The rooftop pool club and nightclub at the Cromwell said goodbye earlier in 2025. For over a decade, Drai’s rooftop had been one of the most distinctive venues in Las Vegas, perched 11 stories above the Strip with views that no other club could match. The decision to close it surprised some observers, but Dustin Drai, son of founder Victor Drai and president of the company, framed the move as strategic evolution rather than defeat.
“We started small, scaled big, and now we’re going back to what made the brand special in the first place – connection,” he explained. The rooftop was successful, but the vision for Drai’s future focuses on intimacy and curated experiences rather than trying to be the biggest room with the biggest artist.
This repositioning matters because Drai’s represents one of the most important case studies in Las Vegas nightlife history. The brand has successfully operated for nearly three decades through multiple market cycles, format changes, and ownership structures. Understanding how they are adapting now offers insights into where the broader market is heading.
The Basement Years
Before Drai’s was a rooftop spectacle, it was a basement legend. Victor Drai opened the original restaurant in 1997 at what was then the Barbary Coast. The late-night lounge that evolved into the afterhours club became the stuff of Vegas mythology. Industry insiders, celebrities, and serious nightlife enthusiasts would show up at 3 a.m. when other clubs were closing and party until the sun came up.
The original Drai’s After Hours captured something that Vegas had not really figured out before: there was demand for high-quality late-night experiences beyond the 2 a.m. to 4 a.m. window when most clubs operate. Las Vegas is marketed as the city that never sleeps, but for most of its modern history, nightlife options after 4 a.m. were limited to questionable hotel bars and 24-hour casinos.
Drai’s filled that gap with a product that was upscale enough to attract customers with money but loose enough to feel like a genuine afterhours experience rather than an extension of the regular club night. The music skewed toward deep house and EDM, creating a different energy than the hip-hop and Top 40 that dominated most Vegas clubs at the time.
The economic model was clever. By operating when other venues were closed, Drai’s had limited competition. The crowd was self-selected for people serious about nightlife, which meant higher per-customer spending and fewer issues with guests who were just killing time. Labor costs were higher due to overnight premium pay, but the premium pricing justified the expense.
The Rooftop Gamble
When Drai’s moved to the rooftop of the Cromwell in 2014, it represented a major strategic bet. The afterhours business was solid and profitable, but it was inherently limited in scale. The rooftop concept offered opportunity to capture dayclub and regular nightclub revenue while maintaining the afterhours operation in the basement.
The execution was impressive. The rooftop combined a pool party during the day with a nightclub at night, creating two distinct revenue-generating time slots on the same real estate. The hip-hop and live performance focus differentiated Drai’s from EDM-dominant competitors. And the views provided something no other club could offer.
For several years, the formula worked exceptionally well. Drai’s became known as the premier hip-hop venue in Las Vegas, booking major artists like Future, 2 Chainz, and Chris Brown. The rooftop setting created unforgettable moments – seeing a major artist perform with the Strip as the backdrop was genuinely special.
But the economics were always challenging. Running a rooftop venue in the desert means dealing with weather. Extreme heat in summer, occasional rain, and strong winds all impact operations. The infrastructure costs are higher than indoor venues. And competition intensified as other operators recognized that hip-hop and live performances could draw crowds.
Additionally, the hip-hop nightclub market in Vegas proved to be more volatile than the EDM market. EDM has a relatively stable roster of resident DJs who can draw consistent crowds week after week. Hip-hop club nights depend more heavily on which specific artist is performing, creating revenue unpredictability and requiring constant talent acquisition.
The Return to Afterhours
The decision to close the rooftop while maintaining and emphasizing Drai’s After Hours signals where the company sees sustainable competitive advantage. The afterhours space remains a niche where Drai’s has decades of experience and established brand equity. Competition is still relatively limited. And the format aligns with the move toward “connection” and intimate experiences that Dustin Drai emphasized.
Drai’s After Hours occupies a unique position in the Las Vegas nightlife ecosystem. It is not directly competing with the megaclubs because it operates when they are closed. It is not competing with speakeasies because the format and vibe are completely different. And it is not competing with strip clubs even though they also operate late hours, because the experience is fundamentally not about adult entertainment.
The afterhours crowd is distinct. These are people who are serious about music, comfortable in nightlife environments, and willing to structure their entire evening around ending up at Drai’s at 3 a.m. This self-selection creates a customer base that is more predictable and profitable than trying to appeal to mass-market tourists who might or might not want to go to a rooftop club on any given night.
The operational advantages of focusing on afterhours also matter. Drai’s can concentrate resources on excelling at one thing rather than spreading management attention across multiple formats. The staff can be specialized for late-night operations rather than having to serve both dayclub and nightclub functions. And the marketing can be tightly targeted to the specific audience that values afterhours experiences.
What “Connection” Actually Means
The language about returning to what made Drai’s special and focusing on connection is marketing speak, but it also reflects a genuine strategic insight.
The original Drai’s basement club was intimate in ways that the rooftop could never be. The space was small enough that everyone felt like they were part of the same experience. The music was curated for people who really cared about it rather than programmed for mass appeal. The vibe rewarded being a regular and understanding the culture.
