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Jennifer Robison

Hard Rock soldiers on despite slump

9 February 2009

LAS VEGAS, Nevada -- Geez, the big guys on the Strip get all the attention.

Observers fretted in 2008 over whether the $9.1 billion CityCenter could complete its financing, and when the mothballed, $4.8 billion Echelon would start going vertical again. But as hands wrung over those megaresort woes, one smaller Strip project kept chugging along.

A massive Hard Rock Cafe -- the chain's second local outpost -- is nearly complete, and scheduled to open July 9 with more than 500 employees.

Hard Rock International tore down a Denny's restaurant between the Smith & Wollensky steakhouse and the Showcase to make way for the café. The three-story building will have 42,000 square feet of space, including a Hard Rock Cafe store on the first floor, a 900-seat restaurant on the second floor and a room holding banquets or concerts for up to 1,000 on the top floor. It'll also feature an interactive wall and tabletops allowing patrons to call up their favorite songs and music videos.

Gamma Construction is building the café. Hard Rock officials wouldn't disclose the project's cost.

Given the recession, it might not be the most auspicious time to open a major new restaurant. But Hard Rock International announced the project in September 2007, and because construction was well under way when 2008's hard times hit, the company forged ahead.

Plus, there's no truly bad time to open near one of the busiest intersections on one of the world's busiest resort corridors, said Peter Lin, Hard Rock's local senior sales manager. The company has wanted a Strip location for years, and the volume of tourists walking along the Strip near Tropicana Avenue makes the new café "definitely feasible," Lin said.

John Knott, executive vice president of CB Richard Ellis and an expert on Strip real estate, agreed that the café's location "bodes well" for its prospects.

"Certainly, it's one of the areas on the Strip with the highest foot traffic," Knott said. "Other retailers in that area have been very successful, particularly those that have direct access into the store from the Strip."

And though today's market serves up its fair share of challenges, smart operators won't let a slumping economy force long-term decisions, Knott said. The economy will bounce back eventually, and grow again over time.

Lin said he and other Hard Rock officials believe Las Vegas draws enough consumers to support both cafés. Each will serve a different clientele. The restaurant at Paradise Road and Koval Lane shares a site with the Hard Rock Hotel, separately owned by Morgans Hotel Group. It's more intimate, Lin said, and partly because of the neighboring hotel, it attracts clusters of social groups. The Strip cafe will appeal to a wide variety of pedestrians who decide, on impulse, to check out the restaurant. Hard Rock International executives plan to cross-promote both locations, though Knott said the second café could pull from the existing Hard Rock's customer base.

"With a presence on the Strip, it wouldn't surprise me if the new Hard Rock Cafe outperforms the existing one," Knott said. "Will you have people who would have gone to the Hard Rock on Paradise, but they'll go to the new one instead? Of course. But more customers overall will visit a Hard Rock Cafe with the two combined."

Knott said the opening of a big project also boosts a hospitality sector that's taken several lumps in the last year, including those financing troubles for CityCenter and that Echelon stoppage. It's also a shot in the arm for a town where unemployment has hit 9.1 percent, he noted.

Lin said hiring would begin in late May or early June.

Hard Rock soldiers on despite slump is republished from