Deutsche Bank Gambles on Vegas' Newest Hotel and Casino

Can the Cosmopolitan survive in the struggling Sin City?

ByABC News
January 17, 2011, 1:15 PM

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.