Dayclubs Part 2
In yesterday's QoD, we examined the origin, evolution, and popularity of the Las Vegas dayclubs. Today, we delve into the business aspects thereof.
Are they successful. In a word, extremely. The economics are particularly attractive. The hotel pools already existed, so space didn't have to be freed up and developed. The daytime hours previously generated little revenue. Alcohol markups are enormous. Daybeds and cabanas and daybeds can be rented by the hour, so up to several times in a single dayclub session and cabanas in particular can cost as much as a high-roller suite (and just hosed off after hours).
In short, the biggest dayclubs have become profit centers comparable to major nightclubs. And their proliferation proves it. This year alone, two major venues opened: Omnia Dayclub & Skybar at Caesars Palace and Tailgate Beach Club at Mandalay Bay. Both are operated by third parties, which the casinos like; Tao Group Hospitality (Omnia) and Clique Hospitality (Tailgate Beach) are in the entertainment business and have decades of experience designing and operating these kinds of amenities.
Case in point. Over grand-opening weekend at Omnia (May 15-17), the 46,000-square-foot multilevel dayclub hosted LeBron James, Sofia Vergara, and Ashley Graham; the festivities climax when Colby Raha jumped almost 100 feet on a dirt bike. And the May 16 debut of Tailgate Beach featured a performance by Snoop Dogg.
A recent story in the Review-Journal cited some numbers. "A premier Las Vegas dayclub can generate between $40 million and $70 million in annual revenue, even though most operate only six or seven months of the year. When paired with a connected nightclub, a single complex can clear $80 million to more than $100 million annually." Mid-size clubs like Marquee (Cosmopolitan) and Ayu (Resorts World) typically fall in the $25 million to $45 million range annually. Encore Beach Club (Wynn) and Tao Beach (Venetian), at the top tier, typically gross more than $1 million on a single Saturday during peak months. According to the R-J, 60%-70% percent of a dayclub’s revenue comes from cabanas and VIP table minimums; alcohol at markups as steep as in the nightclubs, accounts for almost the rest. Then there's the admission fee.
And with those astronomical sums, you know they're paying a pretty penny to the joints.
Finally, the question that everyone wants to know: Do people go straight from the dayclub to the nightclub? Sure, though we suspect that not as many as casino marketers would like you to believe. The Vegas fantasy image is: dayclub from noon to 6 p.m.; dinner, nightclub from 10 p.m. to 4 a.m.; rinse and repeat. A fraction of hardcore partiers definitely do this.
However, the reality is that six hours in 100-degree heat while drinking heavily tends to take its toll. The more common pattern is: dayclub; return to room, nap, shower, dinner, nightclub. Alternatively, the "Vegas party shift": dayclub, dinner, gambling, bed.
Still, the casinos long ago discovered that the dayclub actually helps the nightclub. Those who spend the afternoon at Encore Beach Club are already psychologically committed to a party weekend. They're more likely to buy nightclub tickets later that night at XS or another venue. Indeed, many resorts deliberately market "day-to-night" packages; after all, they own both venues.
But among Vegas visitors, they're in the minority. Most people, even those in their "golden twenties," discover after a day or two that the human body has limits. Even then, the dayclub phenomenon changed Las Vegas from a city that partied mainly after dark into a city where the party now starts before lunch.
