The Cosmopolitan, a hotel and casino in Las Vegas, NV, has been a bust until recently. Despite the fact that the Cosmopolitan Casino is located on 8.7 acres of prime real estate on the Las Vegas Strip, the establishment was quickly forclosed on after its opening in 2010. The bank that forclosed on the property was the Deutsche Bank, and they immediately inteded to sell. They made alterations and upgrades to the property to entice buyers.
So who ended up purchasing what seemed to be an unlucky property? A corporation called the Blackstone Group. The man that the Blackstone Group decided was the right man for the project was Bill McBeath. McBeath knew that it would take more than the makeover the bank gave the property for this hotel and casino to become successful.
McBeath had a tremendous amount of expernience in the industry. He has been the president of the Bellagio, City Center and Treasure Island. McBeath did not, however, simply rely on his own expertise when it came to creating a recovery plan for the Cosmopolitan. He consulted with leaders in the Las Vegas gambling and gaming real estate experts, including Steve Wynn and Michael Gaughan, to gain a better understanding of what it would take to get the Cosmopolitan out of the deep financial hole it was in. Not only did McBeath consult with leaders in the industry, but he also spoke with members of the Cosmopolitan staff to see what kinds of hands on things needed to be changed and if there were any changes to be made that might improve the day to day operations. He also asked for the input of Cosmopolitan customers to see what kinds of additions would be both profitable and beneficial to customers. Additions to the casino’s lounge and nightlife along with the addition of a Starbucks were among the suggestions of changes to be made.
After a thorough investigation of the Cosmopolitan’s successes and failures was conducted by McBeath, a plan was reached. The plan is 165 pages long and was apparently designed to be the acting 5 year plan for the establishment. McBeath felt confident that the right questions were asked of the right people and believed that the plan was well informed. It appears that he was correct, as was the Blackstone Group for bringing him on board for the project. After a devastating start, the Cosmopolitan for the first time in its history turned a profit. In the quarted that concluded at the end of June 2015, the Cosmoplitan turned a profit of $15.3 million. Not only that, but the fiscal quarter that began in September reported a profit of $4.7 million.
While the profits of the hotel and casino are only the initial signs of financial success, they are definitely good ones. The Cosmopolitan celebrated its 5 year anniversary in December 2015. While pleased with the success, McBeath understands that a full turn around will take quite a bit of time and a dedicated effort to the property. Luckily, Bill McBeath is not in the hotel and casino business for the short term profits. $35 million worth of changes are still scheduled to be made to ensure the Cosmopolitan’s success in the future. Where others saw a sink hole that was unsalvagable, McBeath saw opportunity.