I’ve been wanting to write about the SLS Hotel in Beverly Hills for a few months now – before the website really even said anything constructive leaving the viewer to really speculate what the hotel was going to be like.

Now that the hotel is soon to open, and the website has launched with some detailed pictures, the game plan of SLS Hotels, as well as it’s owner and it’s owners firm really starts to come into focus.

Last week was a great article in the Wall Street Journal about Sam Nazarian – before the article, all I knew about him was he was some nightclub big shot in LA, had a company SBE Entertainment, recently bought the Sahara Hotel & Casino in Las Vegas, and was starting a new hotel chain called SLS Hotels.

SLS Beverly Hills Exterior

SLS Beverly Hills Entrance

SLS Beverly Hills Lobby

SLS Beverly Hills Restaurant

SLS Beverly Hills Pool Area

The thing that really got me interested in him was SLS’s affiliation with Starwood’s Luxury Collection Brand, plus his quest to build a chain of these SLS Hotels (PS: SLS Miami is next after the SLS Beverly Hills opens by the end of the year).

Normally if someone is going to build a chain of hotels that they create their own brand for – they are not going to partner up with Starwood, Marriott and the like – Nazarian on the other hands seems to be building a chain of hotels, unique and original, while having Starwood’s Luxury Collection manage them. If he continues this with the SLS Miami, and future SLS locations – he’s a genius!

Here’s why: He’s opening up a chain of hotels – from the looks of the SLS Beverly Hills, and his habit of using Phillip Stark to design his developments, they will all be high end boutique hotels, but rather than invest in the management portion of the hotels, he’s hiring Starwood to handle the day-to-day operations of ordering supplies, hiring and training employees, etc. But by using the Luxury Collection brand – he is still able to fully promote his own brand without stepping on Starwood’s feet.. Starwood’s Luxury Collection is designed for hotels that have their own brand, are top-tier, but are looking for the backing of a world-wide hotel operator to handle the management and most importantly – ability to connect to their booking system and member rewards program.

In a nutshell, he’s getting the promotional and marketing push of Starwood, while simultaneously creating and expanding his own hotel brand. Wow. That’s pretty smart. It almost feels like he’s cheating in the whole “building a hotel brand from scratch kinda thing”.

Nazarian also owns or has an interest in a few other hotels – a DoubleTree in California, two Sheratons, and two Hilton Garden Inns – definitely nothing too extravagant, and all of the hotels are managed by other company’s (APMC Group and Kor Hotels), so he is not completely new to hotels – but starting a hotel brand from scratch is new.

Another really interesting piece of the Nazarian empire is his purchase of the Sahara Hotel & Casino in Las Vegas. I personally keep forgetting that the Sahara is still open and in business (WSJ’s article says rooms are $34 bucks a night) thinking that it was one of those hotels imploded like every other original Las Vegas hotel was. So it goes without saying that a huge renovation is in the cards – and is currently in progress, but according to the WSJ article – a lot of people are not sure that he is able to really pull it off and have a successful hotel once it re-opens in 2011.

Nazarian’s intention of the Sahara is to become hotel for the hip-crowd, the same people who frequent his nightclubs who are center to the LA lifestyle that he is used too serving. He claims that there really is no other casino who caters toward that lifestyle and there is a huge undeserved market for that type of customer, at a price point that they can afford. Sure, the Hard Rock Casino caters toward a younger crowd, so does the Palm – but look at their nightly prices.. You’re talking sometimes $400-500 bucks for a room. Nazarian is saying that he will get room rates to around $200 a night, while giving the customers places to go by opening up locations of his existing nightclubs within the Sahara.

I think its a great idea.

But I’m more interested in the SLS brand and its growth potential.

Since SLS is planning on opening in Miami after their Beverly Hills location opens – i decided to see if they took up any domain names, as its a very good possibility that if they scoop up the domain names, they have plans to open a hotel there – maybe not now, but definitely in the future..

Here are some domains the SLS has taken: www.SLSNewYork.com, www.SLSBoston.com, www.SLSLasVegas.com, www.SLSMiami.com, www.SLSSanFrancisco.com, www.SLSWashingtonDC.com, www.SLSLosAngeles.com and www.SLSBeverlyHills.com (the last two are expected though) entering any of those domains takes you to the main www.SLSHotels.com website.

Some domains that didn’t work – www.SLSPhiladelphia.com, www.SLSChicago.com, www.SLSScottsdale.com, www.SLSPhoenix.com, www.SLSAtlanta.com

Once again – you really can’t base a hotel’s opening on what domain names are taken and what are not – especially this early in the game, but it’s definitely worth noting that they have taken the time to get those names, so it means that someone somewhere is considering those locations.

I’ll be keeping an eye on SBE Entertainment and their projects – especially the Sahara and SLS.

andrew@alconic-inc.com

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