As you probably already know by now, the shuttered Palms Resort is having its reopening celebration on April 27.
Opening with all new owners; the San Manuel Gaming and Hospitality Authority (The San Manuel Band of Mission Indians). The First Native American Tribe to Own and Operate a Casino Resort in Las Vegas
It’s been an interesting journey for the legendary property and interesting to watch it through the years. As a long-time observer of Vegas business, I can say that the new owners are doing it right.
I mean the San Manuel Gaming and Hospitality Authority is writing the book for other companies to follow on how to properly open or rebrand a casino resort in Las Vegas. If others want to succeed in entering this market, they will need to take notes here.
On November 15, 2001, with great fanfare and only a single hotel tower, the Palms opened their doors. Immediately, it became a hit with the tourists, the locals as well as the Hollywood jet-set that previously called the Hard Rock their Las Vegas home.
The Maloof family were the majority owners of the property. They are a Las Vegas-based entrepreneurial family with their hands in beer distribution, major league sports, music, and finance. As a family of business owners, they had almost every major market covered.
Their Vegas hotel’s main spokesperson was son George Maloof (Think Danny Devito, only taller). With their family’s deep connections to the Los Angeles sports, music, and celebrity scene, the long list of celebrities and big named figures they could tap into and get to make an appearance was almost endless. That was one of the things that made this joint rock!!
They had the best clubs, the best restaurants and on weekends, some of the best people-watching in town. Being a bit off the Strip (pre-Uber) they needed to cater to the locals as well. The ones who are there for the long haul.
So they had a new Brenden movie theater that offered Imax movies. Several movie premiers and red carpet events related to movies happened there. They offered a family-friendly food court as well as a relaxing and friendly sportsbook.
In 2006, they opened a more luxurious and off-the-wall second tower called “The fantasy Tower”. And it was a pure fantasy come true for those with the gold or black American Express cards!
The top-floor nightclub had a roof that opened up to the stars. It had an actual Playboy Club complete with a private entrance from the two-story, 9,000 square foot Hugh Hefner Villa/Suite.
Other suites in the tower offered a professional recording studio, an NBA regulation size half basketball court. One even had a bowling alley in it. The hit show “Real World” filmed a season in their own suite in the tower.
What Went Wrong?
This place had it all and it was rocking 24/7. In 2008 they broke ground for the third tower. This one was a new condominium tower called Palms Place. It was to be the Las Vegas hideaway home for the famous and the wanna-be famous. The likes of Pamela Anderson and other celebrities and sports stars had supposedly agreed to buy luxury units in the tower.
Unfortunately, 2008 was just not a good year for investments like this one. The market collapsed and it all started to go downhill. As well, there may have been some mismanagement in play. Other Maloof family businesses were hurting financially and this was their cash cow.
By 2011, they were over-leveraged and began missing debt payments. The Maloofs were forced to sell most of their ownership to Texas Pacific Group.
The new majority owners quickly seized control and started to make changes. To say they had no real clues as to how a Las Vegas resort operates, especially in a resort that markets to both the locals and the new young rich, was an understatement.
I am led to believe they viewed the Palms as a normal hotel in a normal town and started to make bad changes to how they operated. These changes were not customer friendly and guests went elsewhere for their entertainment pleasures.
In October of 2016, a minority partner, Red Rock Resorts, better known locally as Stations Casinos, a Las Vegas-based “locals” casino operator, bought the Palms for $300 million and then invested another $600 million in renovations.
This would be the family-managed company’s third attempt to break into the tourist market and the second time they got their pocketbook slapped for trying to work outside their comfort zone. (Green Valley Ranch is profitable, Red Rock Resort has always been financially stumbling).
This investment and their operation of the resort were a disaster of absolute epic portions. Cost overruns, old guest favorite venues closed, and new, poorly managed venues opened with no real theme or purpose to them. Horrible design changes inside and out (can we say chopped shark tank?). To sum it all up from reviews online: “Blah”.
Then came the pandemic and the 2020 shutdown. For Stations Casino, this was a bad thing wrapped in a good thing. With everyone shutting down, it slowed the financial bleeding and stopped the bad publicity.
In May of 2021, after an investment of almost $1 billion, Station Casinos had agreed to sell the Palms Casino Resort to the San Manuel Band of Mission Indians for $650 million in cash! Ouch!
