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Industry watchers say KAOS closing shows customers looking for unique nightclub experience

Posted at 11:42 PM, Nov 07, 2019
and last updated 2019-11-08 08:25:35-05

LAS VEGAS (KTNV) — KAOS touted itself as the next big thing in Las Vegas nightlife, but the club shut down less than a year after a star-studded opening in April.

So what does that say about the future of nightclubs in Las Vegas?

Industry watchers say the clubs of the future have to offer something different than what’s already out there to stay in business.

RELATED: Employee files class-action lawsuit against KAOS

KAOS was impressive in a lot of ways. It was spacious with multiple levels, plenty of pools, a massive 60-foot bronze sculpture and the largest LED wall in Las Vegas. But it turned out to be a $690 million fail.

"It says a lot when Derek Stevens is opening Circa without a nightclub. It will have a nightclub environment but opening a new resort without a nightclub says a lot,” said Marc Meltzer, a freelance writer who covers Las Vegas nightlife and gaming.

It is no secret resorts are working hard to draw in the millennial customer.

"For some reason millennials are thought of as a very special niche,” said Meltzer. ”Or a very different generation. And they are really not that much different than my generation, Generation X.”

And that means, like every other generation of young people before them, they have limited funds.

On earnings calls, Meltzer says executives specifically mentioned KAOS club goers were not spending money at the Palms' other offerings, like the restaurants or its casino. While KAOS touted big name performers like Marshmello and Cardi B, once people paid for those acts and drinks, they were tapped out.

RELATED: Circa hotel-casino to join downtown Las Vegas skyline in 2020

"They don’t have the discretionary income to spend on x, y, z,“ said Meltzer. “They have money to spend for x."

Las Vegas Advisor publisher Anthony Curtis said KAOS was a hard sell from the get-go; a megaclub like the ones on The Strip -- just not on The Strip.

“I think they came a little late to the party,” Curtis said.

While he says pricing was in line with other similar established clubs, it just wasn't special enough to regularly draw a crowd.

"It's just not as convenient,” he said. “And I think the customers they may want to pull there are busy partying on The Strip."

He and Meltzer agree, the scene is shifting to smaller, more intimate venues. Or even supper clubs that offer more than pools, a DJ and a mega dance floor.

"There's On The Record at Park MGM,“ Meltzer said. “They are doing a little bit of a different thing. They have a speakeasy vibe. They have karaoke."

So, what’s the next step? Is it more of the same? Or something new? And it’s looking like it’s going to be something new,” Curtis said.