It’s almost hidden, tucked down a long hallway on the third floor of the new Cosmopolitan of Las Vegas. The small pizza place without a name or storefront serves the best New York-style pizza in Las Vegas, but it isn’t listed in any of the resort’s marketing materials or promotions.

The unexpected delight is part of the Cosmopolitan’s charm and CEO John Unwin’s strategy of appealing to the “curious class” of travelers, who crave adventure, exploration and discovery. He’s running the nearly 3,000-room resort like a boutique hotel: “In spirit, not scale,” he says. “Polish, without pretense.”

The different approach appears to be working for lender-turned-owner Deutsche Bank, which foreclosed after original developer Ian Bruce Eichner defaulted in 2008. The German bank recently said in its annual report that it expected the $3.9-billion casino-resort to be profitable, despite an overall market still teetering between recession and recovery.

The Cosmopolitan may be the last of a two-decade run of billion-dollar developments on the Strip, but if Unwin is right, it could be the beginning of the next wave.

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Curious Approach
Deutsche Bank faced an even steeper obstacle than the worst recession since the Great Depression when it revamped the half-finished project. The new owner was hoping to succeed with an independent property on a Strip lined with goliaths like Caesars, MGM, Sands and Wynn. Those casino operators all had what the Cosmopolitan didn’t: systems and practices in place, staff, experience and most importantly, customer databases with millions of names to market to.

The unlikely owner didn’t look far to find a solution when they hired Unwin in 2009. He came from just down the street, but he brought an outsider’s perspective.

“Las Vegas for the last 20 years took a really good idea like the Mirage and tried to make it a little better, refine it and have another one of something that worked really well here,” says Unwin, who had spent the previous five years at Caesars Palace after a long career in the more traditional hotel industry, with stints at Fairmont, Westin, Marriott and not surprisingly, working for boutique innovator Ian Schrager.

“It seemed like there was a really obvious opportunity for someone from outside Las Vegas to introduce something new that resonates with travelers around the world, not just here,” Unwin says.

Unwin and his team used 32 different marketing and scientific studies to define the niche he wanted to fill. The curious class is a psychographic, not defined by age, but with people who “self identify as broad minded, creative and they like foreign food, creative hotel concepts and exploration,” he says of the 59 million Americans who fit the profile.

A Different Design
From the moment you walk into the Cosmopolitan, it looks and feels different. When guests enter the lobby, they see stunning and massive video art columns, but not the casino. It’s not forgotten, but it’s not the focal point, either.

The Cosmopolitan opened on Dec. 15, with 2,000 rooms (the remaining 995 will open this summer), 100,000 square feet of casino gaming, 150,000 square feet of meeting space, a 43,000-square-foot spa, three pools and an eclectic assortment of first-to-Las Vegas boutique shops and restaurants featuring world-renowned chefs—and the unnamed pizza place.

The resort is built vertically with two 50-story towers on only 8.7 acres just yards from Las Vegas Blvd. The Cosmopolitan doesn’t resemble its expansive neighbors, CityCenter on 67 acres to the south and Bellagio on 120 acres to the north, both set well back from the Strip.

“We were forced to embrace the Strip,” says Unwin, adding that 60,000 to 90,000 people on average pass daily within yards of the Cosmopolitan’s Strip entrance. “Solving the design and architectural challenges showed there’s a new and different way of doing things.”

Guests can easily navigate from the lobby to the casino and then up elevators or escalators to the second, third and fourth floors with the meeting space, retail and restaurant offerings.

With everything stacked, guests don’t need a map and 20 minutes to get from Point A to Point B. That, says industry consultant and group marketing specialist David Brudney, is a huge reason why meeting planners and smaller groups love the Cosmopolitan.

In a city of mostly locked and bolted windows, 2,287 of the Cosmopolitan’s rooms feature sliding glass doors opening to terraces. The 708 City Rooms are 460 square feet, but the rest are at least 730 square feet and 10 bungalows have 2,445 square feet.

“You can step outside and embrace Las Vegas and the Strip in a way you can’t anywhere else,” says Unwin. “It’s meant to feel like your fantasy high-rise apartment in a big city like New York or Tokyo.”

