HOTELS: Snake Eyes in Las Vegas

Only a few months ago, the sky seemed to be the limit in Las Vegas. Last spring, in one week alone, two palatial hotels opened their doors to the tourists who swarmed into Las Vegas to gamble. Along the three miles of heatseared desert called The Strip, where frontage ran as high as $1,500 a foot, five hotels in all were built this year. Cried a Las Vegas booster: “No reason why there shouldn’t be 60 big hotels in the next five years.”

Last week there was a good reason: a lot of the hotelmen-gamblers were rolling snake eyes. Less than five months after it opened, the 250 room, $5 million Royal Nevada was losing so much money that it was being taken over by the Desert Inn, a comparative oldtimer. The veteran management of the Flamingo hotel was moving in to rescue the shaky $8,000,000 Riviera. The $3,000,000 Moulin Rouge, built to lure in Negroes, had to be reorganized. Last week the well-established Sands took over the three-month-old, $4,000,000 Dunes on a ten-year lease at $750,000 annually, launched the Grand Reopening in a blaze of hoopla starring Frank Sinatra perched upon a camel.

Outdistanced Boom. Part of the trouble was due to the fact that the number of new suckers had not kept pace with the new gambling facilities. But more important was the lack of experience of the new hotelmen themselves. A well-established casino-hotel that cost $5,000,000 often takes in as much from gambling in just one year. But the hotel must have a fat bank roll, be prepared to take months of heavy losses before its luck turns and it gets the free-spending, heavy-gambling regular clients that are the shock absorbers in the older places. In one new hotel there were so many bosses that some were unknown to each other. The new hotels were also overstaffed, and could not get the all-important entertainers—Danny Thomas, Jimmy Durante, Joe E. Lewis, Martin & Lewis, Tony Martin, et al.—that brought in the suckers; the stars were already sewed up in three-year deals by the established hotels.

Last week, as the old hands moved in for Las Vegas’ Operation Rescue, it was still a question whether all the new hotels could be saved. More tourists than ever were coming to Las Vegas—10% more than last year by bus, 30% by plane—but they were spending less. The time when the $30,000-a-week headline act made economic sense as a loss leader because it lured customers to gamble was changing. More and more people were going to the hotels to watch the high-priced floor show, eat the $2 steak dinner, enjoy the elegant $8-a-day hotel room, and maybe drop a few token coins in the slot machines (5% profit for the house). Last June most of the hotels were forced to alter a longstanding policy, and charge a $2 minimum for the midnight supper shows that guests could once see by sitting at a table and ordering a soft drink. Said Riviera Board Chairman Morrie Mason: “We don’t think that we, or any other hotel, should give away a $30,000 show for a Coke and two straws.”

More to Come. Still, there was no lack of gambling spirit in Las Vegas. Last week, as some hotel operators were moving out, sadder and lighter in pocket, other hotel-men were preparing to come in. Around Las Vegas bulldozers roared, and workmen toiled in the hot sun. Abuilding were three new hotels, the Martinique, Lady Luck and Fremont. Total cost: $19,000,000.