Deutsche Bank Gambles on Vegas' Newest Hotel and Casino

Can the Cosmopolitan survive in the struggling Sin City?

Jan. 18, 2011 — -- The hottest party in Las Vegas this New Year's Eve was not at any of the monster casinos people know so well. In fact, it had nothing to do with magicians or show girls.

Instead, Jay-Z and Coldplay headlined a concert that included performances by Beyonce, John Mayer and Kanye West at a hotel start-up on Vegas' Strip. The property had no history and no customer base, and many thought it had no chance of ever opening. But against all odds, The Cosmopolitan is the talk of Sin City these days, for reasons that go far beyond its curious ad campaign, which includes a bellboy with no pants.

"My mom called me and she said, 'I saw that commercial and I don't know what it meant, but I kind of liked it,'" said John Unwin, the CEO of The Cosmopolitan. "We've had good's got a pants-less bellboy and it's got puppies."

Unwin is the leading man in a story that symbolizes America's boom-and-bust era like few others.

Six years ago a developer named Ian Bruce Eichner had plans for a $3.9 billion monstrosity with 28-foot-robots playing guitars and a tower of expensive condos. But when he defaulted on his loans, Deutsche Bank became the sudden owners of the unfinished hotel-casino, and the first bank to own a hotel on the Vegas Strip.

After finding no buyers, the German bank bought out The Cosmopolitan itself for $1 billion. It lured Unwin away from Caesar's Palace, where he was working as the General Manager, and finished the place with an entirely new concept.

Vegas is still limping back from a horrible slump, with too many rooms and not enough guests. If The Cosmopolitan somehow manages to draw more gamblers than its bigger neighbor, the Bellagio, it would take 15 years for Deutsche Bank to break even.

"What people have said to me is how does it feel to be the last in a 21-year run of these mega-casino resorts being built and developed in Las Vegas and I don't see it that way," said Unwin. "Las Vegas has a great history of reinventing itself. And you can think of a few periods of time -- the Mirage being one example -- it was a sea change for Las Vegas. I believe that The Cosmopolitan will be seen as the beginning of that next era."

"We call our customer the curious class," Unwin said, "which is 59 million Americans who self-identify as they enjoy travel. They're open-minded. They like adventure, they like to explore, they enjoy foreign food and they enjoy interesting hotel concepts," said Unwin.

Architect David Rockwell had to take a relatively small nine-acre space and build upwards to design the lavish Cosmopolitan. His best known work includes the home of the Academy Awards, the ultra-hip Nobu restaurants and even experimental playgrounds. Now the hotel is one of the most posh places in Vegas, with Rockwell's lobby that seems to be more like a post-modern art gallery than just a place to check in.

The Newest Casino in Vegas

The Cosmopolitan also devoted some of its most valuable real estate to a Dutch design store that sells expensive chairs made from recycled rags.

One of the most remarkable features of the hotel is the enormous chandelier designed by Rockwell that doubles as a bar and restaurant. It's complete with a lineup of rock star chefs, such as Chef Jose Andres, offering Iberico ham and cavier tacos.

"We wanted to bring the spirit of Spain, so many of these things that you see are from the Spanish designers, the Spanish artists -- the wall, the paintings, the chairs. So here is like the Spain of today, but also the Spain of yesterday," said Andres.

The scent of Andres' one-of-a-kind paella fire pit wafts next door, where instead of another chain boutique, world-known DJ Vice caters to a subculture that craves custom Nikes with his store, CSVR, in the hotel.

"These people wait and wait for days for these shoes," said DJ Vice.

A household name in the club scene, DJ Vice also has signed on to keep the party pumping at The Cosmopolitan, a job obviously not for amateurs.

And then there are the high-roller rooms, each with a balcony overlooking the glitz of the Vegas strip, including the Bellagio's fountains. These terrace rooms are another one-of-a-kind experience, but the view also shows what Unwin and his team are up against.

"I'm not in this for an altruistic purpose, you know. We're in a business to make money. But I want people to feel like it's a fair exchange," said Unwin. "So when I walk on the plane, I'm gonna be able to tell the guy who stayed at the Cosmopolitan because while he's tired and he's leaning back, he's got a smile on his face. And that's the whole thing about a feeling worth returning to."