Question of the Day - 24 February 2024

[Part 3 of our analysis of what ails Fontainebleau is also written by David McKee.] 

In the midst of the resort-opening mishegas, reporter Arash Markazi took a deep dive into early-period Fontainebleau and found some serious failings.

For starters, there was owner Jeffrey Soffer’s stubborn refusal to match tier credits from rival properties. This is a serious miscalculation for a megaresort that has neither a gambler nor a hotel-guest database upon which to draw. True, Fontainebleau tried tier matching … for 24 hours. Why did it stop? “Too many people were coming in.” Think about that for a moment or two. Since then, it seems they've straightened out the program and have been tier-matching for a couple of weeks now. Score one for common sense.

Another locus of trouble has been Fontainebleau’s much-vaunted sports bar, The Tavern, home to the $21 (not $24, as misreported in social media) nachos. There, it also costs you $5,000 to reserve a table. Why so much? “This is going to be the place to watch the games on weekends. Lenny Kravitz was here the other night.” So said a staff member to Markazi.

As for the 21-buck nachos, they put Fontainebleau at the center of a social-media firestorm: #nachogate. What happened was as follows. Mark Herman, an executive from the Rio, went to The Tavern and, after a reputedly unconscionable wait of an hour, was presented with a plate of six chips covered in cheese. Six. For $21. $3.50 per chip. Fontainebleau really caught hell for that on X, to the point where it had to publicly apologize and redo the nacho plate with more generous portions. But it will forever be known as home of “the $24 nachos.”

The parking garage has long been a bone of bitter contention. It was the first part of Fontainebleau to be completed, blocking the Strip view of Soffer’s Turnberry Place tenants. Not only was its design arguably unattractive, it proved to be impractical as well. Markazi reported that it was taking 30 minutes to exit the garage, not something that would play well with Las Vegans used to generous and expeditious (if not free) parking. None other than Anthony Curtis, who's driven in and out of casino parking garages tens of thousands of times, had trouble finding his way. "Once you get into the garage (enter from the Strip or Elvis Presley Drive), there’s barely any signage telling you how to get to the elevators. They’re in the corners on the west side of the structure behind closed doors that you’re not sure you should open." Not exactly welcoming.

Fontainebleau’s image problems are compounded by its maladroit marketing. During the rollout, its TV presence was nil compared to that of arch-rival across-the-street-neighbor Resorts World. Social-media marketing was spurned, as online influencers were deemed to be so many will o’ the wisps.

If Fontainebleau PR people were hostile to social media, they weren’t much friendlier to traditional media. Access and imagery were jealously guarded. In the case of British Casino Life magazine, its efforts to cover Fontainebleau’s opening (including putting ex-COO Colleen Birch on the cover) were met with suspicion, which eventually softened only to the provision of outdated renderings and stale pre-digested quotes. Evidently, the megaresort’s debut was supposed to speak for itself. Which it did, but not in the way intended.

While Fontainebleau would seem to have weathered the worst of it, one cannot be certain. Wooden still must be licensed to hold the job he is already holding. Which brings up the skeleton that’s now rattling in Fontainebleau’s closet. 

At Wynn Las Vegas, Wooden was pegged as the prime enabler and cover-up man for Steve Wynn’s sexual predations. This eventually brought Wynn down and the Wooden administration along with him. Will Nevada regulators look the other way, as they are wont to do, or will they have to discipline Wooden, having already made an example of Wynn himself? Consistency argues for the latter, tradition for the former.

Which brings us to the fundamental question Anthony posed in his Couponomy column in this month's Las Vegas Advisor: "So what is this place and who is it for?" (His answer: "I don’t know. I wonder if the owners do.")

Fontainebleau, by every measure, is trying to position itself as a luxury liner, taking on Resorts World on one side and the Wynn on another, with prices that seem even higher than either, if that's possible. But the Wynn's database of high rollers stretches all the way back to 1989 and the opening of the Mirage; plus, the resort has had an impeccable reputation for catering to the money crowd since it debuted in 2005. Resorts World has struggled since it launched in June 2021, but at least has made a number of adjustments to try to interest the premium mass market in filling its 3,500 hotel rooms. Fontainebleau has 3,700 rooms with, at least so far and in our humble opinion, heavy odds in favor of entire floors of vacancies. Filling 500 rooms with its target clientele accustomed to paying those prices? Possibly. A thousand rooms? Rotsa ruck. Three thousand rooms? The thinnest of ice. Thirty-seven hundred rooms? Again at least for now, unthinkable.

Anyway, Fontainebleau has a grace period until next year, when its debt starts coming due. We expect restructuring to start even sooner than that. When you have an underperforming resort with arguably far too many hotel rooms in an inarguably woebegone stretch of the Las Vegas Strip, something has to give. So far, it's been Fontainebleau executives. Soon it may be people lower on the food chain.

All that said, there's no denying it's a gorgeous property. Anthony Curtis again: "The place is loaded with art and color and you can’t help but be impressed by the luxurious Bleau Bar and its massive chandelier overhead" (on the cover of the February LVA.)

If Fbleau can straighten itself out -- its executive revolving door, lack of a coherent game plan, overconfidence, overbuilt, massive-debt deadlines, and as explained in Part 1 of this series its reliance on a now-obscure progenitor in Miami Beach -- the joint might still have a chance. After what it's been through over the past 20 years, it deserves one. But those are pretty big ifs.