Botanic, Volcanic, Dynamic, Historic: The Mirage Turns 30

Las Vegas changed forever on November 22 1989, when Steve Wynn’s iconic Mirage opened its doors. Wynn was both composer and conductor of this high-risk composition, bringing together an orchestra of talent to create a perfect crescendo.

On July 9, 1997, on the eve of my 21st birthday, I first arrived in Las Vegas. We stayed at The Mirage. Like the hundreds of millions that have walked through the doors, I was in awe of what I witnessed. On my return to the UK, I had a $1 chip from the resort framed and placed on my wall.

A career in real estate development and finance followed, alongside a business school position, where my research and teaching focused on the evolution of strategy within Las Vegas casino resorts. In 2015, I moved to Las Vegas to further my understanding of the unique development aspects of this industry. The Mirage has played a formative role in shaping my career and outlook to strategic thinking. I have dissected and studied it and it is my honor and pleasure to probe into the most important event in the history of resort development for Global Gaming Business.

Las Vegas, hospitality management and strategic thinking changed forever when The Mirage opened its doors on November 22, 1989. Steve Wynn followed a rare path as both composer and conductor of a near-flawless, high-risk composition, bringing together an orchestra of talent to form a perfect crescendo.

 

Scoring the Piece

Ironically, the origins of The Mirage were seeded on the opening night of Caesars Palace in August 1966. Jay Sarno, Las Vegas’ Mozart, welcomed the world to his greatest creation, a fantasy resort like nothing else on earth. Among the guests present to witness Sarno in full flow was Stephen Alan Wynn, a 24-year-old “Connecticuter” recently graduated from the University of Pennsylvania in English Literature.

The following year, Steve and Elaine Wynn moved to Las Vegas and became active members of the business community, which enabled them to acquire an interest in and operate the Golden Nugget casino on Fremont Street in 1971. Under Wynn’s ownership, the property was transformed. He was undoubtedly more sophisticated and ambitious than his Fremont peers, old-school gambling operators with deep roots in the way things should be done. Wynn sought to synthesize his wide range of influences in psychology, art and design into the casino environment. The Wynns, and the kernel of a team that were to remain close for many years, turned the Nugget into Downtown’s premier resort, opening a first hotel tower in 1977 and by 1980 outstripping the competition, even surpassing some Strip resorts in terms of revenue.

The Nugget’s success was gaining notice and as Atlantic City became the second U.S. jurisdiction to allow gambling, Wynn went back east, finally able to implement ideas in a ground up design. Certainly not the biggest in that market (with 506 rooms), the Golden Nugget soon became the highest-grossing casino in town, surpassing much larger competitors. It was sold in 1987 after Wynn’s hypothesis had proven correct; it wasn’t about the casino, it was about the customer.

It’s difficult to imagine Las Vegas in the mid-1980s. There had been no new large Strip development since the first MGM Grand in 1973, which had been sold and rebranded as Bally’s.

Scarred by a tragic fire that struck the Grand in 1980, killing 87 people and injuring hundreds more, founder Kirk Kerkorian had withdrawn from the industry. Las Vegas giant Caesars World was focused on Atlantic City, and Bennett and Pennington’s publicly traded Circus Circus Enterprises was investing in Reno and Laughlin. The famed Dunes fell into bankruptcy, as did the Riviera. Jay Sarno died in 1984, his planned 6,000-room Grandissimo resort died with him. The local scuttlebutt focused on Imperial Palace owner Ralph Engelstadt’s Nazi-themed parties, the unwinding of Howard Hughes’ vast legacy, and ongoing conflict between the city’s casinos and the Culinary Workers Union.

Steve Wynn outside The Mirage

Yet Wynn believed in the bright lights of Las Vegas, often recalling memories of visiting as a child with his father in 1952. Atlantic City could never have that. Wynn was the first to recognize that people did not come to Las Vegas to gamble, they came to have positive emotional experiences, which, if pronounced, would form memories of their own, memories they would seek to repeat.

Las Vegas banker E. Parry Thomas was an enabler of Las Vegas’ growth. A strong supporter of Wynn, Thomas had ensured that Wynn could grow his businesses in Las Vegas, creating jobs and revenues for all. Wynn’s ambitious Victoria Bay, which was aborted, and The Golden Nugget Center Strip (which was to become The Mirage) were outside the scope of Thomas’ financial influence. The only comparable casino construction at that time in Las Vegas was by Meshulam Riklis, as he expanded his Riveria. Riklis was a financier rather than a developer, and had pioneered high interest-bearing bonds to finance his casinos and multiple other business ventures. One of his associates, Michael Milken, had emulated this structure to finance the expansion and construction of The Golden Nugget projects.

