A year ago, the Blackstone Group decided to take control of the Cosmopolitan, a resort located on the Strip of Las Vegas. Bill McBeath held the CEO position and walked into the casino knowing that the property would not be a quick fix to success. After learning from gaming gurus, Michael Gaughan and Steve Wynn, McBeath found that it is important to understand the business as well as customers.
McBeath took to asking questions of the customers of the property as well as the employees to get a better understanding of what needed to take place at the venue. The under-performing areas were reconfigured for better performance for the casino as well as changing the amenities that were not drawing customers in the nongaming sector.
However, McBeath and Blackstone were not interested in short term results, but long term. $1.73 billion was paid by Blackstone Real Estate Partners to acquire the Cosmopolitan property from Deutsche Bank, which took control of the venue via foreclosure.
The hotel-casino has almost 3,000 guest rooms and is located on an 8.7 acre piece of land. The property never reported a profit after opening in December of 2010. The Deutsche Bank spend close to $4 billion to finish and open the resort, but was planning on selling the venue from the very beginning.
Blackstone decided to bring McBeath in due to his 20 years in the gaming industry including being the Mirage Treasure Island President, Bellagio and CityCenter. According to McBeath, a strategic plan needed to be created to determine the successes and failures of the business. After asking the right questions, a business plan of 165 pages was created to take the property from ‘yesterday to 2020’.
After the initial changes to the property, the Cosmopolitan was able to earn their very first every quarterly profit of $15.3 million. This was from a 3 month time frame ending on the 30th of June. During the quarter from September, the property was able to earn a net of $4.7 million.
The venue now is approaching their 5 year anniversary. To celebrate, the property will be receiving a makeover. Close to $35 million will be spent on changes, including a new slot area for high limit gaming, a nightlife spot with lounge, restaurants and upgrades to the guest rooms. In 2016, the venue plans on moving the sports book to the ground level from the second floor, to include a Starbucks for refreshments.