It's been a long time since anyone did anything in Las Vegas on purpose. Ever since the spring of 2008, casino investors have felt like characters from The Hangover, trying to figure out what they got themselves into and how the hell to get out of it. Deutsche Bank's loan to a real estate developer went so bad that the bank wound up owning a half-built casino. Unable to offload the project, it currently operates the Cosmopolitan Hotel. In 2009, Caesars Palace halted construction on its new Octavius tower and is only getting around to finishing the job now.
After the fall, Alex Yemenidjian was the first person to actually invest in the Strip on purpose. He and Canadian private equity billionaire Gerald Schwartz bought the Rat Pack-era, once-classy Tropicana out of bankruptcy in 2009 after guaranteeing at least $75 million to update the property. It was actually their 24th-favorite available property in Vegas, but they'd looked at the first 23 before the crash and considered them overpriced. Then the company that owned the Tropicana went bankrupt, and Yemenidjian and Schwartz bought it in cash. By that point, though, Yemenidjian remembers that the hotel had duct tape holding the carpet together every few feet. And a note in the employee lounge offering a bounty for each bedbug brought back alive.
Yemenidjian and Schwartz ended up spending $180 million to purchase the iconic brand, the resort's six acres of grounds, a great address on a crowded corner of the Strip, and a lot of duct tape. But instead of building a Gucci boutique, booking Cher, or importing a Mario Batali restaurant, the duo went full middlebrow. The new Tropicana, which reopened in late May, features nice rooms for $70, $5 blackjack tables, and Gladys Knight—on purpose. "Between the low end and the snob," says Yemenidjian, "is the vast majority of this country."
Yemenidjian isn't content operating a really good pretty good hotel: He wants the Tropicana to be the best damn pretty good hotel on the Strip. After all, the chief executive officer is not a $70 room guy: He's friends with Kirk Kerkorian, has slicked-back hair, and wears pocket squares. A former studio head, Yemenidjian proudly displays Hannibal Lecter's mask on the coffee table in his office, where giant framed quotes line his walls—including Oscar Wilde's "Moderation is the last refuge of the unimaginative." In a Tropicana employee lounge, the walls are also lined with framed quotes, including some from Alex Yemenidjian.
To let the hotel's employees know he was serious about change, Yemenidjian began the Tropicana's renovation by spending $1 million to upgrade its staff lounge and dining hall. Then he made everyone read Raving Fans: A Revolutionary Approach to Customer Service. Then he fired 40 percent of them. "Our job is to keep employees out of their comfort zone," he says. "We act as if the whole company's existence depends on the employees taking advantage of the opportunity to pick something up from the floor."
Yemenidjian and Schwartz spent many more millions developing a South Beach theme at the Tropicana, mainly because, they thought, regular people like Florida. The hotel also has some Cuban touches, since regular people think Cuba is exotic. "I made three trips to South Beach for research. I learned everybody loves casual elegance," Yemenidjian says. "I can't tell you where else I went, or I will go to jail." The rooms are nearly all white, with plantation shutters. "There must have been a time in the last 10 years when there was a sale on chocolate brown furniture," he says. "We managed to miss the sale."
The hotel's non-Miami touches are simple mid-market plays: the 25,000-square-foot Las Vegas Mob Experience interactive museum, a Starbucks, and Brad Garrett's Comedy Club. Garrett, who began his career by opening for Frank Sinatra at the Desert Inn, is best known to the middlebrow zeitgeist as "that guy from Everybody Loves Raymond." "What made this incredibly attractive to me was the mid-range clientele they were going for," says that guy from Everybody Loves Raymond. "Those people have been forgotten for the last 15 years in Vegas. The high rollers who stay at the other properties go see Cher, they go see Cirque du Soleil, or they go to Sapphire, the titty bar," he says. "The $150 shows are more of a destination. You have to put a shirt on."
At the Tropicana, Garrett walks through the hotel casino handing out free passes. "I'm not Chris Rock, but these people come from Des Moines," he says. "They watched Raymond for years. That's what Vegas used to be about." Gladys Knight has done so well that Yemenidjian recently extended her contract. The hotel's other showroom features junk-rock band Recycled Percussion, a runner-up on America's Got Talent. America's Got Talent winners are for snobs.
So far, the middlebrow mind trick is working. The Tropicana's occupancy rate has gone from the mid-80-percents before the renovation to around 90 percent. The hotel, which used to be ranked in the bottom fifth of Vegas properties on TripAdvisor, has now moved up to 20th place out of 288. Perhaps the next decade in Vegas will be full of middlebrow investments, with John Tesh showrooms and 1,000-seat Olive Gardens. "The history of Las Vegas is the destruction of the old and the building of the new," says Jeremy Aguero, principal analyst at Vegas-based market research firm Applied Analysis. "But in the near term, there is no opportunity to build a new mousetrap. You have to fix an old mousetrap." It's a good plan, but no one else is doing it. Down the strip, the 59-year-old Sahara is locking its doors. Sam Nazarian, who owns the successful SLS hotel in Los Angeles, tried to reinvent the property as a high-end destination for young clubgoers. Alas, despite the way it seems, there actually aren't enough Kardashians to fill a hotel every single night.
The only outlier from the Tropicana's rebranding plan is its 1.8-acre Nikki Beach, a restaurant/bar/club/faux beach that has outposts in South Beach, St. Barts, St. Tropez, and Marrakech. This is because nightclubs—particularly daytime poolside ones—are Vegas's only growth industry, and everyone is trying to lure the chest-waxing set with more swim-up tables and strippers. On June 2, porn star Sasha Grey deejayed at Nikki Beach while people drank $3,500 magnums of Cristal delivered by "wine angels" who arrived on an overhead swing. Outside, women in bikinis and orange see-through gowns danced near a blackjack table next to a stripper pole. "Of course there's a stripper pole," says Tropicana President and Chief Operating Officer Tom McCartney. "You'd be surprised if there weren't." That's a compromise the middlebrow just won't make.