Since Sam Nazarian launched SBE in 2002, the Los Angeles-based company has become equally known for its nightclubs (Hyde), its hotels (SLS, Redbury) and, more recently, its burgeoning group of food and beverage concepts (Katsuya, Cleo). The company acquired Morgans Hotel Group late last year for $805 million, and last month it celebrated the opening of the Bahamas' SLS Baha Mar. Nazarian spoke with hotels editor Danny King.Q: Baha Mar was marked by numerous delays before opening this year. How has the SLS Baha Mar been received?
A: The initial responses have been very encouraging. The delays were unfortunate, but people will see the magnitude and experiences and the continued reinvention by the ownership to create destinations within the campus. Our biggest competition is the Atlantis, and that hasn't been renovated in quite some time. When people walk into the largest casino in the Caribbean with all of the natural light, it will quickly become the No. 1 destination in the Caribbean.
Q: Many companies are co-opting the term "lifestyle," which is where SBE has long been focused. What does the term mean to you, and how do you differentiate yourself?
A: It doesn't mean much -- it's like the word "boutique" before it. But we differentiate ourselves by looking at the full, 360-degree product offering -- not just design and architecture, but controlling all of our experiences. We're managing a curated experience that's more than a great design and a great name. And now that we're getting into residential, we're really capturing the consumer in a manner in which they want to be spoken to.
Q: How does such an extensive food and beverage presence impact how you run your hotels?
A: Ian Schrager was the forefather of bringing great restaurants and nightlife into the hotel. We've subsequently tried to integrate both from a development perspective and maximize the footprint of the traditional lobby, restaurant and bar. The only way we can do that in a way that's sustainable is by controlling the brand. With our food and beverage portfolio of brands, we can look at a building with a master plan differently and control it because we don't have third parties. It's a big part of what differentiates us from the big boys.
Q: How have the Morgans hotels performed since you acquired the company?
A: There was a lot of distraction in the market and a lot of turnover at the top for many years, and it took away from the quality and legacy of a Mondrian, Delano or a Clift. We gave it a little bit of consistency, integrated our overall platform and reinvested in the systems. We're providing a foundation Morgans didn't have for a while. We're on the verge of redefining the Delano brand and growing it as a resort product. So there's a sense of momentum.
Q: New York's Mondrian Park Avenue, which opened in October, was originally slated to be the city's first SLS. Why wasn't it opened that way?
A: The Mondrian fit better in that NoMad area, with its design and finishes. Mondrian also already had a connection in SoHo [via the former Mondrian SoHo, which is now the NoMo SoHo]. Also, SLS has really evolved into a much more luxury product, and we wanted to save SLS for a location that could take advantage of having a residential component.
Q: The SLS Las Vegas [which SBE opened in 2014 before selling its stake to majority owner Stockbridge the following year] hasn't performed as well as expected. Why?
A: We don't have a lot of visibility into the operations, but like any other megaresort on the Strip -- like the Cosmopolitan or the Aria -- it takes some time to stabilize and become profitable, and I don't see the SLS being any different. Some of the delays of the properties weren't planned, with Resorts World Las Vegas developer Genting and the Fontaine-bleau. Hopefully, Resorts World will go online, and the area will have a little more density.