By Robin Leach (contact)
Thursday, March 5, 2015 | 2 a.m.
“Bar Rescue” reality-TV star Jon Taffer perhaps more than anybody else knows the nightclub and bar business inside out. For 30 years, he’s helmed the annual industry convention Nightclub & Bar Show and presided over its booming business, massive expansion and staggering growth.
In Las Vegas, it’s been more incredible than any other city on Earth, with revenue increasing into the billions.
But the man who leads a team of experts in saving failing bars has never had his own venue on the Strip, which sits at the center of the universe when it comes to the fabulous fun fueled by champagne wishes. That’s about to change, however, because Jon will soon announce the arrival of what he plans will be the “ultimate bar” and send the industry soaring even higher.
As he finalized plans for the 30th annual Nightclub & Bar Show in Las Vegas from March 30-April 1, Jon took time out for a lengthy conversation with me about what he believes are the big changes ahead.
As one of the founders of the Nightclub & Bar Show, he’s promising that it will be the biggest industry event Las Vegas has ever seen. Attendees will represent more than 200,000 locations from the United States and 56 countries, with total annual beverage sales of nearly $20 billion.
I don’t want to limit our conversation just to nightclubs. What else has changed in the entertainment or dining scene or pop scene in the last 12 months?
I think there is something else that’s really significant. Las Vegas is famous for some of the greatest nightclubs in the world, you know that, but we’re not famous for the best bars in the world. Think about it. Las Vegas isn’t known for great bars; we’re known for great nightclubs and restaurants. I believe in the past 12 months, we have seen an effort to do that. We’ve seen a lot of bars open on the Strip, and none of them have claimed that spot.
I believe that in the next 10 to 12 months … BTW, I’m going to be one of them entering the marketplace. Somebody is going to claim this spot and is going to have the equal prominence as a bar that XS or Hakkasan has as a nightclub venue. I see that as a major shift in Las Vegas in the next year or so, and it’s started, but it hasn’t matured yet.
What is the bar you’re going to enter the war?
I’m not going to say what the name is just yet, I’m about three weeks away from the formal announcement. I promise that I will give it to you first.
Thank you, and I’ll hold you to it.
I know you will!
We all know what the physical difference is between a bar and a nightclub, but what does a bar do that a nightclub doesn’t and vice versa?
First of all, bars are far more interactive than nightclubs simply because the music volumes are lower. The environments are a little bit more intimate. There tends to be more standing space than VIP-defined areas. Areas are not roped off like in nightclubs where people are not allowed to go to certain areas or interact with people.
Bars are more intimate and interactive, and you have a better chance at meeting people and creating relationships and bonding in a bar. Bars to me create a level of social interaction that nightclubs don’t. Nightclubs interact with guests more than the guests interact with guests in a nightclub. In a bar, the guests interact more with each other than the venue does with them.
Does this next wave of bars, that is obviously coming because they’re trying to improve on what they’ve built already, is that the vanguard, as it were, the front-runner for the change of shift that might have to come in the nightclub industry?
I think it is yes. When I look at other cities, Robin, you see a lot more smaller bars, more intimate spaces, woody, warm kinds of environment coming up. Even places like the Edison in L.A. is a good example of that. There are a lot of these types of venues in New York.
They’re very sophisticated, they work well for affluent as well as middle market, and you stay there for four to five hours. You eat, you drink, and you don’t pop in and leave and you don’t get fried in an hour and a half because of BPM and stress upon your eardrum. It’s a very different environment.
But a Las Vegas bar can’t generate the kind of money a Las Vegas nightclub can in any sense of the word? Yet it would have to do some kind of big business to afford the skyrocketing rents in this city.
Well, two things. I disagree with your first premise. A bar can have a dance floor on it and can shift into a late-night model at 11 p.m., whereas a nightclub like XS or these other venues, they’re meaningless until 10 p.m. A bar can generate money in a lunch, Happy Hour afternoon, 8 p.m., and then go through metamorphosis and turn into a higher-energy venue at night.
I would suggest that the bar can do revenue 18 hours a day seven days a week versus the nightclub doing revenue five to six hours a day on fewer days per week. So the sales per hour may be lower, the sales per foot might be lower, but the overall annual sales I think would be equal as or greater if you do it right.
Yes, a bar is open seven nights a week, and a nightclub is open three nights a week.
Bingo, and there’s many more hours a day. So what if that bar turned into a high-energy environment at 10 p.m. to see that late-night business? Bars can take on different personalities, and they can even take on different personalities in the same day.
You can chuckle. Are you dropping hints about what you’re doing?
I’m chuckling. Yes!
Let’s go to the other portion of the entertainment scene in Las Vegas: dining. How has it gone the last 12 months, and what’s ahead?
We’ve obviously had the chefs come in. Las Vegas has become, I believe like you, the Culinary Capital of the World. We know that now. Every great chef is represented, every great cuisine is represented, but what we’re seeing now is almost similar to what I talked about with the positioning of bars and nightclubs.
For example, Gordon Ramsay has three different positioned places. He has his high-end steakhouse, his middle market in his pub, and the more casual environment burger joint. So I think we’re going to find that all of these chefs are going to start looking not only at the high-end facilities, but also middle market.
Bobby Flay is another example with his burger place, to come in and capture that middle-market lunch segment. I think we’re going to see all these star-chef brands and these restaurant brands be expanded horizontally into burger places, more mid-scale concepts. I think that Las Vegas is going to focus much more in time on a real separation between middle-market offerings and luxury or higher-end offerings.
Putting a ribbon around what you’ve told me about nightclubs and restaurants and pubs or bars, what does that say about how our city deals with different income levels of guests coming to spend time and money here?
