New Cosmopolitan CEO William McBeath is intimately familiar with four of his neighbors on the Strip, because he used to run them.
McBeath was once the president of Treasure Island, the Mirage, Bellagio and CityCenter. The Cosmopolitan sits between the latter two and is one of their main competitors.
But fighting for the same high-end customers as his former employers isn’t awkward for McBeath. It’s fun, he said.
“It’s just like playing a pickup basketball game now,” he said, only “the stakes are a little higher.”
Though each property he’s worked for is unique in its own way, McBeath said that at the Cosmopolitan, he’s doing a very similar job, just in a different location.
“This feels a lot more like working for Steve Wynn in an entrepreneurial environment, versus the more corporate environment that (MGM Resorts International) had become,” he said. “It’s an independent brand that had to fight for its very existence, and so there’s a very prideful culture that they actually succeeded against all odds.”
McBeath was named the Cosmopolitan’s next CEO about two months ago, just as the resort’s new owner, an affiliate of Blackstone Group, was taking over from Deutsche Bank. The new leadership's job is to turn around the Cosmopolitan, which opened amid a tough financial climate at the end of 2010 and has yet to record an annual profit.
McBeath and Jonathan Gray, Blackstone’s global head of real estate, sat down with VEGAS INC after an event with union leaders and politicians on Wednesday. Here are some insights about them, and their vision for the Cosmopolitan, based on those interviews and remarks from the event.
Changes are coming to the casino floor, hotel rooms
By Strip standards, the Cosmopolitan’s casino floor has never been a strong performer. And although the resort’s gaming revenue has made some strides recently, growing 25 percent in the third quarter last year and nearly 70 percent the quarter before, it’s still not blowing anyone out of the water.
McBeath knows he needs to make improvements in this area: He said he wants to make the casino floor “resonate and have more energy and personality” like the two floors above it. On its second and third levels, the Cosmopolitan has many popular dining, drinking and entertainment options.
“There seems to be a disconnect between the spaces, and the casino floor feels more transient to me,” he said. “There’s not enough cool places to embrace and interact socially.”
McBeath wouldn’t divulge too many details about plans for the casino, but he said the resort is looking at improvements that “aren’t gaming per se, but are more user friendly and more in line with the contemporary, cool, hip brand that we are.”
He also admitted that the Cosmopolitan hadn't achieved its fair market share in either slots or table games, calling the resort’s performance “pretty anemic relative to our peers” in that category. Part of his casino strategy is to make it more attractive to high-end customers.
Aside from adjustments in the casino, Gray is interested in completing some unfinished rooms in the top four floors of the east tower, as well as adding other rooms to the resort.
Blackstone will hold onto the Cosmopolitan for a while, and possibly acquire more property in Las Vegas
Blackstone’s real estate investment philosophy is “buy it, fix it, sell it,” which means exactly what it sounds like. So expect the Cosmopolitan to change hands again in the future.
Don’t expect another sale to happen anytime soon, though. Gray noted that Blackstone has held onto the Hilton Worldwide hotel company for the better part of a decade, and he emphasized that the company sees the Las Vegas market as having “real legs.”
“We think the town went down pretty hard in the downturn … but people want to consume this experience,” Gray said. “We’re a big believer in Las Vegas.”
Las Vegas is so attractive to Blackstone that the group is open to the idea of expanding its presence even more, although Gray said no other acquisitions were imminent.
Cosmopolitan leadership likes the casino workers’ union, and the feeling appears mutual — for now
Gray, McBeath, union representatives, Sen. Dean Heller and Rep. Dina Titus toasted champagne underneath the Cosmopolitan’s iconic chandelier on Wednesday morning. Beforehand, they took turns giving glowing remarks about one another at a press conference.
The message was loud and clear: Gone are the days when Culinary Union Local 226 members got themselves arrested in protest of the Cosmopolitan’s previous leadership. Relations should be better now that Blackstone and McBeath are in charge.
Blackstone owns the Hilton hotels, which has signed contracts with Unite Here, the Culinary’s parent union. Also, McBeath has signed contracts before with Unite Here president D. Taylor, whom he called an “incredible partner” at Wednesday’s press conference.
Taylor seems to return the warm feelings, too.
“Getting Bill McBeath in this job at this time was quite a coup,” Taylor said. “I’ve known Bill for over 20 years, and he has run some of the most successful properties. He is very focused, he is a true professional … I can honestly say the best days of the Cosmopolitan of Las Vegas will be in the future with Bill running the helm.”
However, the union and the Cosmopolitan still need to pass the real test: signing a contract.