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July 26, 2014

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Who needs a showroom? Posh nightclub is resort’s hub

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Brian Brown

Victor Drai

Wynn: Nightclub Industry

Steve Wynn discusses changes in the nightclub industry in Vegas during an interview with Robin Leach.

Wynn: Gaming's Declining Role

Steve Wynn discusses gaming and the demographics his properties cater to during an interview with Robin Leach.

Wynn: Industry Changes

Steve Wynn reflects on the evolution of the hotel-casino business in Las Vegas over the years during an interview with Robin Leach.

Encore has no volcano or pirate show, nor does it have a showroom. Instead, Steve Wynn’s follow-up to Wynn Las Vegas has a nightclub as the centerpiece of the resort, making Encore the first on the Strip to embrace pool and night life culture as not merely a major draw but the top attraction.

The nightclub, XS, resembles a Las Vegas showroom designed by a modern artist with fetishes for gold and classical sculpture on an unlimited budget.

“We are the star of the show,” XS frontman Victor Drai said.

In the new Vegas, clubs are largely replacing showrooms in importance. They generally make more money and appeal to a new generation of customers who want not only to watch a show but participate in the entertainment.

And Drai has emerged as an executive who is every bit as coveted as a skilled casino boss.

Wynn, a fan of Drai’s self-named after-hours nightclub on the Strip, drafted him to rescue the faltering La Bete nightclub at Wynn Las Vegas shortly after the property opened in 2005. Under Drai, the renamed Tryst — now one of the highest-grossing nightclubs in town — began drawing about 10,000 customers per week, up from a few thousand.

Drai, who owns a third of Tryst and XS, added tables and revamped the design. And he put his marketing army to work.

As hotel operators soon learned, nightclubs are built more on buzz than on spectacle.

Drai employs at least 60 people to market XS and his other clubs. Another 200 or so people at Wynn Resorts — from valets and bellhops to dealers and cocktail servers — are expected to promote both clubs to customers in exchange for VIP status at the clubs.

All this word of mouth has paid off, and Tryst, which faces a tree-lined lagoon and waterfall, generates about $40 million in revenue annually, excluding employee tips.

The recession, Drai says, hasn’t cut into the club’s business — 10,000 customers per week is more than the typical showroom draws. And costs are much lower than those of an elaborate production. Moreover, at Tryst, like many nightclubs, as many as 90 percent of the customers aren’t staying at the hotel.

If customers are spending less money in hotels, that trend hasn’t yet reached Tryst or Drai’s.

“This is our best year ever. We’re at the top of our game,” he said.

Despite the big markup on nightclub services — Drai’s profit margins are close to 70 percent — Drai says he offers a reasonably priced experience, relative to a production show, that’s more exciting for young people who want to let loose.

“The nightclub scene is less affected by the economy because it’s cheap entertainment. You can pay $20 to $30 (to get in) and $12 to $13 for a drink, stay out for three to four hours and have a great time. There’s still a lot of kids who want to party.”

The more luxurious places will be less affected by the economy because, with similar prices across clubs, customers generally seek out the better nightspots, he said.

“It’s not like other businesses, where a Bentley will cost you more than a Nissan. If you reduce your prices it’s not going to be significant enough to attract people from someplace else.”

Drai says price was no object in designing the club and that the final cost, because there was no separate budget, is unknown to him.

A dramatic stairway of glittered tile leads to a golden frieze made from casts of nude women draped in thin cloth. The stairway descends again into the club, which features plush seating, at least a dozen stripper poles for impromptu dancing and a rotating chandelier of gold tiles over the dance floor, which opens to a “European” pool offering topless sunbathing.

The pool area is more tropical resort than Las Vegas Strip, with a bar in the middle of the pool and two long bars at each end of a patio filled with tables and lounge chairs.

Next to XS at Encore is Drai’s third venture with Wynn, Botero Steak.

Named for the Colombian painter and sculptor Fernando Botero, the steakhouse is circular, with floor-to-ceiling glass that also opens to the pool. In the middle of the circle is a giant Botero sculpture of a woman — a piece transferred from Wynn Las Vegas’ Wing Lei restaurant. (Wynn and Drai are fans of Botero, who agreed to lend his name to the restaurant, free of charge. Wynn subsequently bought millions of dollars of Botero’s art for his private collection.)

The steakhouse is an understated counterpoint to the glitter next door but is designed to work in concert with the club.

The restaurant will feature its own DJ, though pulsing beats will begin early, around midday, at XS. The restaurant will open at 5:30 p.m. and the kitchen will stay open later than most gourmet restaurants. The hours will vary based on demand from clubbers who get hungry again after dinner.

XS and Botero were designed to create the kind of 24-hour party atmosphere similar to St. Tropez in the French Riviera, a region famous for its picturesque beaches and social scene.

Like many hotel pools, Wynn Las Vegas stumbled upon a hit when it introduced a DJ, blackjack and food service to jazz up its Sunset pool. The party, so to speak, continued at Tryst.

To study this party atmosphere further, Wynn traveled to St. Tropez to see how the French had mastered this scene.

“There’s a restaurant or a swimming pool. There’s a DJ. And there’s everybody laying in the sand and swimming,” Wynn said. “All the yachts anchor in the afternoon off the shore and they have lunch ... It’s a long late lunch, then everybody re-dresses and takes a nap and then hits the club scene at 10 or 11 until four in the morning.”

In recent years, Las Vegas has begun to emulate this scene with pool parties featuring a club-like atmosphere.

Drai, a native of Morocco who has operated businesses in Paris and Los Angeles, has long mixed eating with clubbing.

His self-named restaurant in Los Angeles became known for its music scene when he added a band on Monday nights.

Drai’s Las Vegas outpost was initially a restaurant until he arrived and added an after-hours club that got going around 11 p.m. so as not to disrupt diners.

Wynn marvels that nightclubs are now a $700 million business in Las Vegas.

And yet, it makes sense for Las Vegas, a place that has always tried to keep visitors awake and spending money.

Encore, with a lobby overlooking water and manicured shrubbery rather than a sea of slot machines, has found another way of doing it.

Wynn said Encore has created “a St. Tropez kind of moment.”

“That’s not something I would have understood 10 or 12 years ago.”

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