Walker Webinar: Hospitality, Las Vegas and South Florida—A Talk with Fontainebleau Development’s Jeffrey Soffer

The hospitality sector is bifurcated. While the broader U.S. hotel industry is experiencing weak demand from both domestic and international markets, the high-end segment is performing quite well.

Walker & Dunlop CEO and Chairman Willy Walker and Fontainebleau Development’s CEO Jeffrey Soffer compared notes during the Dec. 17 Walker Webcast.

The 40-minute event touched on many topics, including the decades-long Fontainebleau Las Vegas development (20 years, from land purchase to a late 2023 opening), Soffer’s investment in the Fontainebleau Miami Beach ($800 million, so far, to upgrade it) and Soffer’s friendship with former NFL quarterback Tom Brady.

The pair also tackled other issues.

The Las Vegas Overview

Walker asked about revenue streams in a high-end hotel like Fontainebleau Las Vegas. In response, Soffer shared a bit of history, explaining that many years ago, 60% of hospitality revenue came from gaming. These days, the total is 25%.

He also explained that the metro’s population grew from 700,000 in the 1990s to 2.8 million today. Furthermore, corporations have taken a liking to Las Vegas. “We have the ability to do things that other cities can’t, at a luxury level,” Soffer said. “The quality of the product we’re delivering is probably the best of that out there.”

Returning to the revenue question, Soffer indicated that the gaming take might be higher, given the Fontainebleau’s appeal to high-end visitors. Large events also generate cash flow, as do the restaurants. However, “the heart of it is the average person,” Soffer said.

To attract and keep that “average person” requires exceptional service and loyalty. Soffer said that operating as a private corporation means a lack of corporate bureaucracy and the ability to make quick decisions that positively impact the customer. The customer then goes back and tells their friends about the Fontainebleau Las Vegas.

Furthermore, the host is important, especially at luxury facilities. “The host is important for getting clients here, giving them the service and making sure they’re happy,” Soffer explained.

In terms of overall hospitality performance, Soffer said that high-end resorts continue to do well. “You read all the stuff about Las Vegas, and how it’s down,” he added. “That’s down on the lower end.”

The South Florida Situation

Shifting to the Sunshine State, Soffer noted that 2025 in South Florida was off, with summer not as strong as in previous years. The regional economy is also somewhat sluggish. However, “I think next summer will be much stronger because of the World Cup,” he said. “The group bookings continue to grow, which is important to us.”

Meanwhile, the high-end condo market is continuing to perform well, though Soffer pointed out that location was an impact. “In secondary areas, where they’re building and trying to sell for $1,500 to $2,000 a foot, it’s a little more sluggish,” he said.

Walker asked about the impact of the Starwood Capital Group’s and Citadel’s relocation on the area. Soffer acknowledged that such corporate move-ins continue to help by “bringing more jobs, better jobs and bigger earners.”

Then the topic shifted to the South Florida environment, and Walker asked his guest if he was concerned about floods and hurricanes. Soffer explained that seawalls were raised in South Florida, and pumps were installed to manage excess water. “My gut tells me they’ll continue mitigating the risk,” he added. “There are pros and cons of being in South Florida.”

On the insurance front, costs have decreased, but companies operating in the area typically have their own coverage.  Soffer pointed out.

The Outlook

Soffer’s view on how hospitality will evolve over the next five years boiled down to one word: Efficiencies. “AI is going to change a lot of how we operate these hotels,” he noted, technological innovations might start there.

On-demand replays of the December 17 Walker Webcast are available through the Walker Webcast channels on YouTube, Spotify and Apple. Subscribe to get invites, replays and articles for new Walker Webcast episodes every week.

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