Q+A: Robert Frey

By Liz Benston

Thursday, Aug. 2, 2007 | 8:05 a.m.

Robert Frey, who grew up in Las Vegas and managed coffee carts at Caesars Palace, didn't set out to be a nightclub king.

But then he watched the 2000 movie "Coyote Ugly" and saw what could happen when you combine appealing women, impromptu dancing and vodka shots.

A year later, Frey and his business partner, Steve Davidovici, opened at New York-New York a Las Vegas version of the rowdy New York City watering hole that inspired the film.

Their timing couldn't have been better. At a time when the Las Vegas tourism boom was riding high on a wave of edgy entertainment, they opened still more clubs in other hotels that needed to spice up their offerings to stay relevant in the evolving Strip nightscape.

But it was Pure, a $14 million, 35,000-square-foot marvel of white leather and velvet curtains at Caesars Palace, that would put the pair on the map and help fuel a wave of superclubs rivaling the nation's hot spots. The most expensive club at the time, Pure is the nation's No. 1 nightclub by revenue, maintaining its elite image with prominent VIP areas and a steady stream of celebrities. (This past New Year's Eve, party host Britney Spears slumped over from exhaustion at Pure. Tabloids erupted again when Lindsay Lohan canceled her 21st birthday celebration at Pure to remain in rehab after a DUI arrest.)

Fueled by $15 drinks and bottle service costing hundreds to thousands of dollars per sitting, the club's biggest weekends can generate close to a million dollars, deposited by customers who are pouring through the casino as well. Pure's success surprised Caesars bosses but didn't shock Frey, who built the Strip-front attraction with an outdoor balcony to tease thousands of tourists.

Pure Management Group operates nine nightlife venues, including restaurants and bars, and will open three venues at Luxor this year. The rapidly growing company is helping to cement Las Vegas' reputation as the nation's top nightspot, taking advantage of the tourism boom to quickly overtake other cities in the number and scope of its clubs.

Q: How do you justify building nightclubs that are 10 times more expensive than what you'd spend in other cities?

Las Vegas is the most expensive city in the country to build in. The problem is the escalating cost of construction and labor. You can't build anything in Vegas now for under $1,000 per square foot, sometimes $2,000 per square foot - whether it's a poker room, showroom, anything. I don't think you can build a club for less than $20 million. If you built Pure today it might cost $25 million. In other cities you might spend $1 million to $3 million.

Still, Las Vegas has some of the most profitable clubs.

The best thing about Las Vegas is that everyone goes out, regardless of whether you're here for business, for fun, for gambling, for a fight. They leave their room. You can go to another city to see family and just hang out at their house. If you come to see a relative in Las Vegas you're still doing something else.

Does $25 million buy a better club than what $2 million would buy you in New York?

Money doesn't make it better. It's the totality of the experience. In New York, London, Paris, there are great clubs. But no one can compete with the variety and energy we have here. And you don't have the space in other cities that you have here.

Nightclubs weren't on casinos' radar screens a few years ago. What happened?

The first clubs were built for the people who lived here. It was more geared toward the local workers and some tourists. Club Rio, the first major club in a hotel, paved the way for future clubs. Three years ago they were just starting to become a necessary element. Las Vegas has evolved as a destination.

Do casinos want to be known for their clubs or are they just another profit center?

You have a different operating philosophy at each casino. Some casinos just want to have their high rollers comfortable and happy and others want to feed their bottom line and earnings per share. But to do that, properties have to be fun. They don't want someone who's staying at their hotel to go to another hotel because it has a certain amenity. It might be that people are leaving their hotel to go to another property's steak house. That's why you see the proliferation of shows and retail, too. They're all covering their bases by offering everything.

Why did casinos hire others to operate their nightclubs?

They didn't know the business. It's not as easy as opening your doors and playing music. There's a lot of moving parts in our business. It takes a year and a half to two years of planning. It takes a lot of operating and marketing experience. A hotel can't do it. But in fairness to them we can't do what they're doing. They're concentrating on gaming.

There's a perception that nightclubs are a place where singles can connect with strangers. Is this true in Las Vegas?

We're seeing a lot more people coming to Vegas for special occasions like anniversaries and birthdays. We get more bachelorette parties now than bachelor parties. A group can have fun at a nightclub and interact more than it can sitting around a gaming table.

Do you design a club for a particular age group?

It really isn't about age. Even people in their 40s and 50s who don't go out at home want to come to Vegas to have a good time and will go to a club. They may only go once a year for two or three hours, but that's what people want.

So what's the secret to a successful nightclub?

There's no rhyme or reason to it. Each club is different and takes on the culture of the hotel it's in.