Fontainebleau Loses Three Key Execs Since Opening, What It All Means
Two top executives at the newly-opened Fontainebleau have resigned. Fontainebleau Las Vegas opened Dec. 13, 2023.
The resignations: Colleen Birch, the resort’s Chief Operating Officer, and Shane Smith, the Chief Marketing Officer. In December 2023, Michael Clifford, Senior V.P. of Casino Operations, was reportedly fired.
The news, to put it mildly, caused heads to explode. Exactly WTF is going on at Fontainebleau (pronounced “fountain-blue”)? We’ve got all the inside scoop you won’t find anywhere else. Let’s go.
The fact Birch and Smith resigned at the same time is telling, and reflects some of the drama going on at Fontainebleau.
It’s worth noting Fontainebleau’s former president, Cliff Atkinson, parted ways with the resort before it even opened. Fontainebleau didn’t announce Atkinson’s departure, they announced a new president. It was as awkward as it sounds.
To clarify the clarification: While not reported elsewhere yet, we’ve confirmed Cliff Atkinson is no longer president of Fontainebleau. Seemed a really nice guy with a strong vision for the resort. In industry jargon: Sucks, bigtime. https://t.co/EMzJPgHYoc
— Vital Vegas (@VitalVegas) January 10, 2023
The trail of blood doesn’t stop there.
Dan Cherry, Fontainebleau’s original Sr. V.P. of Casino Operations was out nearly a year before the resort opened.
Hearing Dan Cherry, Sr. V.P. of Casino Operations at Fontainebleau, is out. He was a longtime exec. with Penn National Gaming. Nothing to see here.
— Vital Vegas (@VitalVegas) January 12, 2023
Fontainebleau’s original CFO was out in mid-July of 2023, again, before the resort even opened.
Per Fontainebleau, “We can confirm that Stephen Singer is no longer with Fontainebleau Las Vegas. We thank him for his time and contributions to the company, and we wish him well in the future.” https://t.co/oIAeeIWTke
— Vital Vegas (@VitalVegas) July 26, 2023
Marc Guarino, the resort’s Chief Technology Officer, with a quarter century of casino and hospitality IT, was also let go before Fontainebleau opened.
Dianna Balabon was Acting CMO for a minute, also out prior to Fontainebleau opening.
All these departures are indicative of copious head-butting at Fontainebleau, serious and irreconcilable differences of opinion and strategy. For starters.
It’s complicated, but Fontainebleau is having a moment, and nobody’s really talking about what’s really going on. We’ve got you. We have spoken with Fontainebleau staffers and longtime veterans of the casino industry. Everyone agrees Fontainebleau is in serious trouble, and these executive departures are just the tip of the iceberg.
The challenges Fontainebleau faces aren’t much of a surprise. We included Fontainebleau on our list of potential bankruptcies back in August of 2023.
Prior to the announcement of the most recent executive resignations, we laid out a timeline for how things are likely to unfold at Fontainebleau. Schedule subject to change without notice, as they say.
Rumors about Fontainebleau being for sale are unfounded. That’s not how this works. Here’s the timeline: 2024, major reduction in staff (over/under is 20%); 2025, replacement of executive team; 2026, asset write-downs (lenders take a haircut); 2027/28 sale.
— Vital Vegas (@VitalVegas) January 7, 2024
Lest you forget, Fontainebleau was nearly sued by Wynn Las Vegas for its aggressive poaching of talent.
So, what’s up with Fontainebleau? The obvious things aren’t as interesting as the behind-the-scenes clusterfuckery, of course.
The obvious problems: 1) Location (no foot traffic), 2) no casino database, 3) no hotel database or partner. That’s a trifecta of doom in the casino resort business. Fun fact: Our band name in high school was Trifecta of Doom.
What’s making a difficult situation impossible is personalities.
One can debate whether or not the excommunicado executives were suited to their jobs. Some believe they may have been out of their depth for the specific positions they were offered, but there’s no arguing all are longtime and well-respected hospitality and gaming executives.
Given that experience, why the tumult? Pure and simple, egos. And unrealistic expectations. But mostly that first thing.
From day one, the Fontainebleau project has exuded over-confidence, especially in the appeal of the Fontainebleau brand.
Internally, that arrogance has led to ongoing friction between owners and executives. Basically, those veteran executives have been thwarted by higher-ups who won’t allow them to do what they’re best at, and what they were hired to do.
Fontainebleau’s owners are extraordinarily wealthy and successful, including Fontainebleau Development CEO Jeffrey Soffer. A lesser-known player in all this is Fontainebleau Development’s Chief Brand and Design Officer, Peter Arnell.
Multiple sources familiar with the situation relay a lot of the chaos at Fontainebleau stems from these strong personalities, very much used to getting their way and not particularly open to consensus (unless it’s theirs). Arnell is rumored to have burned bridges with dozens of vendors during Fontainebleau’s design and construction process.