For The Mirage, the duo raised $535 million in bonds, out of the $620 million required for the project. As they took Riklis’ model to new heights, Wynn and Milken became close friends. A site was assembled to the north of Caesars Palace, including Hughes’ Castaways casino.

Over the previous decade, Wynn had tried and tested his orchestra, pulling together a team of trusted executives that operated the Nuggets on both coasts, many of whom were to dominate the industry for decades.

And of course, there was Steve Wynn himself. He was not the anonymous casino boss of yesteryear, having appeared in a series of advertisements for The Golden Nugget in Atlantic City alongside Frank Sinatra. He sought to cultivate a young, fresh, stylish image with the message that his properties were elegant, aspirational entertainment resorts, where casino gaming was only part of the experience.

With financing secure, land acquired and a strong team in place, Wynn had a relentless focus on his mission to develop not just another casino, but a true integrated resort, with the design, brand, theme, content and programming, employee interaction and customer journey rising in perfect harmony to meet consumer needs like no other.

 

The Overture

Stepping aside from the narrative, we can reflect on the impact that The Mirage had on strategic thinking.

Harvard Professor Theodore Levitt published his seminal work, Marketing Myopia, in 1960. His thesis was that businesses were too focused on selling their product—then considered as marketing—whereas true marketing was identifying the needs of a customer and positioning a product to meet those needs.

Until this point, marketing in casinos was still all about selling the product. The Golden Nuggets on Fremont Street and in Atlantic City were both in established, hyper-competitive environments. Price leadership did not lead to success. Taking a vacation that involved gaming was not about price. It was about creating an environment to self-actualize, allowing many of the customers who chose to play games of financial risk to actually enjoy that risk.

Wynn also realized that his product was non-diversifiable: the same games are sold in every casino, and most aspects of the experience could be replicated. Understanding that the true strategic asset is the customer, the Nugget and Mirage teams were challenged to anticipate, identify and meet the full range of needs of those customers, whether physical, functional or emotional.

If customers left feeling satisfied, believing they had received good value and engaged in positive experiences, they would come back. Within competitive hospitality markets, loyalty is the only driver of sustainable competitive advantage.

Within the study of customer loyalty there are different customers, different needs and different loyalty drivers. The first of these loyalty drivers is transactional, where if a customer spends x, they receive y in return.

At its infancy in 1989, player cards had been implemented in other properties. But The Mirage, like no other, spent considerable resources creating and building its database. There was nothing “off the shelf” available, as there is now. The algorithm-based approach to customer value would follow a decade later, but the Mirage Players Club could identify the most valuable players, see if they were in the building, and give them benefits, such as comps or special privileges. For many, the feeling of being recognized in this manner was reason enough to return.

Functional loyalty was also considered at The Mirage. People stay and return to a particular resort because of the functional aspects, which were all best in class.

The convention areas were designed to meet functional needs as a core part of the property, not an afterthought, as they had been in many hotels. The convention halls were designed to be close to the guestroom elevators and resort amenities. The Mirage immediately challenged and then surpassed the primacy of Caesars Palace, assisted by Charles Monahan, who moved next door to become The Mirage’s head of conventions.

Each of the restaurants and amenities were beautifully designed, with something for all customers across price points. Whatever your desired vacation activity, from dining to gaming to golf at Shadow Creek, at The Mirage, it was the best.

Increasingly popular in Las Vegas is tribal loyalty, where customers are attracted by a particular brand, chef or artist that aligned with or reflected their identity or beliefs. At the time of The Mirage, there were no celebrity chefs, and all the brands were proprietary. The Mirage used entertainment to do this, and although not as pronounced as in later projects, Wynn himself played this role, especially with the casino customers who had been his patrons at the Golden Nugget.

Some operators segmented along demographic lines, such as Circus Circus and its sister property, Excalibur, which was to open within months of The Mirage. However, Wynn and his team sought to segment on the basis of emotion, namely aspiration, before this was common practice. “How do we make our customers feel?” was the question. The Mirage built visual prompts to convey aspiration, desire and escapism to its guests.

Wynn was inspired by vacations in Hawaii and in particular, resorts created by Christopher Hemmeter. The Mirage/Nugget teams visited Hemmeter’s resorts, trying to learn ways to capture the essence of the tropical and interpret it for the desert. The resulting landscaping was designed by Don Brinkerhoff, and stands as one of the finest escapist aspects in Las Vegas today.

