Last week, Caesars Palace opened the doors to the largest and most elaborate buffet in Sin City. They invested $17 million in an operation that features 500 menu selections, many of which are prepared before your eyes. Dinner costs $40. The room is supported by nine separate kitchens, and can seat 600 people.
Las Vegas is certainly no stranger to excess, and in recent years the glitter has been trickling down the economic scale. Once the refuge of penny-pinching tourists, hotel buffets have become more and more elaborate. Caesars new Bacchanal Buffet is nowhere near the top of the pyramid. Bally’s Sterling Brunch, offered on Sundays, costs $85 per person and includes real Champagne, Maine lobsters and caviar (presumably domestic). The Village Seafood Buffet at the Rio is $50, but on my last visit I was underwhelmed by the quality of the shellfish. The Bellagio Buffet is probably the classiest, and a relative bargain ($30-37 depending on the night of the week).
You may think the hotels are making a fortune on these concepts, but you’d be wrong. If you look at the list of the 100 highest-grossing restaurants in America, you’ll see that roughly half are steakhouses, where a la carte charges for anything and everything can easily drive the average check to $75. The #1 eatery grossed nearly $60 million (the Tao Restaurant and Nightclub in Vegas), but the other 99 ranged from $9-29 million. There wasn’t a single buffet on the list.
When it comes down to the issue of gross vs. net profits, things get scary. According to a study sponsored by the National Restaurant Association and conducted by Deloitte and Touche, net profits decline as the average check rises. In full-service restaurants with average tabs of more than $25 per person, the profit margin is less than 2%. Limited-service establishments (including buffets) can reach as high as 6%, but it’s still a long road toward making back that $17 million investment.
Of course, the real focus of the Bacchanal Buffet isn’t making money. It probably has more to do with attracting people to the hotel, and keeping them there once they arrive. For many gamblers, $40 doesn’t buy one hand of blackjack. The real advantage of a buffet is that it is a less time-consuming experience than a formal restaurant, and gets the players back to the tables more quickly.
Mark Spivak is the author of Iconic Spirits: An Intoxicating History, which will be published in November by Lyons Press; for more information, go to www.iconicspirits.net.