Fontainebleau's Multi-Billion Dollar Vegas Gamble Looks Like a Bad Bet
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LAS VEGAS – Whenever I tell people I live on the Las Vegas Strip, their eyes widen as they start asking me if I live near Caesars Palace, MGM Grand or the Bellagio. You know, places they’ve been to recently.
Not exactly, I tell them. I live in a condominium on the north end of the Las Vegas Strip. That’s usually followed by a confused look before I explain that the North Strip is where you’ll find The Strat, Sahara and Circus Circus.
That’s when I get a series of questions ranging from if they still have circus acts at Circus Circus (they do) to if there are still thrill rides atop the hotel formerly known as the Stratosphere (there are). The general consensus is that the last time most of them have been to the North Strip is when they were driven there by their parents.
There’s one property, however, that is supposed to change all of that and bring the masses to the North Strip – the recently opened $3.7 billion Fontainebleau Las Vegas.
The view from my condo is of the Fontainebleau’s porte-cochère, which means my view has been of a construction zone and later a deserted skeleton of a building since 2007. Plans for the hotel, which is the sister property of the famed Fontainebleau Miami Beach, were first announced in May 2005. Construction began in February 2007 and the 68-story building was topped off in November 2008. It was slated to open in December 2009 but filed for bankruptcy in June 2009 during the global financial crisis.
There were calls during the 2010s to demolish the 70-percent completed building. It had become an eyesore and a monument to the “Great Recession,” but construction resumed prior to the pandemic and the Fontainebleau Las Vegas finally opened its doors on Dec. 13, 2023.
With my condo being a short walk from the hotel’s doors, I talked to several of the people who live in my building about the Fontainebleau and the potential that it could revitalize our neighborhood. They all started their review with a complaint, which is never the best way to make a first impression.
One of the biggest complaints was their refusal to status or tier match, which is where one hotel matches the status you have at another hotel in order to gain your business. It is a fairly standard practice by new properties as they try to attract business from locals and regulars already established at other properties. It’s especially important for a hotel like the Fontainebleau, which has no database of Las Vegas locals and regulars like MGM and Caesars. It’s the easiest way to fast track a vital process for any new property. Gold status at the Fontainebleau, for example, allows for complimentary parking and waived resort fees. It may not seem like much but little things like that go a long way in bringing in locals or regulars from other properties.
After originally stating they wouldn’t do tier matching, they quietly did it for 24 hours before suddenly stopping it. A Fontainebleau casino host confirmed to me that they did tier matching for one day after opening their doors to the public but stopped because “too many people were coming in.”
Here I was worried that no one would come to the Fontainebleau after their big grand opening. Meanwhile, they’re basically telling locals and Vegas regulars looking to frequent the property instead of their regular spots, “Nah, we’re good.”
After talking to the casino host, I walked around the property, which has beautiful white floors that are constantly being scrubbed by employees in a thankless effort to remove the scuff marks left by roller bags and shoes. The casino floor was a ghost town as a casino host explained the decision. “It’s not my call,” he said. “The last place I worked tier matched all the time and we were way busier than this. I’ve turned down a lot of locals who live nearby and want to come here and are now angry. It’s crazy but it’s not my call.”
I walked over to The Tavern, the Fontainebleau’s sportsbook wedged into an upscale bar and restaurant, and tried to reserve a table to watch the NFL games on Sunday and was told it would be $5,000 with a $1,000 food and beverage minimum for a table for four on Sunday. If I wanted a couch, it would be $10,000 with a $2,000 food and beverage minimum. I waited for the hostess to laugh and let me in on the joke as I looked around at the mostly empty sportsbook but she was serious.
“This is going to be the place to watch the games on weekends,” she said. “Lenny Kravitz was here the other night.”
Kravitz had apparently stopped by during the hotel’s star-studded grand opening party that was also attended by Tom Brady, Kim Kardashian, Kendall Jenner, Ivanka Trump, Cher, Tyga, Alice Cooper, Keith Urban, Sylvester Stallone, Paul Anka, Bryan Cranston and Aaron Paul. Justin Timberlake was reportedly paid over $6 million to perform at the party and later ruffled feathers when he posted a picture of he and his wife, Jessica Biel, returning to their hotel room at the Wynn – not at Fontainebleau.