DeRuyter Butler, who leads Wynn Design Architecture and worked closely with Wynn on The Mirage and subsequent projects, offered insights into how sophisticated the process was in developing the cognitive experience. “We tried to appeal to all the natural senses to heighten the emotional response to all aspects of the environment. We went to great lengths to make the water white on the volcano and waterfalls, creating a texture on the rock to produce micro-bubbles, giving the white effect seen in our customers idealized fantasy. Skin tone looks most attractive in firelight—that is what we were aiming for. The lighting was deliberate, designed to give off a warm, cozy, friendly coloration. We were the first operator to scent our property. The smell of The Mirage was a distinctive pina colada, evoking an exotic location.”

Whereas some of the competitive set had focused on certain aspects of customer loyalty, The Mirage was the first resort to bring all these together as a singular objective, with a mission of customer satisfaction.


“The Mirage was everybody’s opportunity to do our best work—and Steve demanded that we all do our best work.”Barry Shier, Executive Vice President of Marketing and Hotel Operations, Mirage Resorts


The Orchestra

Building The Mirage was an ensemble act, featuring individuals contributing career defining performances.

The Mirage development team was led by Joel Bergman, one of the most experienced casino architects in the country, famed for his eye for detail. He joined Martin Stern’s practice in 1968 and had worked on new build and remodels of everything from The Desert Inn, Sands, Flamingo and the original MGM Grand before joining The Golden Nugget Team in 1978. At the age of 42, he was the oldest guy there.

Wynn and Bergman worked closely together, the former offering enormous creative input with ferocious intensity and expectation, the latter linking all aspects of Wynn’s imagination into architectural form. It was undoubtedly Wynn’s project, but without Bergman, The Mirage would have been a different building.

Bergman’s partner was Paul Steelman, an Atlantic City native who joined when the company was based on the east coast. Steve walked into the office at 1 a.m. and asked me what I was drawing,” Steelman said. “That night I had started a sketch of a modern facility, more modern Hawaiian, more Rock Resorts. Steve looked at the sketch and asked his daughter what she thought. The start of The Mirage design was born.”

Roger Thomas, who has since become a design icon, was an integral part of The Mirage team, and worked alongside Wynn for decades. “We instituted a new paradigm for Las Vegas,” he said. “This was not a casino resort, this was a resort with a casino.”

Unlike “replitecture,” a phrase coined by Thomas to denote literal theming, The Mirage was a case of “evocatecture,” where the impression of something is used to inspire the language and sensibilities of the design. The subtlety of this is often lost in the interpretation of the visual.

Nothing to date had ever been built on the scale of The Mirage, yet the designers had one thing at the forefront of every decision: the customer. “There were hundreds, if not thousands of sketches,” recalls Alan Feldman, who oversaw public and media relations at Mirage Resorts.

Unlike contemporary casinos seeking to build points of entry near the sidewalk, hoping to lure passing pedestrians, The Mirage was set back from the Strip, inspired by Sarno’s decision to extend the resort experience to street level. Archways over the drive deliberately delineated the fantastic from the mundane. The aforementioned white waterfalls, statues, and lush landscaping combined to form a grand entrance and sense of arrival at an unmistakable destination.

“Steve told me he wanted us to create an oasis in the middle of a dry, arid desert,” recalls Don Brinkerhoff, CEO of Lifescapes International and longstanding Wynn collaborator. “He wanted orchids and other tropical foliage, so I told him we would need to control the environment by taking it inside

Wynn had clear instructions for Brinkerhoff: “Do research on sunlight and shade so that it could be believable, and more importantly, keep the promise of a realistic tropical paradise.”

Whether the customer came from either of the valets or via pedestrian access, everyone crossed the wooden bridge through the glass domed tropical rainforest, which offered an ethereal feel to those who passed through. The sound of the waterfall and enveloping winding trees signaled a statement of arrival, an Instagram moment in the Polaroid age. Originally conceived as a sunken bar with heavy foliage by legendary interior designer Henry “Bud” Conversano, the design team did not want the customer to walk directly into the casino on arrival, but sought to convey the essence of a resort, setting the tone for the customer journey ahead.

“No one had ever designed such a verdant, tropical experience until The Mirage. And we all participated in its creation in an evolutionary way. We collectively set the stage for experiential destinations,” remembers Brinkerhoff.

Attention was paid to the distances customers had to travel, keeping everything tight and everyone in the building. Except for the volcano.

The only ways to view the eruptions, which became the most visual icon of The Mirage, was outside the building or the rooms at the front of the hotel. “It became a great marketing tool. If this is what they have on the outside for free, can you imagine what they have on the inside?” asked Schorr. (The gas in the volcano was infused with a coconut scent, ostensibly to mask a pungent odor, but as an unintended outcome, it triggered a positive cerebral reaction in those watching the spectacle.)