Add in an over-reliance upon outside consultants, and complete inexperience in operating a casino resort, and you have certified dumpster fire.
Did we mention Fontainebleau is absolutely incredible? Why do we raise this now? Because everything we’re talking about is inside baseball and has virtually no impact on your experience at Fontainebleau.
The sheer existence of Fontainebleau is a miracle.
The structure sat idle for nearly 20 years, an eyesore and the butt of many, many jokes. Most of them ours.
Today, Fontainebleau is among the most beautiful resorts on the Las Vegas Strip or in the world.
That’s not the issue. The issue is viability.
The only way for Fontainebleau to avoid disaster, if there is a way, is to let qualified experts do what they do best.
Egos must be set aside, although, that’s complex when billions of dollars are on the line. Koch Real Estate Investments is the other variable in this unfolding saga, and we’re fairly sure there are daily freak-outs about the resort’s disappointing revenue results (made even more disappointing when compared to wildly unrealistic expectations), along with pressure from Koch to fix what’s broken.
Egos are tough to rein in, mostly because nobody thinks they have a big ego.
Fontainebleau got a lot of media attention when it opened. The thing is, it wasn’t really a casino resort opening. It was a birthday party, for (wait for it) Fontainebleau Development CEO Jeffrey Soffer.
Do you think any casino would ever open on the 13th if the people involved knew about casinos at all? You might as well invite your guests to step on cracks and walk under ladders or ask Asian gamblers to enter through the mouth of a lion. (Technically, it was under the chin of a lion, but let’s not get distracted.)
People who have no casino experience shouldn’t be dictating to those who do.
They also probably shouldn’t be involved in marketing or advertising, at all. The marketing for Fontainebleau has been absolutely terrible. Poodles and bowties and models having cake fights and using jackhammers and Paul Anka singing a theme song?
— Vital Vegas (@VitalVegas) December 13, 2023
For a year, we’ve been screaming about the resort’s social marketing. It was a huge missed opportunity to establish the brand in Las Vegas, to find an approachable tone, to share amenities and provide value. Fontainebleau did zero of that.
Fontainebleau did a “big reveal.” Big reveals create about 72 hours of publicity. Monumental miscalculation.
Presidents and COOs and CMOs and Senior V.P.s of Casino Operations aren’t just any executives at casino resorts. They are the pillars upon which businesses are built.
We walked Fontainebleau with Colleen Birch prior to the opening of Fontainebleau. We have never seen a casino executive so genuinely excited about a project. Not the pretend kind of excitement, the real kind. She knew literally every employee. By name. Dozens of them. And those employees lit up when they saw her. One can question whether she was suited for the COO gig, but no one can question whether she was an invaluable asset to Fontainebleau. A business needs heart, and respected leaders, to provide a vision and cohesion and loyalty.
Lots of talented folks took a gamble going to Fontainebleau, at various levels of the company. Many followed Atkinson and Birch because of existing relationships and loyalties.
We’ve been told by several people Shane Smith is “brilliant.” Further confirmation his contribution wasn’t valued, and he was stymied in his efforts to exploit his talents.
Firings and resignations don’t build confidence, they erode it.
Sadly, there’s more finger-pointing still to come.
Two top executives resigning at the same time isn’t just news, it’s a message.
Everything about Fontainebleau has been a gamble, including taking an executive position there.
Fontainebleau faces a number of challenges, some undoubtedly insurmountable. Even if Fontainebleau gets its marketing act together, it’s going to take a year or two to make any inroads into making the public aware it exists in Las Vegas.
Conventions have yet to rebound following the pandemic, ditto the return of Asian whales. Resorts World is gorgeous, too, but has yet to meet even its modest projections. Las Vegas visitation is flat, and Fontainebleau just brought another 3,400 rooms (or will) into the market where there’s already more supply than demand.
Despite all these headwinds, the biggest obstacles for Fontainebleau appear to be of its own making. It’s a people problem. It’s a toxic culture at the top, and it shows.
Las Vegas isn’t Miami or New York. Dictatorships have worked in Las Vegas before, but rarely, and nobody can be another Steve Wynn (thankfully).
Running a casino is a lot like dating. If you find yourself breaking up with people again and again, at some point, you have to come to the realization it’s not them, it’s you. You’re the common denominator. Not that we know anything about this, personally, of course. It’s all just to illustrate our point, and that’s the story we’re sticking to.
We love Fontainebleau and think you’ll love it, too. There are some kinks still being worked out, but such things take time.
There are always personnel shake-ups when new casinos open. This isn’t that.
The bottom line: Casinos aren’t just buildings, they’re people. Relationships are everything, and require care and feeding.
Everyone’s rooting for you, Fontainebleau. Get your shit together.