Recreating that feel at scale is difficult, which is part of why the rooftop ultimately did not capture the magic of the original. But afterhours clubs have a structural advantage in creating connection: the people who show up at 3 a.m. have already self-selected for being serious about the experience. They are not casual tourists who wandered in. They made a choice to be there at that specific time.
This allows Drai’s to program for a more sophisticated audience without worrying about alienating people who just want Top 40 hits and bottle service selfies. The music can be deeper, the production can be more focused on sound quality than visual spectacle, and the overall experience can assume a baseline level of nightlife literacy.
The economic model supports this approach. When you are operating primarily during afterhours with a self-selected crowd, you can maintain higher price points because the customers who value the experience will pay. You do not need to discount to fill capacity because the limited competition means demand naturally consolidates at your venue.
The Broader Retreat from Rooftops
Drai’s rooftop closure is part of a broader reconsideration of rooftop venues in Las Vegas nightlife. Several other operators have scaled back or closed rooftop operations in recent years, suggesting that the format faces structural challenges.
Weather remains the most obvious issue. Operating outdoors in Las Vegas means dealing with temperatures that exceed 100 degrees for months each year. Even with misting systems and shade, the summer dayclub experience is increasingly challenging as climate change pushes temperatures higher. Evening events are more manageable, but strong winds can still force closures or impact sound quality.
Infrastructure costs are another factor. Rooftop venues require specialized permitting, structural engineering to handle capacity loads, and logistics for getting equipment and supplies up and down. These costs do not necessarily generate proportional revenue increases compared to ground-level venues with similar capacity.
The competitive landscape has also shifted. When Drai’s rooftop opened in 2014, rooftop nightlife was still relatively novel in Las Vegas. Now multiple properties have rooftop bars, clubs, and pool parties. The differentiation that once came from being on a rooftop has diminished as the format became more common.
Finally, insurance and liability issues have become more complicated. Rooftop venues face additional scrutiny around safety railings, intoxicated guest management, and emergency egress. These concerns translate into higher insurance costs and operational constraints that ground-level venues do not face.
Jason Strauss’s Prediction About Nightlife’s Future
The co-CEO of Tao Group Hospitality has been vocal about his vision for where Vegas nightlife is heading: more live music, more supper clubs, more glamour, people getting dressed up, and a return to creating celebratory moments every night.
Drai’s repositioning fits squarely into this vision. The move away from the massive rooftop operation toward a more intimate afterhours focus is exactly the kind of shift Strauss is describing. It is about curating experiences rather than maximizing capacity.
The interesting question is whether this trend represents a fundamental market shift or just a pendulum swing that will eventually reverse. Vegas nightlife has historically moved in cycles – periods of consolidation around major venues followed by fragmentation as new concepts emerge, then consolidation again.
What makes this cycle potentially different is the role of social media and experience economy dynamics. Modern consumers, particularly younger demographics, increasingly prioritize experiences over things and value authenticity over corporate polish. These preferences favor smaller, more distinctive venues over massive standardized clubs.
If Strauss is right, we should expect to see more operators following Drai’s lead: closing or downsizing their largest venues while investing in more intimate formats that prioritize quality over scale. The megaclubs will not disappear, but they may represent a smaller portion of the overall nightlife market than they have over the past decade.
Key Insights
Long-term brand success in nightlife requires adapting to changing market conditions rather than defending historical formats that have become less viable. Afterhours positioning creates defensible competitive advantages through limited direct competition and self-selected customer bases willing to pay premium prices. Rooftop venues face structural challenges including weather, infrastructure costs, increased competition, and liability issues that impact long-term economics.
Focus on “connection” and intimate experiences reflects broader consumer trends toward quality over scale and authenticity over corporate standardization. Successful nightlife brands maintain core identity while being willing to abandon specific formats or venues that no longer serve strategic goals. The retreat from rooftop formats may signal broader industry recognition that outdoor nightlife faces sustainability challenges in an era of climate change and rising operational costs.
Strategic Questions for Operators
The Drai’s evolution raises several questions that other nightlife operators should consider. First, are your largest or most visible venues still your most profitable, or are they prestige assets that no longer justify their operational costs? Second, would your brand be stronger if you operated fewer venues at higher quality rather than trying to maintain broad market presence? Third, do your venue formats align with where consumer preferences are heading, or are you defending legacy positions that will become increasingly difficult to maintain?
Fourth, have you identified defensible competitive positions where you have genuine advantages, or are you competing in crowded segments where differentiation is difficult? Fifth, are your operational resources spread thin across multiple formats, or could you improve execution by narrowing focus? Finally, do you have the organizational willingness to close successful venues if strategic repositioning requires it, or will attachment to history prevent necessary adaptation?
These questions do not have universal answers. The right strategy depends on specific market contexts, brand positioning, ownership structures, and competitive dynamics. But the Drai’s case demonstrates that even iconic venues with strong historical performance may need to be abandoned if the broader strategic direction requires it. Operators who cannot make those decisions risk becoming increasingly irrelevant as market conditions evolve.
