Sarah Feldberg
About two months ago, some friends and I were planning a night out in San Francisco; dinner and a comedy show. Tickets were purchased and reservations booked for Tosca Cafe, a popular Italian joint from New York restaurateur Ken Friedman and chef April Bloomfield.
Then on Dec. 12, the New York Times published a bombshell investigation into Friedman, owner of the Spotted Pig in the city's West Village, alleging that he had subjected female staff to a pattern of sexual harassment that included public groping, requests for sex and retaliation against those who complained.
Friedman announced a leave of absence from his company and apologized in a statement. We canceled our dinner reservation and opted for Chinese food instead.
I was reminded of that decision on Jan. 26, when the Wall Street Journal published its own investigation into Wynn Resorts chairman and CEO Steve Wynn. According to the WSJ story, Wynn allegedly exposed himself to female employees during spa treatments and demanded sex acts from some staff members, including one manicurist who he later settled with for $7.5 million.
Though Wynn denies the accusations, the fallout has been fast and furious. Wynn Resorts stock tumbled more than 10% the Friday after the story was published, continuing to drop the following Monday before rebounding slightly. Wynn resigned as finance chair for the Republican National Committee, and Nevada politicians, many of whom have taken contributions from the casino mogul, have cautiously condemned the allegations.
The Nevada Gaming Control Board is opening an investigation into the sexual misconduct claims, as is the Massachusetts Gaming Commission, in light of Wynn Boston Harbor, a $2.4 billion casino resort expected to open just north of that city, in Everett, in 2019. Meanwhile, analysts have suggested that Wynn Resorts could be purchased by competitors like the Las Vegas Sands Corp. or Hong Kong-based Galaxy Entertainment if Wynn, who owns almost 12% of the company he founded, is forced out. [Editor's note: Steve Wynn resigned as chairman and CEO of Wynn Resorts on Feb. 6.]
But lost in stories of stock quotes and salivating competitors are Wynn's actual customers, the people who sleep in his hotel rooms, gamble at his craps tables and dance in his clubs. More so than many CEOs, Wynn's identity is infused in his resorts: his name splayed across the building, his signature serving as the company logo.
On Twitter, some former guests have vowed to forsake the properties.
"Just canceled our stay at Wynn. Never going back," tweeted @BarryKennard1, adding that he'd stayed at Wynn or Encore every fall for eight years.
Others voiced support for the resorts, arguing the actions of their founder don't reflect on the properties overall or that the CEO deserves due process before being condemned.
A company spokeswoman told the Las Vegas Review-Journal that the hotels haven't received more cancellations than normal, but with so much recent negative publicity, guests booking upcoming trips to Las Vegas may simply choose to stay somewhere else.
The same goes for meetings planners bringing groups.
"Meeting professionals and the organizations they work for typically choose to do business with and hold their events at properties and with brands that meet their business needs but also their values," said Karen Kotowski, president and CEO of the Events Industry Council via email. "When there are negative stories surrounding a property, this could influence those choices. However, it also depends on whether this issue is systemic to the organization or the actions of an individual. If actions are of an individual, it depends on how the leadership within the property handles the situation."
With plans in the works for two new Wynn Resorts hotel towers on the Strip and a massive expansion of convention and meetings space, how customers and event planners parse the allegations against the casino mogul and his company's response to them may have important implications for both the CEO and his business' future.