Question of the Day - 22 February 2024

Good question. We've been wondering the same thing ourselves. 

There's no doubt that the Miami Beach Fontainebleau Hotel has had an influence on Las Vegas, at least historically speaking. When it opened in 1954, it immediately grabbed the attention, and the business, of the east coast money guys and developers starting to build hotels and casinos in Las Vegas. At the same time, one of the owners of the Fontainebleau, Ben Jaffe, also set his sights on Las Vegas, planning to apply the Miami property's design elements, specifically the luxury and elegance, to a new property at the far south end of the burgeoning Strip. 

Jaffe put up such a big chunk of his fortune that he had to sell out his share in the Fontainebleau. He hired a Miami architect and raised further funds from a Mob-associated casino operator in Louisiana. The total $15 million cost of the new hotel-casino, $1 million more than the Miami Fontainebleau cost three years earlier, earned the property the nickname "Tiffany on the Strip." It was, of course, the Tropicana.  

In the mid-1960s, another Fontainebleau aficionado, Jay Sarno, adopted more design elements from Miami Beach when he was in the process of developing Caesars Palace. 

The Tropicana, Caesars, and to a certain extent the Riviera (1955) are the most direct descendants of the Miami Beach aesthetic embodied by the Fontainebleau, but how many of you knew that? The connection is mostly forgotten today, even with the new Las Vegas hotel having resurrected the brand. 

A modern-day Miami-Vegas connection is also playing out. The Soffer family, big developers in south Florida, acquired the Fontainebleau in 2002. Jeffrey Soffer, chairman and CEO of Fontainebleau Development, immediately undertook a complete renovation of the venerable hotel, with an eye toward attracting back the high-end customer base that had, to a large extent, abandoned Miami for Las Vegas. Like Ben Jaffe before him, Soffer then turned his attention to bringing the brand to southern Nevada; the Soffers had already built the Turnberry Place condo development and the Signature towers at MGM Grand.

The history of the Fontainebleau Las Vegas, starting in 2007 and running up to the present day, has been told in QoDs and elsewhere many times. 

So here we are, with the Fontainebleau finally open and having what appear to be serious birth pains. In the words of Oliver Lovat, an observer of and writer about the contemporary Vegas scene, "The openings of the Tropicana in 1957 and Fontainebleau in 2023 are remarkably similar; both opened into a heavily competitive marketplace and both with the Miami Fontainebleau as inspiration. The original Tropicana set the scene and elevated the market. The Fontainebleau Las Vegas intends to do the same."

Lovat continues, "If any new resort has all the ingredients to succeed, it is the Fontainebleau. By learning the lessons of the Miami namesake, with a clearly defined customer, strong brand equity, clarity of design, proven programming, and an experienced opening team, this new resort has been 70 years in the making."

Perhaps. But his conclusion also leaves a little to be desired and, at least so far, hasn't come to fruition in the way he and the Soffers envisioned. 

For one, the members of the opening team, at least those with experience in running casinos, have all been fleeing for their lives. Also, the brand equity seems to be lost on the Vegas crowd. Bowties, for example, are a unifying element of the interior design (honoring the architect of the Miami Fontainebleau, who wore one daily); does that make any difference to a Vegas crowd? In addition, restaurants like Papi Steak are perhaps iconic in Miami Beach, but when it comes to $1,000 entrees and $95 baked potatoes, the relationship is lost on us. 

Also, here's what Anthony Curtis wrote in this issue of the Advisor. "So what is this place and who is it for? I don’t know. I wonder if the owners do."

So far, at least, it doesn't appear to us that this iteration of "Build it (a Fontainebleau in Las Vegas) and they will come" appears to be a good assumption. It might turn out to be one with more time and changes, but at this point, we're wait and see. How about you? 

Tomorrow, we'll take a deeper dive into the details.