Once the name Mirage was chosen, La Mirage Casino and The Mirage Motel, both agreed to relinquish their names—for a price. The iconic Mirage logo with the five colored palm trees was created by Clement Mok, who had designed for Apple. But Bergman’s original font remains on the top of the building and marquee, with the more stylized logo everywhere else.

“If you were in New York, Miami or Chicago you would see the fancifully colored Mirage palm tree logo on bags everywhere,” recalled Butler. Today Las Vegas has become one of the most important and credible brand curators in America, an impossible thought in 1989, but one that started with The Mirage.

The role of entertainment in the marketing message within casinos had been evident in Las Vegas for decades. The Sands will always be defined by the Copa Room, Caesars by boxing, and the International/Hilton by Elvis.

Wynn had leveraged his friendship with Frank Sinatra in developing the entertainment platform in Atlantic City, but it was improbable that a 75-year-old Sinatra would be either willing or able to undertake the strenuous schedule that Wynn needed for his new property. Instead, Wynn turned to Siegfried and Roy, the German illusionists who were performing at The New Frontier.

Siegfried and Roy

The duo were unique entertainers, bringing with them 58 white tigers and 19 white lions, all rare endangered species. Wynn sought to integrate them fully into the property. Real tigers were on display adjacent to the pedestrian entrance, visible to all who came from neighboring properties, and at the rear of the property in a specially constructed habitat.

John O’Reilly, the prominent Las Vegas lawyer who served as chairman of the Nevada Gaming Commission, acted for Siegfried and Roy. He and Irvin and Kenneth Feld of Feld Entertainment said the relationship between the entertainers and their audience was the closest they had ever seen. Moreover, with the meticulous detail in the costumes, technology, staging, and the world-famous  production team sourced from across the world, the $100 million cost of the show (which made it the most expensive ever produced) and the personal commitment of Steve Wynn played a significant role in the success of The Mirage and elevated the global perceptions of Las Vegas as an entertainment destination.

“We didn’t take telephone bookings; unless you were staying at the hotel, you had to get tickets on that day, so everyone had to come in twice,” .” said Schorr. “So people came for coffee, lunch, dinner or even play the slots or blackjack. If we had a show on, we also made income elsewhere.”

From opening night on February 1, 1990, the 1,500-seat auditorium was sold out twice nightly. Siegfried and Roy became as famous as The Mirage, with the show generating upwards of $40 million per annum in ticket revenues and an immeasurable amount of media imprints. This was especially important in reaching the international customers who had more vacation days than Americans and typically travelled longer. Thanks to The Mirage, Las Vegas was on its way to becoming an international tourist destination.

One of the observations in Learning From Las Vegas, Venturi and Brown’s appreciation of the city’s post-modernist architecture, was that the casino signage could convey a message faster than traditional architectural methods. With Siegfried and Roy and their white tigers, The Mirage could communicate globally, one of the earliest examples of a movement that was to be defined as post-modern marketing. The Mirage team were innovators in this discipline. They were practitioners of customer research, with significant investment made in sampling and studying the behaviors and characteristics of their target customers. There was a focus on new, unique and time limited experiences, communicated via a variety of media channels so that the customer could “discover” The Mirage. This approach was in contrast to the industry norm of that time and one that proved highly successful for The Mirage.

Feldman summarizes, “When communicating the resort, we never showed the property. It was left to the imagination. Steve didn’t want developer-speak. Whatever Donald Trump did, he wanted the opposite.”

The Mirage design team created an entertainment driven casino resort, capturing imagination, speculation and aspiration in the marketing and fashioned the discipline of customer-centric, emotional architecture within the physical environment.


“Steve was the greatest visionary since Walt Disney and he surrounded himself with the right team, one person had strengths when another person had a weakness.” Marc Schorr, then President and COO of the Golden Nugget Laughlin, later to become President of The Mirage


 

Mankins and Steele, in their 2005 paper, Turning Great Strategy Into Great Performance, list a series of rules to allow a business to succeed operationally:

  1. Keep it simple, make it concrete.
  2. Debate assumptions, not forecasts.
  3. Use a rigorous framework, speak a common language.
  4. Discuss resource deployments early.
  5. Clearly identify priorities.
  6. Continuously monitor performance.
  7. Reward and develop execution capabilities.

These practices were developed intuitively by Wynn’s team.

Wynn composed and conducted to a pulsating cadence, forcing others to work to his beat; they developed best practices into the culture, decades before others had even defined it. Like a true orchestra, there were many competing players vying for prominence at any given moment. At times the tension was evident, but was contained as everyone played to the ambition of the piece.

Elaine and Kenny Wynn were often present, alongside the many unheralded players, such Joyce Luman, keeping the show on the road, filling in the gaps and offering solid counsel during some of the wilder movements.

