Hard Rock Cafe will expand into the casino business

June 06, 1991|By Knight-Ridder

Will rock 'n' rollers become high rollers?

Peter Morton is betting $65 million that fans of the Hard Rock Cafe chain he started in London 20 years ago will stay and play in the Hard Rock Hotel & Casino he plans to begin building in Las Vegas this year.

But, for players who can't get no "Satisfaction" even though they try -- and they try, and they try -- to win, the resort could become a "Heartbreak Hotel."

The project, with a 130-foot Fender Guitar statue out front, will break ground late this year and open in late 1992 or early 1993, Morton announced yesterday. The hotel and casino will be managed by Harrah's, the Promus Cos. division that operates successful casinos in Atlantic City, N.J., and Nevada.

The casino will be shaped like a CD, its walls covered with rock-star memorabilia. It will be 28,000 square feet, about half the size of most Atlantic City casinos. The hotel will have 302 rooms, 24 suites and a 1.5-acre swimming pool with a sandy beach. The lobby will be builtaround a raised circular stage with a bar -- spinning at far less than 45 rpm -- decorated with a classic Cadillac with fins and a rock music light show, said Valerie Van Galder, a Hard Rock vice president.

The project signals several significant trends in the casino industry, especially the industry's attempts to get Baby Boomers to become gamblers.

Casinos are quickly spreading beyond the Nevada desert and Atlantic City to other states and, to feed those casinos, the industry needs to develop more players, especially younger ones. Marrying the Hard Rock Cafe's crowd of affluent rock fans with gambling would, if successful, create a new market for the gambling business, which now relies mostly on players in their 50s and older.

When Morton opened one of his restaurants, the Hard Rock Cafe, in Las Vegas last September, it proved so popular that one out of 10 area adults visited it in its first month of operation, according to John Boushy, Harrah's strategic marketing vice president.

"It's the 'in' place," said Marina Abodeely, a Las Vegas Hard Rock aficionado who markets casino trips for other hotels. "Getting young people to gamble is hard, but, of course, the casinos are going to try."

Hard Rock also is a global brand name -- built in part by sales of T shirts at its cafes from San Francisco to Stockholm -- that could be transplanted to areas newly opened to casinos, such as Iowa and Minnesota.

Morton indicated he also may build a chain of Hard Rock Hotels. "Ever since London, I have always thought about opening a Hard Rock Hotel," he said.

The average customer at Los Angeles' Hard Rock Cafe, at the edge of tony Beverly Hills, is aged 21 to 45, earns $80,000 yearly, and is twice as likely to visit Las Vegas as other Southern Californians in the same age group, Boushy said.

"We've not only got the sex and the sizzle, we've got the underlying marketing data to show it will work," he said.

The project also reflects the rise of themed casino resorts. The newMirage and Excalibur casinos accounted for all of the growth in gaming revenue in Las Vegas last year and took some business away from older properties.

The move also reflects efforts by Promus, Harrah's parent, to grow by managing casino hotels for others instead of building facilities itself.

Last year, Holiday Corp. sold its Holiday Inn chain and emerged as Promus, a company that promised investors riches in the '90s by focusing on gambling and niche hotels.

"It's a very interesting experiment, an interesting niche idea," said Glen Schaeffer, executive vice president of Circus Circus Enterprises, the enormously profitable operator of Nevada casinos themed around the Big Top and the giant Excalibur, the world's largest casino hotel with 4,000 rooms.

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