New ownership at the SLS Las Vegas’ say the North Strip resort is operating in the black for the first time in its troubled four-year history.
“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,” General Manager Paul Hobson told the Las Vegas Review-Journal last week as he unveiled details of a $100 million overhaul businessman Alex Meruelo launched shortly after taking control in April 2018.
Meruelo, whose San Francisco-based Meruelo Group also owns the Grand Sierra casino hotel in Reno, bought the SLS from Stockbridge Capital Partners confident that he could turn the failing property around. He immediately began cutting costs, including jettisoning a relationship with W Hotels and Starwood Hotels, which operated one of its three towers under separate management and sales.
Hobson outlined the property’s assets, which include access to the monorail line, additional development in the area, including the Drew and Resorts World Las Vegas, and a proximity to the city’s convention center, which will soon have an entrance on the Las Vegas Strip. And the size of the property is also a plus, says Hobson.
“It’s human size,” he says. “You can get from your car or the reception in minutes, where in some Las Vegas casinos you walk a long way.”
Meanwhile, the remodeling has proceeded quickly, which Hobson credits to Meruelo’s position as sole owner with his own construction company to oversee the work as general contractor.
Converting the 60,000-square-foot casino from its dark, industrial style to a lighter, warmer environment should be completed by the end of April, Hobson said, and will include new layouts for the slot machine and table game areas.
A high-end sushi restaurant adjoining the casino floor will be closed and replaced by a new high-limit area. A nightclub that has stood shuttered for a long time will become a lounge with a VIP room. Jose Andres’ upscale Bazaar Meat will be retained as a “cornerstone” of the property, Hobson said, but it will be joined by a lower-priced Mexican restaurant called Uno Mas as Meruelo seeks to offer eateries with a wider variety of price points.
The hotel lobby is being revamped, along with 200 rooms in the Story Tower, which are being converted from their industrial loft design, which “most guests” did not like, according to Hobson. Corridor and elevator areas in the 1,100-room World Tower are being redone as well.
The towers benefited from a remodeling under the previous ownership, and as Hobson put it, “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.”
The entire remake is expected to be complete by the end of May, he said.
The SLS opened in 2014 at the site of the old Sahara Hotel, which closed in 2011 after it was bought for $400 million by Stockbridge and sbe Entertainment, the flagship of Los Angeles concert and nightlife entrepreneur Sam Nazarian. Nazarian envisioned the SLS as a destination for the young, hip, affluent market he catered to in LA. But the market never materialized, in no small part because of the SLS’ isolated location on Sahara Avenue far from the main Strip action. Efforts to redirect the focus to the Las Vegas locals market were entirely successful either, and when Nazarian exited after encountering licensing difficulties in Nevada—he still owns the SLS name—Stockbridge, which never turned a profit at the property, put up the “for sale” sign.