That’s where we have an opportunity as a destination. For example, I know that if people come here from Los Angeles and they’re going to stay in one of our hotels, they’re going to pack three to four in a room. Let’s say that 24- to 30-year-old weekend crowd is going to come and stay in a reasonably inexpensive hotel, but then they’re stuck spending $2,000 that night in a nightclub.
They can’t come back for six months, Robin. They can’t afford it, but if they could get that experience for $800, they might be back in a month. So I suggest it impacts the frequency of the destination for that middle market. The fact is that that type of an experience is really expensive in this town.
It’s become a very expensive city to play in, but it’s still a very inexpensive or reasonable city to just visit and not play.
That’s right, so I’m suggesting that if we created some mid-level, XS-like types of experiences, we could create more frequency out of that middle market. I think that’s a real opportunity. I bet you agree.
I do agree. I’ve always worried about where we draw or define the line between expensive and gouging our visitors.
Yes. We walk that line all the time.
What is the difference between running a bar on the Strip and off Strip in the valley, which is filled with bars? There’s no shortage of bars like Sean Patrick’s to PT’s.
There is a real difference between bars here. So many bars in this town have slot machines, and the fact is we know the average slot machine is going to provide $30,000 to $50,000 a year in profit, so typically that’s a pretty average number. So if you have 10 to 12 machines, you’re looking at $300,000 to $400,000 a year in slot income that doesn’t exist in any other market.
So right out of the gate as a local bar, you’re $300,000 to $400,000 ahead of another bar in revenue. Next, when you’re playing that machine, you’re going to stay for a few hours, so you have built-in length-of-stay for gamers. That gaming element is a huge factor on daytime business, length of stay and cash flow. That’s why Dotty’s exists, I believe. Take the gaming model out of all of those bars, Robin, and they’d all be gone.
PT’s, Dotty’s, they’re not making their money on food and drinks. The fact of the matter is that the Strip, and this is hard to say because I’m a local bar guy, nobody can compete with the employee nights in the Strip venues. The fact is that as good as our local bars are, we’ve got great ones, Robin, the fact is that the 600-pound gorilla can empty them out at any time they want.
At the end of the day, the local bars are just that; they’re very local. They tend to stay within three or four blocks of their neighborhood. They tend to have a very loyal following. They tend to perform moderately, but there’s not a lot of local home runs out there. Don’t you agree?
Yes. I don’t drink locally. I don’t go into a bar like I would back home in England to a pub.
That’s exactly my point. Then you have an SLS come into the market where they’re trying to target locals. The whole campaign was around locals and such. You walk into the facility and walk around it, and it’s not a local’s kind of venue. Exclusivity and locals tend to conflict with each other.
What about dealing with different age demos? As we veer away from nightclubs and go to more intimate places, as we bring super bars to the Strip, nightclubs tend to top off with their audience at 30 to 35, and the bar presumably goes much higher. People ask me where can you go for a nice drink in Las Vegas on the Strip, and you can’t tell them. There’s no place to tell them to go.
That’s my whole point. We don’t have great known bars. You wind up going to Chandelier if you’re in Cosmopolitan or one of the casino bars. You know what’s interesting about a bar, and you’ll smile because of where you come from, you know what a snug is, right?
Remember when you built pubs in Ireland and England, they would put little walls in between the tables, and they were called snugs. So the priest could be in one room and a bunch of drinking crazies would be in the next one, and they could all co-exist because the pub was demographically broad. There were ways to create little visual separations in areas so the old and the young could be together, the priest and the partier could even be together in the same pub.
Pubs and bars; you know you can play mainstream music that has a demographic reach from 21 to 65. That isn’t hard to do in a bar environment, Robin. You can create an interior that has that kind of a broad footprint. Beverage menus, food prices; so the fact of the matter is that bar can have a very, very broad demographic base where a nightclub is limited in its appeal.
If you look at the demo median age in Las Vegas, we track closer to 39 as a destination. If these nightclubs break off at 31, then I suggest that there’s a huge market in over 35 that isn’t being properly captured during nightlife. I believe that.
I think it is. I think it’s a natural gestation of a human being that when they reach 30, they stop with their nightlife all week long.
I always say on “Bar Rescue,” my stats are once you cross 34, forget about it. I have no shot at frequency. The fact of the matter is that in Las Vegas, that’s not true. They’re coming here to drink and party, that’s their purpose, and we’re not seizing it properly for the older 35 demo. I believe that.
Irish bars seem to dominate the pub scene in the Las Vegas Valley. No other nationality has come up with a rival run yet. How do you broaden the appeal of bars to others?
We’ve got to come up with a concept that makes sense. The Prohibition bar 1923 in Mandalay Bay that Holly Madison did, now she’s not involved in, tried to do it, but didn’t do it right with burlesque shows and such, but the fact of the matter is, you can build an American pub and the word pub sends a message.
I could create an Italian pub, Robin, and the word pub sends a message. Pub tells you it’s warm, it’s cozy, it’s approachable. The word pub isn’t used often enough. To me whether it’s an Irish pub or an American pub or even an Italian pub, I know it’s going to be warm, approachable, not overly expensive, so the word pub is powerful I believe in sending a message.
A nightclub sends a very different message. Think of the conventions here from November to March, think of how many of them are looking for that really great bar experience.
I think, though, that in the ladder of social talk, pub is at the bottom, and bar is higher up?
I think it’s all how you position the word pub and the branding, the name, the logo, and the way it looks.
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Robin Leach has been a journalist for more than 50 years and has spent the past 15 years giving readers the inside scoop on Las Vegas, the world’s premier platinum playground.
Follow Robin Leach on Twitter at Twitter.com/Robin_Leach.
Follow Sun A&E Senior Editor Don Chareunsy on Twitter at Twitter.com/VDLXEditorDon.
By Robin Leach (contact)