“Elaine in particular was always integral in the design meetings,” said Thomas. “Steve looked to her incredible taste and understanding of what people wanted.”

“There were a lot of quality people working at The Mirage. Steve Wynn and The Mirage group had vision, bravado and courage, and delivered quality and attention to detail on a large scale.” recalls Bill Hornbuckle, VP of Hotel Operations in 1989. Today he is President of MGM Resorts International, the company that operates The Mirage.

“Bobby Baldwin was the key. He had a great memory and strategic mind,” observed Arte Nathan, VP Human Resources at Mirage, himself a vital part of the team.

Wynn had recruited talent outside Las Vegas, but Baldwin knew casinos inside-out; as a former professional poker player he was well-versed with the culture and operations within established business practice of casinos. “He had the ability to take Wynn’s vision into a structured commercial product,” believed Butler, who in turn converted the conversations between executives into architectural drawings. Baldwin became the first president of The Mirage and oversaw property-level functions.

“We looked at Caesars and The Hilton. All the properties were built outside-in. What we did differently was to build inside-out. We built The Mirage for operational functionality,” stated Schorr. “We built a tunnel system to a giant warehouse to service the central kitchen, which led to all our restaurants being operated more efficiently than anything seen before.”

Nobody had to walk more than 300 feet from the elevator to their room and when the door to the rooms were opened, the customer faced a window with an open view. All this was done deliberately. Having built the Golden Nuggets, Wynn knew that not all of his customers were high-rollers, but he knew that they all wanted to feel like they were, the aspirational message was pervasive in everything.

“Our mission was to keep the promise,” noted Nathan. “That promise was to both the guests and the employees. We were terrified to disappoint Steve.”

“What was remarkable about The Mirage was all the firsts that we did,” says believes Shier, who joined The Golden Nugget from The Waldorf-Astoria in New York. “No other resort built had such volume There were 30 desks at check-in, in front of the world’s largest single-tank aquarium. We went to Chicago to study how baggage was handled at the airport, seeking a solution to avoid thousands of bags being transported to the rooms without being dragged through the casino.”

The solution was a mezzanine holding space, but even this was backed up when customers did not immediately head to their rooms as expected, but stopped for hours to marvel at the resort that they had entered, which left the bell desk with thousands of bags all requiring delivery at the same time, when guests finally made it to their rooms, hours after check in.

The 3,044 rooms were not based on forecast demand or even optimal revenues, but on delivering the uppermost customer experience at scale. Shier recalls the detailed studies that were conducted on time and space to optimize all aspects, from room service delivery times to how far customers had to walk.

“The Strip guys saw us as Downtown operators and didn’t realize that we had experience with high rollers in Atlantic City,” observed Schorr, yet the management team didn’t appreciate the demand that there would be within the VIP market. The first improvement that was required was in enlarging the baccarat room and the second was in building VIP villas for very special guests. Both were done within months and paid off nearly immediately.

Typically, room sales were split into thirds between the various departments; tourism, casino and conventions, each filling their target quota. Feldman recalls “Some of the worst fights I saw in the industry were between the convention, tourist and casino teams, arguing about room mix.” At The Mirage, everyone wanted more rooms.


“The Mirage is the grandfather of modern Las Vegas and 30 years later the formula that we used there still works.”Bill Hornbuckle, President of MGM Resorts International and former VP of Hotel Operations at Mirage


Backstage

Strategist Joel Kurtzman coined the phrase “common purpose” in identifying organizations that harness employee power to achieve outstanding results. Wynn Resorts is one of his case studies, and he praised the innovation that was forged decades earlier in the volcanic heat of The Mirage.

Mirage front desk with aquarium

Although there were many experienced leaders with hospitality backgrounds driving the opening, Shier ultimately believes the practice of creating common purpose emanated around the philosophies of Steve Wynn, who had absorbed customer engagement from his days working in his father’s bingo halls; whatever their background or means, every customer was to be treated with respect and dignity.

It was the responsibility of all managers to inculcate this culture throughout the company.

“In Atlantic City and Downtown, the Golden Nuggets were our learning laboratory in what worked and what didn’t; the most important outcome was in developing employee relationships, focusing on recognition, training and motivation, but The Mirage was on a different scale. We had 55,000 applicants for jobs, and we had to keep the promise, even for applicants,” explained Nathan.

“Firstly, every role that was created had an assigned trainer, that was over 300 trainers—about 290 more trainers than our competitors. Secondly, we broke down each role to key elements; what, why and how, communicating in detail what was expected. And thirdly, we had one month’s full pre-training for everyone. Everyone knew what they were doing, so were not stressed about the job in hand and could smile and truly take care of people. The team training that we started in The Mirage is now seen across the industry. It kept our staff calm, helped them succeed and most importantly, kept them loyal.”

