Venetian exec discusses expansion, restaurants, nongaming revenue

Las Vegas contributing writer David Yeskel sat down with Rob Goldstein, president of the Venetian Resort Hotel Casino, for a question-and-answer session:

Travel Weekly:In recent years, there has been a movement in Las Vegas to add upscale hotel towers as well as hotel-within-hotel products. Venezia and its concierge level is your answer to this trend. What drove this movement?

Rob Goldstein: It was driven by two variables. The first variable clearly was that this market is underserved in the luxury category, and this hotel particularly produced more room nights here than we could service.

So our first goal was [to tackle the] lack of capacity. We were filling the 3,000 rooms to 100%. Why wouldnt we add capacity? That made sense.

The second thing is, although Las Vegas has a lot of rooms, the luxury segment is small. Four Seasons is in it, Bellagio, us, maybe MGM, the new Wynn resort, but its underserved.

We felt Venezia was the chance to build not a small, boutique hotel, but a smaller hotel with luxury services. And we think it worked.

TW:How will the Palazzo [a 3,000-suite resort being built on the Strip by Las Vegas Sands, the Venetians owner, just north of the Venetian] align in your product mix? Will it be positioned above or at the same level as the Venetian?

Goldstein: The approach to Palazzo is to do the same level as the Venetian in pricing and quality.

However, its clear that the Palazzo opening in 2007 is roughly eight years after the Venetian opened, so by virtue of time, eight years later its going to cost roughly half a billion more than this hotel cost.

The Palazzo will be the newer, prettier model in town. No question about it. But the goal is to have a similar level of quality, similar level of room size and similar furniture, fixtures and equipment.

TW:The Venetians philosophy regarding restaurants is different than the Vegas norm. What was behind the decision to lease space to restaurant concessions rather than to operate your own? And why the exclusion of a buffet? After all, even Bellagio offers a quality, upscale buffet.

Goldstein: We thought this hotel would be better served by having people who do things for a living and do it very well.

Wolfgang Puck, Thomas Keller, Piero Selvaggio, Emeril Lagasse. Pretty sexy names in the restaurant trade. People who do things very well. Great finishers of product.

We feel that rather than employ thousands of food and beverage people, they can do it better, they can design it better, and they can service it better.

And the result has been the highest restaurant sales in the country, here at the Venetian. And almost every restaurant does terrific business.

As far as the buffet issue, we have been criticized about that. People say the buffet is the quintessential Las Vegas experience.

Im confused about a buffet because I dont understand why people wait in line for an hour or two to eat what is usually pretty mediocre food and pay, in these days, pretty high prices relative to what you eat in a restaurant.

Our answer was a large Grand Lux Cafe. Our answer was a large food court. Our answer was multiple casual-dining opportunities and 4,200 seats in total, and not making you wait in line to pay $30 to eat food that is subpar.

And there are people who think we have to have a buffet. We discussed it, but the more we look at it, we think our customer is not a buffet customer.

TW:Would you agree that the Venetian broke the mold for Las Vegas resorts by de-emphasizing gaming revenue while increasing revenue from hotel, food and beverage and meetings/convention business?

Goldstein: There is no question. Say what you want about us, like us or dont like us, you have to respect what Sheldon Adelson [chairman of Las Vegas Sands] saw in terms of the meetings business. The meetings business drives the midweek room occupancy rate, the better restaurants. Theres never been a time here in town that weve had a better quality of restaurants than we have here today. We do the spa thing with Canyon Ranch, and we did a massive mall.

Our income is 30% gaming revenue. I think, like us or hate us, you have to respect the fact that we did what was prophesied back in the early 90s: Create a hotel which is more dependent on nongaming.

Gaming is still important, thrilled to have it, but we make more than $200 million a year profit on nongaming sources.

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For more details on this article, see Venezia at the Venetian adds icing to the cake.

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