The Cosmopolitan was meant to be just that. The project broke ground in 2005 as a condo-hotel, but those plans were scrapped after the housing market crashed. (The original developer and Deutsche Bank have since faced class-action lawsuits from disgruntled condo buyers and some litigation remains pending.)

Drawing a Crowd
Although the big things like the lobby and guestrooms garner most of the attention, it’s the little things that add up to the Cosmopolitan’s boutique feel. It’s the pizza shop, the three-story Chandelier Bar with a middle level actually inside the massive chandelier, the nightly live music on the casino floor and quirky art elements like nine-foot tall stiletto heels and randomly placed ceramic dog statues in the prefunction area of the meeting space.

It’s the six Art-o-mat machines, made from old cigarette vending machines that now dispense original artwork for $5 from aspiring artists. It’s the neighborhood feel of the P3 Commons, the construction name that stuck for the third floor space with the acclaimed restaurants circling an open area with comfortable seats and a pool table, meant for nothing more than hanging out.

“To create this palette for our guests is like throwing a good dinner party,” Unwin says of a lesson learned from one of his former bosses. “You can’t have everyone be the same. One of the biggest things I learned was from watching Schrager do parties. He would literally work for hours on the guest list. That’s the idea here.”

Competitors and consumers are taking notice, too.

“They’ve done a real good job positioning the property from a marketing standpoint,” says rival Mike Leven, the president and chief operating officer of Las Vegas Sands Corp., which owns the Venetian and Palazzo. “They’re growing a new piece of the Las Vegas market, the 25- to 35-year-old who has some money.”

Jeremy Aguero, the principal analyst with Applied Analysis, a Las Vegas research and consulting firm, says it’s only anecdotal, but also surprising that consumers are universally praising it. “Convention travelers, leisure travelers … they all really like it: the layout, functionality, amenities, even more so than other properties,” he says.

Unwin turned to his hotel roots to overcome the initial challenge of finding those customers without a database of names to draw from. The Cosmopolitan partnered with hotel heavyweight Marriott International last August and joined its new Autograph Collection of independent and mostly boutique properties.

The alliance allows the resort to build its own brand—without the “big red M,” Unwin says—while benefitting from Marriott’s distribution to 32 million loyalty program members and the exposure from being on the seventh largest retail website in the world.

The Cosmopolitan’s own loyalty program, Identity, offers a slight twist on the traditional way of rewarding casino customers. It recognizes total wallet spend, so customers earn specials and comps based on their retail, restaurant, spa and room charges, as well as gaming.

The lost opportunity, Unwin says, is the customer who has been overlooked for years: The person who comes to Las Vegas and gambles a little, but stays several nights and spends money at the shops and restaurants.

Paying Off
The Cosmopolitan has exceeded expectations “by a pretty significant amount” in the first four months of business, Unwin says. More than one-third of the rooms booked for January, February and March came from group and convention business, the ratio he expected for the property when it matured. He says in January the property had almost reached market occupancy levels.

Shannon Okada, vice president and associate director of gaming services for the Las Vegas office of HVS Consulting and Valuation, says the Cosmopolitan has maintained its premium rates better than some of its competitors and “isn’t dragging things down.” Not charging a resort fee like most of its competitors, or giving up inventory to Expedia and other online travel agents like all its competitors, surely helps.

Whether Unwin’s unique approach eventually pays off for Deutsche Bank remains to be seen. Rumors have swirled from the start about potential suitors. In a January report on the Las Vegas market, Okada wrote Deutsche Bank will start considering offers from gaming operators looking for real estate on the Strip, like Isle of Capri Casinos, Penn National Gaming or Pinnacle Entertainment.

“I think if the right deal came up they’d have moved it already,” says Aguero. “All signs suggest they are waiting for the market to improve, but if the right deal for shareholders came now, they’d take it tomorrow.”

Most of the talk Aguero has heard centers around international buyers and Okada says the Cosmopolitan could make the ultimate trophy property for someone. Though David Schwartz, director for the Center of Gaming Research at the University of Nevada Las Vegas, says gaming regulations are a barrier to entry and local operators would have the advantage of having a gaming license.

Unwin doesn’t worry about the rumors, his focus continues to be on building the Cosmopolitan into a one-of-a-kind destination.

“A lot have said this would be the last of its kind,” he says, “but the Cosmopolitan is different. This is the beginning of the next wave of development here.”