“Right from the beginning of this project, Steve was saying that HR was not a department, it was the department, it was the way we do business. That set the tone for the company’s expectations and planning,” said Nathan.

A decade before Heskett was forming the Customer Service Profit Chain at Harvard, Wynn knew that if frontline staff, whether dealers, dancers or doormen were empowered and happy, this would relate to better engagement, thus assist in determining the perception of the property and engender customer satisfaction.

Everybody working at The Mirage had badges with their names—but not their job titles. Instead the badges said where they came from. “We wanted guests to have conversations with our employees,” said Schorr. This was part of the relentless focus on training to ensure that everyone felt connected and valued as individuals. Not only were the staff there to perform functions, and did that well, but unlike anything that had been seen on this scale, the employees were part of the guest experience, bringing a sense of intimacy which could have easily been lost in the grandeur and scale of the property.

Famously, the back-of-house at The Mirage broke new grounds, as the daily employee journey was considered part of the resort design, minimizing walk time and designed to make the employees calm, confident and happy at work. The Employee Dining Room was nicer than many restaurants.

It was having the employees central to the project that enabled The Mirage to overcome what many believed was an intractable problem in Las Vegas at that time, could casinos and the Culinary Union work together without conflict?

Daily protests and strikes were commonplace outside casinos when in May of 1989, the Golden Nugget and The Las Vegas Culinary Workers Union 226 came to an agreement. Having witnessed Wynn in action, the union’s leadership had gained confidence that he was unlike some of his competitors and trusted his belief of the importance of his employees to be the faces and the voices of his new resort.

Wynn, Shier and Nathan, alongside local union leadership, rewrote the contract between casinos and employees, for the first time incorporating overall customer satisfaction into the job description of every employee.

Although the same deal was offered across town, the paradigm shift in labor relations that started at The Mirage took time to permeate, but eventually changed the industry.

Nathan observed of his competitors, “Their reluctance to consider this landmark change in philosophy and practice gave Mirage a huge advantage in customer service and satisfaction, and ultimately in overall performance. In the 11 years of operations, Mirage Resorts had one grievance and no arbitrations. Nobody else even came close: it wasn’t that we rolled over in our management decision making, we worked with the Union to resolve issues and conflicts before they ever got started. It was truly a partnership.”

Nathan further recalls, that as The Mirage was nearing completion, “Steve stopped near the front doors and asked us what we thought of giving every employee 10 shares of stock, to make them owners and to help them think like owners.  He was always thinking about things like that and focused on the part they would play in the customer experience and thought this would inspire and motivate them. It did.”


“Steve told me he wanted us to create an oasis in the middle of a dry, arid desert.” Don Brinkerhoff, CEO of Lifescapes International


 

The Audience

On the morning of the opening, columnist John L. Smith, fired a warning shot in the Las Vegas Review-Journal, predicting a “hangover” for Las Vegas. He said that, like Jonah, Wynn was about to be consumed by a whale (of debt). Not since IBM’s Thomas Watson claimed that there would be a world market for maybe five computers has anyone been so wide of the mark. Smith was wrong. Biblically so.

“We were scared as all hell,” reminisced Schorr. “We were paranoid that people wouldn’t come. But once the doors opened and seeing the mad rush, all our fears were eased,” added Butler.

“I remember as if it were yesterday,” said Hornbuckle. “The barriers on the street were removed and immediately a crowd of 25,000 people began running up both sides of the drive through the front door—I had to jump over the front desk!”

“Although we were overrun, everyone was calm,” remembered Nathan. “That proved the success of our training strategy.”

It was as if the Lord himself had one eye on Steve Wynn’s Mirage when, after the 48-hour international media extravaganza began to slow, 75-year old Elmer Sherwin beat the 10 million-to-1 odds and won the $4.6 million Megabucks jackpot, the largest slot payout in Las Vegas history. The media found a good news story for America to talk about as families sat down for Thanksgiving dinner. Millions of Vegas vacations were booked that weekend. (It is a curious footnote to the story, that Sherwin won a second Megabucks jackpot at age 91, two years before he died. His second win was for more than $20 million.)

Six months before The Mirage opened, Kevin Costner released the movie Field of Dreams, featuring the prophetic strapline, “If you build it, they will come.” The catalyst was in place; the Las Vegas boom was about to begin.

“One of the key challenges to get people to The Mirage was to be able to get them to Las Vegas, and then when they were here, to get them to stay longer,” recalled Shier. The property was so successful it transformed the entire city’s business model, which had relied heavily on southern California’s drive market. To a scale never done before, The Mirage team forged partnerships with airlines, tour groups and travel agencies and with the international attention generated, this proved symbiotic and highly successful.

