Executives in the nightclub industry were unsure of how their Las Vegas venues would fare during the summer of 2021.
Club leadership, fresh off of months of changing restrictions and a public potentially wary of spaces dedicated to being close to strangers, didn’t know whether customers would be ready to return.
But the ultimate outcome is a story many are familiar with now: Pent-up demand brought people back to the dance floor.
“I remember standing in one of the clubs, and it was like the last 18 months completely disappeared,” said James Algate, senior vice president of entertainment and brand strategy for Tao Group Hospitality, which operates Jewel, Omnia, Tao and other prominent venues on the Strip.
“It just felt like everything was back to normal. Really, the last year has been incredibly strong business across all of our portfolio, certainly in Las Vegas, and the rest of the world.”
The crowds are back at clubs, which are experiencing the same resurgence that has brought tourists ready to spend on experiences such as concerts, sporting events and gambling found in Vegas. Discotech — a mobile app with 541,000 registered users that operates like a digital club promoter by selling club tables, general admission tickets and spots on a guest list — saw a 58 percent increase in Las Vegas sales from the first half of 2021 and 2022.
The growth created a chance for change and brought back a vital section of the Las Vegas scene with some new practices.
Escapism packs the clubs
The revival of the club scene brought some new wants and habits out of consumers, club executives say. Top of mind were ways to worry about the outside world less, Algate said.
“Generally, people wanted the escapism,” he said. “They wanted to be surrounded by other people. They wanted that experience you can’t get from sitting at home for however many months. People just wanted an excuse to be out and we were giving them a great excuse. We’ve got the best venues in the world, and everybody flocked to Las Vegas to see what they’ve been missing for the last couple of years.”
For some, that meant “more.” Philip Loomis, vice president of sales and hospitality for Drai’s Nightclub located at The Cromwell, said he noticed more first-time bottle service customers and other perk purchases.
More people came with their own groups, too. It was more common than before for people to come in groups of friends and family, he said.
“There was less of the, ‘Let’s go out to the club and meet someone in the crowd, have this whirlwind busy night,’” Loomis said. “Don’t get me wrong, there was plenty of that. But I think the percentage was people that were coming out to get together with their old college lacrosse team, more about those existing relationships.”
It was also an ideal time to expand the Las Vegas Party Pass, a $99-minimum wristband that gives access to eight of Tao Group Hospitality’s day and night venues. Tao — which merged with long-time competitor Hakkasan Group in 2021 — had piloted the initiative before the pandemic but saw more customer interest as the merger boosted the group’s Las Vegas portfolio.
“It became far more attractive for the consumer and our guests when we merged the two companies together because the offering became so much more powerful,” Algate said. “We’ve seen very, very encouraging sales. We’ve delivered something that no other group can on the Las Vegas Strip.”
What the businesses will keep
The pandemic’s impact on the industry is expected to leave a few lasting changes, executives said. Perhaps most important is the illness mitigation strategies, said J.C. Diaz, executive director of the American Nightlife Association, a trade group.
The group recommended guidelines to help nightlife industry members across the country safely reopen. Diaz said he wants those changes to remain in place as the country moves through another COVID-19 wave of infections – and any other possible epidemic.
“I’m hoping that we take all the lessons that we learned during the shutdown, including the mitigation strategies,” Diaz said. “I hope we stick with them in order to avoid people blaming us for the spread of the infections.”
Different technology was also introduced at many venues. At Tao Group spots, the tight labor market in 2021 led to more reliance on magnetometers for security clearance before club entrance instead of a larger security team using wands to check guests. The company found their use sped up the check-in process.
“We didn’t have the staff to do it, so it’s sort of a double-edged sword,” Algate said. “But what we’ve done is we’ve given the guests a better experience, because our lines are not as long, because we can get people processed through the venue quicker than we’ve ever (been) able to do in the past.”
Technology reliance during the pandemic also changed in favor of online ticketing, Discotech CEO Ian Chen said. While some club-goers purchased tickets online ahead of time prepandemic, capacity measuring and more general tech use during the pandemic gave way to more reliance on digital platforms. Chen said he expects that to stick around.
“Even though I don’t think the market has fully come back to life from the pandemic, our revenue is still higher now than it was prepandemic,” Chen said. “This kind of shift toward digital booking and online digitization has been like a good trend for us.”
At Drai’s, Loomis saw the pandemic create a more even playing field among the ultra-competitive nightclub market. Other clubs that used to act as loss leaders to get guests into the resort, now had to focus on efficiencies, he said.
Coming out of the pandemic, Loomis said, the club will focus less on high general admission sales and more on the guest experience.
“It’s less about packing it in and more about creating a wonderful, busy environment with good energy that is also comfortable,” he said.