January 29, 2019 - 8:09 pm
Updated January 29, 2019 - 8:50 pm
Long-struggling SLS Las Vegas has finally turned profitable as new owner Alex Meruelo invests more than the initially planned $100 million to revive the Strip property.
Meruelo took control of SLS, formerly known as Sahara, in April from a San Francisco-based investment fund, telling regulators he was confident he could restore the fortunes of the once famed property.
The Reno businessman cut costs, including ending the relationship with W Hotels and Starwood Hotels, helping lift the property into the black. The W, which operated one of the property’s three towers, had its own management, accounting and sales team, said new General Manager Paul Hobson.
“I am happy to say that a property that was once known for the staggering sizes of its losses has turned [cash flow] positive in the last few months,” Hobson said Tuesday as he showed off the latest changes.
SLS opened in 2014 to much fanfare but never made an annual profit through 2017 due in large part to its distance from the rest of the casinos on the Strip. The SLS is about 1.5 miles from Wynn Las Vegas and Encore, the nearest casinos on the eastern side of the Las Vegas Boulevard.
The property is surrounded by empty lots and large-scale construction projects, including The Drew and Las Vegas Convention Center expansion. The center’s extension and The Drew are forecast to open around 2021.
Hobson said he is optimistic the SLS will benefit once the projects are completed. UNLV Hospitality Professor Mehmet Erdem agreed, saying the North Strip will likely thrive again in coming years.
“Those projects are going to change the dynamics of the whole area,” Mehmet said.
Dark out, light in
Meruelo began the revamp almost immediately after taking control of the Strip property, launching upgrades to the casino floor, restaurant area and hotel buildings. Meruelo initially said he would invest up to $100 million into the property.
“I think we’re going to blow through it here,” said Hobson, referencing the investment forecast.
Hobson said Meruelo is able to move quickly with the construction pace because he doesn’t have to answer to anyone. Meruelo is the sole owner of the SLS and his construction firm is the general contractor for the upgrade.
The new owner is covering up the dark, industrial, style of the 60,000-square-foot casino floor with a lighter- and warmer-colored ceiling and carpet. The casino floor revamp should be completed by the end of April, Hobson said.
The property will close high-end sushi restaurant Katsuya located right off the casino floor and turn it into the new, high-limits area, Hobson said. The long-shuttered Foxtail nightclub will be converted into a lounge with a VIP room, said Nancy Paolino, founder of Innovative Designs, which is working on the property revamp.
SLS will keep the upscale Bazaar Meat By José Andrés, which is a “cornerstone” for the property, and open a new lower-priced Mexican restaurant called Uno Mas by March, he said.
Meruelo is seeking to offer restaurants with a wider variety of price points to keep guests eating at SLS more often.
The property is known for its high-end restaurants, and that can make it hard to get hotel guests “to eat more than one meal” during their stay, Hobson said.
“They might have one night out in one of the gourmet rooms, but what are they doing for lunch tomorrow?” he said.
Hobson said the company is renovating 200 rooms in the Story Tower that “most guests” did not like for its industrial loft design. The revamp should be completed by the end of May, he said.
The corridors in the The World Tower, its largest with 1,100 rooms, will be redone as well. That job is expected to be completed by the end of April, he said.
Hobson said the property’s towers were overhauled several years ago by the previous owner and thus are still in good shape.
“We have some pretty good bones to work with. That allows us to focus on the more visible items that I think will impact the guest experience,” he said.
On the issue that has most intrigued Las Vegas — a possible property name change — Hobson was evasive, saying the company is considering its options.
The SLS brand is owned by Sam Nazarian’s company SBE, as is Katsuya and The Bazaar by Jose Andres. Meruelo used the working name Grand Sahara — a reference to property’s original name — when applying for construction permits last year.
Hospitality experts have said it makes little sense to change the name until the overhaul is completed.