In 1988, 17.2 million people visited Las Vegas, producing $3.1 billion of gaming revenue. By 1990, the first full year of The Mirage, nearly 21 million people generated $4.1 billion of gaming revenue. Never in the history of Las Vegas had there been so much growth so quickly. The effects over the next decade were astonishing.

“The Mirage marked the transition between yesterday and tomorrow. It was the most intense time in the history of Las Vegas. Shortly after we saw the beginning of $1 billion investments in Nevada,” said O’Reilly.

The success of The Mirage was global. It began the casino boom and rebirth of Las Vegas, with 13 megaresorts opening in the city over the following decade, plus numerous expansions and additions, including new towers and The Forum Shops at Caesars. The Mirage team opened Treasure Island in 1993. Beau Rivage, Mirage Resorts’ property in Biloxi, turned 20 in 2019 and despite well publicized initial trauma, remains one of the highest performing non-tribal properties in the USA today. In 1988, Las Vegas had just over 61,000 hotel rooms; by 2000 this had doubled to 125,000.

Rivals had to step up and challenge The Mirage’s success, initially by imitating and then innovating easily identified aspects. The Mirage was purportedly themed, so The Strip went through a phase of themed properties rising from the desert, disregarding Thomas’ nuance. The Mirage had lush landscaping and an iconic pool, many new properties featured lush landscaping and vast pool areas. The Mirage had Siegfried and Roy, Las Vegas saw magicians galore, some staying the distance, others disappearing!

As everyone improved their offering to compete with The Mirage, the quality and range of the amenities in the city was systemically elevated, turning Las Vegas into a destination location which would lead it to become truly the entertainment capital of the world.

As one of the central figures in the past 40 years of the state, Sig Rogich was in a unique position to observe the changes, “I think of Steve Wynn as the Henry Ford or Thomas Edison of gaming, really inventive in his approach to casino operations and never afraid to think outside the box when it came to streamlining, improving and modernizing hospitality.  Steve had the luxury of his business being his favorite hobby and he enjoyed being involved at every level of creating and refining the customer experience. Because he loved what he did, work was fun for him, and that was apparent to all who had the opportunity to be around him.”

The impact of The Mirage was not just in the U.S., says Bo Bernhard, executive director of the UNLV International Gaming Institute. “If anything, the Mirage is under-appreciated in global gaming history. Without the Mirage, Singapore never happens. Singapore is a jurisdiction where it is technically illegal to sell chewing gum and it would have been unimaginable that a place that bans so much would have allowed the gambling halls of my youth into its pristine backyard. The Mirage, though, that was something that folks (and governments) could get behind. The Mirage reimagined the genre, in a way that has since inspired jurisdictions from Tokyo to Boston to allow the integrated casino resort into its urban cores.”

Nothing challenged the primacy of The Mirage until Mirage Resorts’ own Bellagio, arguably the pinnacle in Las Vegas resort development, which reinterpreted the music of The Mirage, for an elevated audience. “With The Mirage, all we could see were the mistakes,” said Schorr.” We made them better for The Bellagio and then fixed those mistakes for The Wynn, but without The Mirage, there could have been no Bellagio.” The Mirage tested the theory that Las Vegas could be a leading resort destination for the world’s elite—The Bellagio proved it on scale.

In 2000, MGM Grand Inc. acquired Mirage Resorts for $6.4 billion to form MGM Mirage. Today, The Mirage is part of the MGM Resorts International portfolio. Much has changed.

Nik Rytterstrom, today’s president of The Mirage first worked at the property 20 years ago and has spent the past 20 years with MGM Resorts. The brand has stood the test of time. We have many employees here who opened The Mirage and many guests that have been loyal over the decades,” he says. “As they have matured so has the property, reinventing to meet their needs, but we are still true to the original vision of a high-amenity tropical escape.”

Renovations have seen many of the original features removed, with the tropical inspiration downplayed. The original bold coloring is only seen in unrenovated parts at the back of house and the sedate palate throughout the property is aligned with the expectations of convention guests that have become the staple. White tigers are still sold in the gift shop, with dolphins and other of the resort’s legacy features. Entertainment is led by the Beatles’ inspired Love, part of the Cirque du Soleil portfolio, and supported by ventriloquist Terry Fator. The rain forest has been trimmed and is without some of the otherworldly tree designs that once dominated the atrium. Although the volcano still erupts, it is with less frequency. Today’s version of The Mirage struggles for identity in a post-millennium Las Vegas.


“Steve didn’t want developer-speak. Whatever Donald Trump did, he wanted the opposite.”Alan Feldman, Former Public and Media Relations Director at Mirage


Ovation

Wynn was the Leonard Bernstein of Las Vegas; a rare combination of master composer and legendary conductor.

