than 26 empty acres currently being pitched as the site of a hotel and NBA-ready arena project.) Wooden said he hopes future development is categorized by unique value adds – not just additional hotel rooms, but a nucleus that can draw an audience of its own.
“People can feel like they I can walk in one and walk to the other, go door to door – not any different than being in the center Strip area,” he said.
Fontainebleau management may have made a purchase in anticipation of future development in the neighborhood. The parent company bought five acres directly south of its current footprint on Las Vegas and Elvis Presley boulevards. Management hasn’t specified its plans for the $112.5 million land, instead describing it as a strategic acquisition.
“It’s a double down on the belief of where we’re going with this property and knowing that there’s a mindset of, ‘Let’s extend this,’” Wooden said.