I remember Kravitz being front and center at the grand opening of another North Las Vegas hotel, the SLS, down the street from the Fontainebleau nearly a decade ago. It had been known as the Sahara from 1954 to 2014, and had a grand opening party on Aug. 22, 2014 with similar fanfare as the Fontainebleau. While the Fontainebleau is hoping to bring a slice of South Beach to Las Vegas with its established name and well-known restaurants and lounges such as LIV, Papi Steak and Komodo, SLS tried to bring a slice of Hollywood to Las Vegas, opening with Foxtail, Sayer’s Club, Katsuya and Bazaar by Jose Andres. The hotel failed spectacularly and was sold less than three years later in May 2017 to Alex Meruelo and Meruelo Group, which immediately changed the name back to Sahara and quite literally took a crane to any vestige of SLS or its old owners. The grand re-opening of the Sahara included a crane tearing down a 32-foot abstract statue, “Sam by Starck,” which stood in front of the hotel and was created by designer Philippe Starck for SLS owner, Sam Nazarian.
There were many problems that led to SLS being sold less than three years after it opened but the biggest one is the same one that plagues Fontainebleau and has already led many to wonder when it will be sold. The North Strip is many things but it’s not Hollywood, it’s not South Beach and it’s not the best location if you’re trying to cater to anyone that wants to experience a recreated version of that in Las Vegas. The North Strip is basically anything north of the Wynn along Las Vegas Blvd. That’s when you start getting into pockets of undeveloped land, strip malls and empty parking lots. All the normal foot traffic that hotels and casinos in the resort corridor on the South Strip enjoy is gone. You’re not getting many people walking from the Encore to Sahara, even though it’s the same distance as a 1.1-mile walk from Caesars Palace to the Wynn.
Even the $4.3 billion Resorts World, which opened in June 2021, has struggled despite being just a half mile walk from the Encore. While working on this story a friend told me to reach out to Michael Clifford, who joined the Fontainebleau as its senior vice president of casino operations last year after being at Resorts World. As of Dec. 30, just 17 days after the Fontainebleau opened to the public, he was no longer with the property. Numerous emails to the hotel for this story went unanswered.
The Fontainebleau’s location on the Strip may be the worst of any resort in terms of foot traffic and the prospects of it improving anytime soon are not great. It is surrounded by two condominium complexes and two massive lots of land that are years away from development. On one side, there’s the 26-acre site that used to be the Riviera hotel and casino, which closed in 2015 and was imploded in 2016. It is now an empty parking lot owned by the Las Vegas Convention and Visitors Tourism Authority. On the opposite side is the 26-acre site that used to be the Wet ‘n Wild water park, which closed in 2004 and was dismantled in 2005. It has been a vacant dirt lot since then.
For the past decade, former basketball player Jackie Robinson had a pipe dream to build the $5 billion All Net Resort & Arena, a hotel, casino and 23,000-seat basketball arena with a retractable roof (don’t ask why), on the site. After 10 years of pushing around dirt and holding press conferences with unrealistic artist’s renderings, the Clark County Commission recently voted unanimously to deny the project’s request to extend its land use, effectively killing it. No one is sure what will become of the site, which is across the street from another mostly vacant 26-acre lot, the Las Vegas Festival Grounds, which occasionally hosts concerts and conventions.
I had a beautiful view of the dirt lot from my room after I checked into the Fontainebleau for a staycation recently. The hotel is still charging between $300 to $500 per night on average for their lowest tier room on most nights, including weeknights. Those same rooms are going for $1,500 per night during Super Bowl weekend and $700 per night during the International Builders’ Show next month. After checking in, the concierge recommended dining at Papi Steak, a restaurant known for a $1,000 steak that arrives in a briefcase and a $95 potato that comes topped with caviar. Balling on a budget, I opted for the $24 wedge salad and $22 old fashioned. My bill ended up being slightly less than this guy, who went viral on TikTok for being charged $67.13 for a pot of coffee and two large Fiji waters. Parking also isn’t ideal with some guests having to wait over 30 minutes to get out of the poorly configured garage.
It’s hard to get people to come to the North Strip. Trust me, my friends and family still insist I come see them on the South Strip when they come to town. I get it. I’d rather have a view of the Fountains of Bellagio instead of a neon clown myself. But it’s damn near impossible for a new property to attract a crowd when you alienate locals and regulars, price out those looking to stay outside of the resort corridor and think you’re in South Beach instead of an area some have called an economic cemetery.
Las Vegas’ North Strip is still somewhat of a blank canvas in a growing metropolis in the desert but it isn’t going to change anytime soon. Locals have talked about its imminent resurgence for decades only to see projects come and go and enough scrapped artists renderings to fill a museum. The Fontainebleau will likely course correct at some point and figure out where it’s located on the map and who its clientele is. If history is any indication, the bigger question for the star-crossed hotel is who will own it and what will it be called when it finally does.
