Can the high profile Virgin brand and its rock star founder Sir Richard Branson save the off-strip Hard Rock Hotel in Las Vegas? We shall soon see if removing the iconic Hard Rock guitar and replacing it with Virgin’s signature red “V” will truly make a difference as on Friday a group of investors acquired the property for an undisclosed price with plans to bring in Virgin Hotels as its savior brand partner.
Virgin Hotels will take over management of the Hard Rock as soon as the deal closes and investors will start the rebranding process, which is expected to cost “hundreds of millions” and is set to be complete by late fall 2019.
The new ownership partnership, which acquired the hotel from a Brookfield-managed private real estate fund, includes a group led by Juniper Capital Partners and Fengate Real Asset Investments along with their partners Dream, Cowie Capital Partners, and other private investors.
“The property has not done well and Virgin will have an uphill battle,” Alan Woinski, editor of Gaming Industry Daily Report and president of Gaming USA Corp., told HOTELS on Monday. “With Station Casinos sinking nearly US$500,000 into the Palms, Virgin is not going to have a very easy time with the competition.”
Woinski said that the new owners are leasing the casino to Warner Gaming, adding that in the past there has not been a lot of success with this strategy. “Off-strip properties remain casino oriented. Only the MGM properties on the Las Vegas Strip have had success with the non-gaming portion becoming dominant,” he said.
However, Virgin Hotels CEO Raul Leal told HOTELS Virgin is known for creating fun experiences specific to its customer base of more than 60 million consumers and these are not necessarily located in primary locations or markets. “We love the location of this property for our brand and believe that our consumers will, as well,” he said. “We looked at a variety of locations around Las Vegas over the last six or seven years and we always wanted to make sure that we had a destination location, and someplace that we could really carve out and make special the Virgin way.”
Leal also said that the destination will manifest its presence in a variety of ways, which he believes will attract guests looking to be on the Strip, stay off the Strip, as well as be a place for local customers to play and have a great time, which is a big part of their strategy.
“The renovation will transform the existing asset into a completely different and vibrant experience than what currently exists there now – the new Virgin Hotel will feature prominent food/beverage and entertainment partners as part of the new offering,” Leal added. “The Las Vegas market is growing stronger and stronger, and we see that through our development as well as the continued reinvention of properties such as The Palms. The revitalization of these two iconic assets in particular only help strengthen the overall market – we’re excited to bring the Virgin experience to Las Vegas.”
Plans call for the reimagining of guest rooms, restaurants and public spaces, according to new Property CEO Richard “Boz” Bosworth.
The hotel will feature 1,504 rooms, a 60,000 square foot, fully renovated casino, multiple pools over five acres, F&B, nightlife, Virgin’s flagship Commons Club, as well as meeting and convention spaces.