Who Bought The Palms?
The San Manuel Gaming and Hospitality Authority is an affiliate of the San Manuel Band of Mission Indians. This makes them the First Native American Tribe to Own and Operate a Casino Resort in Las Vegas.
If you ever traveled Interstate 15 between Las Vegas and southern California, you saw their billboards promoting their friendly casino and resort.
The Tribe owns and operates what is now called Yaamava’ Resort & Casino at San Manuel. Previously known simply as the San Manuel Casino. Based in Highland, California. Ironically, like Stations Casino, they were started 35 years ago as just a humble bingo hall.
They Wrote The Book
Anyone who has followed this blog for any length of time knows my rants about how companies come here and THINK they know how to operate a business in Las Vegas. The “We are famous and our brand will do the selling for us” business theory. That misguided theory of business management always fails in Las Vegas. Las Vegas is a universe all its own.
Editor: The gang in Florida who manage the Hard Rock International brand, may want to take notes here. A lot of notes!! They are already alienating a lot of their potential guests and they haven’t even taken the keys to the Mirage yet!
The tribe has succeeded in California where competing for a share of the locals’ market is fierce. Nobody lives further than 50 miles from an Indian gaming location. They do it well because they understand niche marketing. I know, you would think this would be business 101, but for some, it’s not.
They did not come into Las Vegas, beating their chests and telling us why they are the best to work for or the best to play at. They have yet to push their other establishments in our faces and say”See, we know what we are doing.”
One of the first signs they put up on the LED board of the tower read “New to the neighborhood, looking to make friends”. How can you hate on a company that does that??
When looking at the Palms’ new owners and the future owners of the Mirage, I am seeing what we went thru with the Vegas Golden Knights and the Vegas Raiders.
The ink wasn’t even dry on the first Golden Knights player contract and they were already out making friends with all the people in Las Vegas and beyond. They as in players and management. All of them out to say “hello”. They took the community approach and made a lot of friends long before the first puck ever dropped.
The Las Vegas Raiders took the normal NFL stance. “We are GOD, You will come to Us!”. That attitude rubbed a lot of people the wrong way. Not to mention the $1000 ticket prices. And let’s not even get into the parking debacle!
If It Works
The tribe looked at what worked and what went wrong while also looking at what is working on the Strip. They talked to a lot of people, including those who lost their jobs when the resort closed. What a concept!
In today’s Las Vegas business market, it is very difficult for any business to get people who want to work. Yet the Palms seems to be ready to open quickly with a full staff. Not only that, but they have made the announcement that on opening day, almost 50% of the staff will be returning employees!
What about management? Local or from out of state? Answer. Local, very local. Longtime MGM Resorts International executive Cynthia Kiser Murphey was chosen as the new general manager. The thing I like about her and why I think this was a good choice is that she comes from MGM. Normally that’s not a good thing. Here it is.
She served on the floor, in the hot seat. Not off the Strip in one of the Ivory Towers or in the cesspool of the upper management over in the Green Castle.
Her casino background is mostly from being CEO of New York-New York, where they are known to be customer-focused, family-friendly, and most importantly, profitable.
It Will Work
I have no doubt that The San Manuel Gaming and Hospitality Authority knew exactly what a jewel they were buying. A once thriving resort that hit a few bumps and had some bad management. They surveyed the landscape. They saw what sells and what isn’t. What is needed and what is missing.
They took their time in making strategic decisions, keeping much of it based in Las Vegas. They worked hard to make friends along the way. Best of all, they kept their ego in check.
In their offerings, they took in the needs of the tourist as well as the big spenders and the slot club junkies.
This is exemplified by the small touches that mean the most to the new wave of tourists coming to Las Vegas. The basic rooms have refrigerators and mini-stoves. Multi-screen movie theater. The A.Y.C.E. buffet always had some of the best food in town at a reasonable price. And from the looks of it, still will be “Vegas affordable” and delicious.
I believe, after seeing everything they have done to become part of the Las Vegas community and working to be a Las Vegas success story as well a thriving resort, they have done it right. Better than previous attempts, that’s for sure.
This is going to be a great opening! I am looking forward to seeing everything open up and hearing all the great reviews I am sure will follow.