Throughout the history of the industry there are only a handful of true innovators that have been able to see their visions realized. Of that select group, only a couple have been able to translate those dreams into successful operating businesses.

Jay Sarno and Stan Mallin spent a comparatively short period operating Caesars Palace and Circus Circus, before the Perlmans at Caesars and the Bills (Pennington and Bennett) at Circus assumed management to successful maturity.

When Bill Bennett, one of the greatest operators in Las Vegas, developed his Egypt-inspired Luxor in response to The Mirage, the perfect balance of vision and operational nous was absent, and the property was beset with problems that took years to stabilize.

Kerkorian was a visionary, but his portfolio was the product of acquisition and aspects of architecture, programming and operations were devolved to a team of highly capable managers including Fred Benninger and Terri Lanni, then Hornbuckle and Baldwin from The Mirage.

Sheldon Adelson, with an entrepreneurial drive even bolder than Wynn’s, outsourced much of his operations to third parties, with the bottom-line driving decisions. Jackie Gaughan stayed Downtown and despite success, built nothing to Wynn’s scale. Las Vegas innovators, The Boyd and Fertitta families have stayed mainly off-Strip. Even MGM’s Aria, with a budget many times of that of The Mirage and led by Mirage alumni, required post-opening adjustments to both the design and offering before it reached optimal performance.

In the 1980s, Donald Trump was seen as a legitimate rival to Wynn, but with 30 years of observation, Wynn’s depth and sophistication of thought has rendered that argument moot.

“One of the foundational characteristics of Steve and the company was to respect the past, but to find a new way to present it for a new era,” said Feldman, who closed his career at MGM earlier this year.

Speaking at G2E in 2014, Wynn said, “When we built The Mirage, we spent $620 million in a city that had a $200 million investment average. Caesars Palace had a glass ceiling, they had won $400 million, no one had done over $300 million, except Caesars. When we built The Mirage, we built things without a cash register. The Mirage won over $500 million, the first casino in the history of Nevada. What was interesting about that was that The Mirage had $600 million in non-gaming revenue and at no time at The Mirage did its gaming revenue exceed its non-gaming revenue.”

“Every day, I think about some experience, some design at The Mirage,” says Steelman. “Some of our clients would like magic to happen to their project just like at The Mirage. People today still refer to the project as a great standard to study and many are envious of how little it cost. The Mirage was the most incredible financial bargain in the worlds of business, building and Las Vegas.”

Wynn and many of those involved in The Mirage story forged highly successful careers in the resulting casino boom. Joel Bergman left Mirage in 1993, designing the new towers for Caesars Palace and Paris, opposite Wynn’s Bellagio. He died in 2016. By the time Henry Conversano passed in 2018, he had designed for Harrah, Wynn, Kerzner and Trump, creating the feel for hundreds of projects around the world. Paul Steelman has become a global architectural leader, building resorts in multiple continents, including leading the development of Macau as the dominant gaming destination in the world. DeRuyter Butler and Roger Thomas continued to define and refine their work and today their atheistic is considered the pinnacle of luxury hospitality design, experienced exclusively at Wynn properties.

In O’Reilly’s opinion, “The core executives of Caesars Palace and The Mirage at that time took the industry leadership to a new level.” Today, these business leaders are revered within the industry and those still working are highly coveted executives.”

Nathan reflected, “For all of us it was a career-maker. We proved that with creativity, attention to detail, strategy and planning, we could accomplish anything.”

A generation since its opening, we can now fully evaluate The Mirage. Those involved with the opening were fortunate to be involved in such a monumental project, as part of a hand-picked team, working under a virtuoso at his peak.

Steve Wynn has a unique a mastery of customer psychology. He was able to build a leadership team and communicate his insights to create a unique physical environment, which paired with the power of employees, could connect with customers on an emotional as well as functional level, leading to a heightened sense of belonging.

To be in a town like Las Vegas in the 1980s and have the vision for something so truly grandiose yet intricate, so sophisticated yet accessible, so aspirational yet so universal, would have been a desert delusion to anyone else, but like a conductor with his back turned to the audience, Wynn could see it all.

This is the timeless legacy of The Mirage. It must not be forgotten.

Special thanks to MGM Resorts, Wynn Resorts, Lifescapes International, LVCVA, Steelman and Partners, UNLV Special Collections and the Executives that gave time to participate in this essay.

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Oliver Lovat FRICS is visiting faculty at Cass Business School in London. As CEO of Denstone, he advises customer-facing, asset-backed businesses on strategic competitive advantage and maximizing value. For a full version of this research, contact him at oliver@denstone-re.com.

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