Is the Vegas Nightclub bubble about to burst?

[Brandon DJ]

Every year I make the trip to Vegas. Like most others that hit Vegas, I'm not rich. I like to go there to live the life and be treated well and to party like a rockstar. Every year the price to do so goes up.

A couple years ago you could have $250 bottles at Pure. This year the prices are $350 at some clubs with clubs like XS charging $450 minimum. Fewer clubs now offer easy access to the guest list. Check out napkinnights there are barely any you can get on these days.

Meanwhile, the Vegas economy is struggling, and please don't dispute that it's struggling there are plenty of numbers to support the claim. Room occupancy is off, room rates are down 14.3 percent. Gaming revenue is off 25%. Casino projects are on hold. Some casinos companies are facing foreclosure. Yet the nightclubs are gutting people for $18 dollar drinks, and charging $450 for a $30 bottle of liquer and a place to sit. Two buddies would have to pay $60 total to get into Tryst this Thursday while the same two guys can pay $58 to share a room at the Monte Carlo that same night. To me that shows the scales are tipped pretty far to one side.

I predict by this time next year many of these clubs will either make adjustments or be gone.

The clubs have two things going for them. 1) In tuff times it is still shown that people spend on entertainment. 2) Sex sells, so if they keep the ladies coming out the guys will follow.

But, in times where the unemployment rate is shooting up as fast as new Las Vegas casino properties used to and Las Vegas homes are being foreclosed on faster than a girl at Spierment Rhino gets naked, when will the people stop showing up in drones? When will the clubs feel the impact? Or, are they feeling it already?

The writing is already on the wall. Last year every night I was in town multiple clubs had celebrity appearances and parties lined up. Look at next week, there isn't a single celebrity party advertised at any club. Are the clubs cutting that clebrity money first? Off the strip, Cherry is offering stimulas Fridays with $100 bottle service. When will the strip have to adjust?

People are placing more and more value on the money they earn. They are not parting with it so easily these days. I think the clubs will be seeing less parties of 5 people willing to drop $900 plus tax and tip for one night at the club. I believe the inflated prices of the Vegas nightclub scene are about to burst.

What do you think?

[dnix]

Most companies in the US are making adjustments. Im sure Vegas will have to too. I was there in Nov. and Dec. and all the bartenders, and dealers were complaining about how slow it was. One of bartenders told me "it hasnt been this slow since 9/11". That being said, all of the clubs I went to were packed by 11pm.

[nyc2vegas]

our busy is different than their busy. It might appear very busy to us who arent their all the time but the help noitces it with their pay. Anyway, Im sure adjustments will be made and I think they will have to drop the price of bottle service and then competition will start and it will drive the price downward....its purely a supply and demand issue 9like everything else in the world) which will cause the cycle to restart. When I started going to vegas 10 years ago there were one or 2 "nightclubs" it was RA and rumjungle, there wasnt table service and then it took off(...with pure I think) and Im sure that it will go back to where the clubs cant lease 50K square feet and make it, theyll have to lease 25K and offer deals to compete. but we have to understand that the people running these places are some of the brightest minds outside of wall street, they certainly know what they are doing to draw crowds.....only time will tell!! but im sure they will take their hit as well.

[Jackrockson]

yea i think it might

need something a little more attracting

[Hoody]

Economic booms and busts! It'll come back around and sort itself out, much like everything in a recession (well, not everything, but i'm sure clubbing in Vegas is in a strong enough position).

[Andrew@LasVegasNightclubs]

Interesting post! Honestly it seems to be going back and forth. You'll go to a club on one night and it will seem dead, but two days later I'll hear the finances they did and it's like "what bad economy!?" haha.

Past that, it isn't likely that the clubs will lower their (posted) prices, both for business reasons and probably quite a bit of pride. The adjustments are slowing coming in the form of lower bottle minimums, a greater ability to negotiate them (buy 1 get 1s, buy 2 get 1, etc), the clubs imposing promotional requirements on all staff members, and a bit more relaxed guest list policies on slower nights.

There are a couple of clubs on the Strip (not mentioning any names, of course) that I could see closing down or reformatting, but by and large most of them are still doing pretty good and won't be going anywhere in the foreseeable future. All in all, they still make ridiculous amounts of money given their overhead....making "slow" for them still enviable to a lot of clubs in other cities.

PS: Cherry was the first to do a play on the economy / bailout with their stimulus fridays, and then everyone jumped on the friggin bandwagon. Holy Moly. It's almost as bad as the "what happens in vegas happens at ______ " of 2007 / 2008! Ahhhh! haha.

[ashroid]

I was last in Las Vegas for Easter weekend and before that in early February and though I've been told it's not as busy, there was still quite a bit of traffic going into the nightclubs. The gaming tables definitely seemed to take a hit (based on my gambler friends' opinion), but by and large, the nightclubs were still quite packed.

I agree with Jack Colton that some places have been much more receptive to negotiating bottle minimums and I think that's great.

[-dc-]

In dazed and confused there's this line I love "You know what's great about girls in high school? We keep gettin' older, but they stay the same age."

Now, you might think that has nothing to do with your post, but think about how a night club in Vegas operates. They depend on young unexperienced girls and guys that want to have sex with those girls to keep business strong. It's such a recyclable market, where the new are willing to pay and the old are willing to move on- it doesn't take much to keep the club moving forward- a hot young celeb, a line of hot girls when there's plenty of room inside.

It's all perception...knowing how they work makes me feel old sometimes, but its also refreshing...

Clubs will change and reface and revamp, but the mission will always be the same- sell sex.