There’s no all-encompassing explanation. One reliable source theorizes that CEO Alex Yemenidjian is learning the hard way that running a smaller, low-revenue casino is quite a different thing from overseeing a well-capitalized, 5,000-room megaresort – as he did as president of MGM Grand from 1995 to 1999. Ten years is also a long time to be away from the Las Vegas Strip. When Yemenidjian left MGM Grand, there were many more stand-alone properties like the Tropicana and the giant wave of consolidation had not hit. Now he must go against four massive conglomerates – MGM Resorts International, Caesars Entertainment, Las Vegas Sands, and Wynn Resorts. All of them have outlying "feeder" casinos and loyalty programs that extend internationally. Making a go of it in Las Vegas in 2011 with just one casino is not a venture for the faint of heart.
More basically, Yemenidjian and departing President Thomas McCartney have made a series of poor choices in their business partners. The biggest of these was Jay Bloom, who was in charge of both the Tiffany Theater and the Mob Experience for a time. Except for the aforementioned Gladys Knight, not one entertainment act at the Trop has shown staying power and Knight’s run was cut short when management decided it wasn’t worth the cost to keep her on for one week of dates in November and another in October. Still, she’s done better on balance than PR disaster Paul Rodriguez (who trashed management on the media night of his short-lived Trop gig) and a vocally ruined Wayne Newton, who did his reputation no favors with Once Before I Go.
Other entertainers who have butted heads with Trop management include Anthony Cools and Bobby Slayton. Bloom-booked acts Yesterday (a bad Beatles tribute band) and Sideswipe (a martial-arts show) were box-office stiffs. Garrett is the exception who is leaving on good terms, having nothing but kind words for Trop brass and saying, "This was strictly a business move … We have [MGM] seven properties selling tickets as opposed to one." He also has longstanding ties to MGM, especially to MGM Grand prexy Scott Sibella.
The Mob Experience has had to downsize staff by 90%, close off most of its space, scrap its interactive features (which were subsequently repossessed by creditors) and slash ticket prices. The costly attraction was roundly panned when it opened and customers have stayed away in droves. Projections of 840-960 visitors turned out to be grossly over-optimistic. On a good day, the Mob Experience pulled in 320 spectators and now, after the cutbacks, is doing roughly 140 ticket sales a day.
The intricate financial arrangements that made the exhibition possible have collapsed into a quagmire of lawsuits and one lender is even attempting to foreclose upon the Trop itself, which is owed a half-million dollars in back rent. Having filed Chapter 11, the $25 million Mob Experience is likely to change hands for $2 million and will never come close to breaking even.
The most heavily touted of the Trop’s new attractions, Nikki Beach, wound up being its highest-profile misfire, leading to McCartney’s exit. The Las Vegas Sun reported that the club "had trouble sustaining momentum." The prime Tropicana Avenue parking lot that was dedicated solely to Nikki Beach customers was half-empty on a good night. The Trop recently severed ties with Nikki Beach, sacked its staff, and brought in a new vice president of nightlife marketing and operations (Richard Wilke), along with Vegas nightclub veteran Joe Bravo and marketing exec Joe Pecaro, whose previous Strip promotional efforts include Jersey Boys and Peepshow.
It’s worth noting that Yemenidjian inherited a hotel-casino in terrible condition and one from which previous ownership had evicted nearly all of its resident entertainers. Two years and $165 million later, the Trop looks much better than at any time in recent memory. However, the attempt at nailing down a "South Beach" (read: Latino) market niche hasn’t taken hold and the Trop has gone from being the Comeback Kid to a case study in "What Went Wrong?"
There’s one bit of hope amidst the gloom: Next month, a new, $5 million spa opens where the infamous Trop buffet used to be. Glow, a Mandara Spa-branded hangout will be the last phase of the casino’s $165 million refit to be introduced. Hopefully it will have better luck than previous signature attractions have enjoyed.
