Friday, September 18, 2009 • Source: Las Vegas Sun
People who have seen the transformation of downtown Las Vegas’ Gold Spike can’t wait to see what Stephen Siegel, president and CEO of the Siegel Group, has in store for his newest property, the St. Tropez.
In less than a month Siegel will open the doors of the 150-suite property that he acquired last month for $10.5 million. St. Tropez sits across the street from the Hard Rock.
For Siegel, the challenge won’t be $2 million in renovations that will transform the St. Tropez into a boutique resort, but will be transforming St. Tropez’s image since he plans to keep the name.
But he has some experience doing that with the Gold Spike.
“If you look at some of the online customer reviews for the St. Tropez, they’re absolutely awful,” Siegel said during a tour of the building and its four acres.
“People who came here had an absolutely awful experience,” he said. “To change that perception, I think you have to bring them here for free to kind of build their confidence. That’s just the cost of marketing.
“Once they see what we’ve done, it’ll change their perception. It’s the same thing we did with the Gold Spike. Whether it was bad or good, people know the name ‘Gold Spike,’ but I think a lot of people have changed their perception of that place.”
The Gold Spike, a 112-room hotel, is a work in progress. Siegel purchased the 55-room Travel Inn next door and he’s in the process of turning them into a single property, using the Travel Inn’s address. That would make it the only downtown property with a Las Vegas Boulevard address.
The Travel Inn project is expected to be completed within three months. Currently workers are digging a pool for the joint properties.
Siegel plans to install a player-tracking ticket-in-ticket-out slot system at the Gold Spike.
Although he holds a nonrestricted gaming license for the Gold Spike, Siegel has no plans to convert the St. Tropez into a casino. He expects to get a restricted license, which would enable him to operate 15 or fewer slot machines, for the property so that he could have tabletop video poker at the hotel bar. He has a similar strategy and license at the Mt. Charleston Hotel.
Plans are starting to come together for the St. Tropez. Renovation plans are still tentative, but Siegel hopes to develop a restaurant, bar, small outdoor event center and a nightclub with concierge and limousine service and an outdoor yoga studio.
The pool is being renovated and an overhaul of the landscaping is under way. Every suite is being renovated and will have “cool, fun colors,” Siegel said. Most of the rooms have large Jacuzzi tubs and private balconies or patios overlooking the courtyard and pool. The extreme makeover won’t be completed for eight months, but Siegel plans to have guests paying discounted rates, gradually increasing them over the course of the renovation.
“We want the property to just scream out at people as they’re driving by,” he said.
Siegel’s team hasn’t identified a standard room rate yet because it’s still crunching budget numbers and projected revenue.
The St. Tropez, which had become run down and closed about a month ago, has 20 employees, but by the time the doors reopen, it’s expected to have 80.
Siegel isn’t worried about the competition across the street. In fact, he’s excited about having the Hard Rock as a neighbor because he expects he’ll get some overflow guests from it on busy weekends.
“We called the Hard Rock up and went over and introduced ourselves and got a tour of their new facilities,” Siegel said. “The next day, we invited them over and showed them our plans here. They’re great guys. To own four acres on Harmon (Avenue) with the neighbors I have, I think we’re in a great position and it’s going to be a great relationship.”
In addition to its hotels and casinos, the Siegel Group, which specializes in repositioning troubled facilities, operates 24 properties, including 16 Siegel Suites “flexible stay” units that are marketed as short-term or long-term rentals that offer free breakfasts to residents.
Siegel says he has more apartment acquisitions in the works and will soon debut a magazine for residents that cross-markets his local holdings.
Although many would think Siegel is rolling during the recession, he said it’s still a challenge because he has had to reduce rental rates to attract customers.
“Our occupancy rates are up, but our rates are not,” Siegel said. “There’s much more competition from rental houses and rental condos.”
Siegel aggressively markets value and superior customer service to compete.
“It’s easy to give someone value, but not give them good service,” said Siegel, who handles customer complaints personally.
“To me, it’s never been easy. You have to work harder and smarter today just to stay ahead,” he said.
“The way I see it, even if a person spends just 99 cents with you, you want to treat them like they’re spending $99.”