When Seminole Gaming CEO Jim Allen approached the Seminole Nation tribal council about buying Hard Rock International in 2007, he warned them that there was a lot of work ahead.
“I told them that it was a growth opportunity, but it was going to take some time,” he says. “They understood that and now it’s just started paying dividends.”
The time is now and Hard Rock International, chaired by Allen, is experiencing a growth spurt.
Gaming expansion has been one of the core elements of Hard Rock’s strategic thinking since the hotel and restaurant chain was acquired by the Seminole Tribe.
Hard Rock currently is comprised of 259 venues, including owned and licensed hotels, casinos, shops and cafes, in 75 countries. The company also owns the Hard Rock Cafe on the Strip (but not the off-Strip Hard Rock Las Vegas, which is being rebranded under new ownership as a Virgin casino hotel).
The most dramatic evidence of the growth spurt was presented last week when the tribe’s original casino, Seminole Hard Rock in Hollywood, Florida, unveiled the company’s most dramatic project to date: a guitar-shaped hotel appropriately named, the Guitar Hotel. It’s the first building in the world with that shape, and it comes complete with LED “strings” that literally touch the sky—30,000 feet up.
Allen’s vision took more than 10 years to come to fruition, but the building is quickly becoming an icon in South Florida, attracting thousands of curious visitors on opening day—including a star-studded cast of guitar smashers, Hard Rock’s signature celebration that opens all its properties. Participants included movie star Johnny Depp, talk show maven Andy Cohen and reality queen Kim Kardashian, who marched in a two-hour red carpet parade.
Design and construction of such a building was complicated and time-consuming. Strict Florida building codes—including a 450-ft. height limit due to the flight path of nearby Ft. Lauderdale-Hollywood Airport and high wind resistance standards—had to be addressed.
Allen gave credit to the lead architects, Klai Juba Wald, which designed the original Seminole projects in Hollywood and Tampa, interior designers the Rockwell Group and landscape designers EDSA.
Hard Rock retained New York-based DeSimone Consulting Engineers to put the puzzle together. Allen remembers a conversation with the founder.
“Vince DeSimone called me and told me I lost my mind,” laughs Allen. “But he did a great job as usual.”
DeSimone accomplished the difficult task, which at times required support columns at wildly different angles, so as much as 40 degrees.
The $1 billion project complete changed even the existing Hollywood Hard Rock casino, which remained open throughout the three years of construction. The result is more than 1,400 rooms and suites, 195,000 square feet of gaming space, a 13.5-acre pool and lagoon experience with overwater cabanas, an ultra-luxury spa and fitness center that spans 42,000 square feet, more than a dozen restaurants, multiple bars, an elegant spa and many other non-gaming amenities, including a new 7,000-seat live performance venue, Hard Rock Live!
But Hollywood Hard Rock is only the latest in new and improved facilities. Two weeks ago, Hard Rock completed an $800-million renovation of the nation’s most profitable casino, Hard Rock Tampa. The following week, Hard Rock Hotel Los Cabos opened in Mexico, and next week, Hard Rock Sacramento at Fire Mountain will debut.
A year earlier, Hard Rock Atlantic City opened, just nine months after the purchase of the former Trump Taj Mahal was completed. Just recently, the property became the second highest performing casino in the market.
Allen traces this Hard Rock growth spurt to management changes made several years ago.
“We were really able to re-structure the company,” he says. “We expanded the hotel and casino divisions. We never want to forget the cafés and the relationships with our franchise partners, but the restaurant business is very difficult on a global basis.”
On the horizon is a casino in Gary, Indiana, a proposal to build a project in Rockford, Illinois, and a second tribal casino in California.
Internationally, Hard Rock is one of three finalists for an integrated resort in Greece at the former Hellikon Airport near Athens, and has won a bid to build an IR near Barcelona in Catalonia, although Allen admits that with political upheaval in Catalonia, the company has more work to do.
Allen says the guitar theme will be replicated in Mexico City and possibly in Japan where the company has been laser focused on the Hokkaido prefecture. While it’s not the biggest region in Japan, Allen says it’s still a worthwhile effort.
“My analogy has always been, everyone who trains for the Olympics wants to win the gold medal,” he says. “But there’s nothing wrong with a silver or a bronze. We felt we has a better chance to plant our flag in Hokkaido than either Osaka or Tokyo, so we’ve spent a lot of time working with local government, vendors and communities.”
Meanwhile, Hard Rock International has its eyes on the Las Vegas Strip, and the timing would appear to be right for the global gaming and hospitality giant to make a move.
Eldorado Resorts has said at least one of Caesars Entertainment’s eight destinations on the Strip is likely to be sold after Eldorado completes its $17.3 billion acquisition of the gaming giant sometime in the first half of 2020. Observers have identified a number of well-known Caesars names that could wind up on the block: Bally’s and Planet Hollywood, to name two, and possibly Paris.
In a recent interview with Bloomberg Radio, Hard Rock Chairman Jim Allen said the Strip is “certainly” is on the company’s radar. “We look at this as a great opportunity for our brand.”
Allen, who also is CEO of Seminole Gaming, Hard Rock’s casino arm, said he finds Planet Hollywood “very interesting” and believes Bally’s also is “one of the possibilities,” given its located on “one of the most legendary corners” on the Strip.
Hard Rock has been rumored to be interested in the Cosmopolitan earlier this year, but insiders say the price asked by the owners, the Blackstone Group, was too high for the Florida operator.
Allen explained to GGB that although interesting, the rights to the Hard Rock name in Las Vegas still have to be clarified and nothing will happen until the original Hard Rock Las Vegas, never a part of Hard Rock International, closes for renovation and rebranding to a Virgin hotel, next month.
Still, a Las Vegas presence for Hard Rock seems to be inevitable.
“I think it would be good for them,” said Michael Parks, senior vice president of real estate giant CBRE and a member of its gaming group. “With Las Vegas being one of the most recognizable leading markets in the world it shows they’re a true player in the global gaming arena.”
Brendan Bussmann, a partner with Global Market Advisors, said a Strip asset could give Hard Rock a “leg up” as it competes for one of those highly coveted licenses.
“Nevada still holds the gold standard of that (gaming) regulatory structure, (and) the Japanese have definitely signaled throughout this process that they want a strong regulatory market,” he said. “Anyone licensed here can operate in a much more meaningful way in Japan.”
The reason for the Hard Rock success is simple, according to Allen.
“We’ve got the best balance sheet in the business,” he says. “And we’ve got the support of a great tribal council that encourages us to invest and make the business stronger.”
