07/25/2011 01:45 pm ET Updated Sep 20, 2011

Loyal Pennings, Las Palmas: Life Of The Party

You may not find Loyal Pennings in any of the supermarket tabloids, but chances are, he's partied with most of the Hollywood celebrities you see beneath the screaming headlines week after week. In fact, it's his job. Over the past two decades, he's become a fixture of Los Angeles nightlife, as co-owner of some of the hottest clubs in Hollywood. When Leonardo DiCaprio first hit the party scene around the time of that iceberg movie, Pennings was there. When Britney Spears and Justin Timberlake went public with their real-life Mickey Mouse Club romance, Pennings was there. And when a certain Oscar winner invited the commander-in-chief for a night out on the town, Pennings was there -- to turn him away.

But the glamour life isn't quite as glamorous as it might seem. Nightlife is a business, a tough business, and even a winning formula of the right decor, music and A-list clientele has a shelf life. Countless competitors are always jockeying to become the next "it" place -- a dimly lit, liquor-fueled survival of the fittest that plays out on TMZ and Twitter today. Unlike most industries, clubs must constantly reinvent themselves, even if their business model is working just fine. In Pennings' case, he actually turned Las Palmas, a rundown Mexican restaurant with a cameo in the opening scene of Pretty Woman, into popular club of the same name, then transformed it into the futuristic LAX, only to turn it back into Las Palmas a decade later. His most recent venue, H.Wood, was located just steps from Hollywood Boulevard and the Kodak Theatre and served as an upscale tea room by day, laid-back lounge by night.

Pennings admits he's always had a lot more fun throwing the party than partying himself, and he's become more and more involved in the grown-up side of the business as his career has evolved. These days, you'll rarely catch him behind the bar after midnight. That entrepreneurial maturation not only seems to have given him staying power in a decidedly fly-by-night industry, but has also propelled him into a new venture -- the Wickler, a wireless electronic clicker that allows doormen to relay information about the flow of patrons, and in the process, helps club owners run a much more efficient operation. After all, if anyone knows the nuances and needs of the business, it's someone who has a little experience pulling back the velvet rope.

A lot of businesses are focused on generating buzz, but perhaps none more than a Hollywood club. What's the secret to staying hot?

Well, it's all based on perception. If you're perceived as the hottest venue, then you are the hottest venue, and you have to almost maintain or exploit that. It's a fine line -- we do have a lot of celebrities and some of them want to keep a low profile to their nightclub habits, some of them want to be in the limelight. Usually, the press is more interested in the ones that want to keep it in the background, so we have a balancing act with exposing the type of business and customers we have and at the same time protecting those customers. That part is kind of unique. At the end of the day, I'm just selling food and alcohol, so in college, I sold food and alcohol to college students and I wasn't worried about leaking things to the press. Now I'm in Hollywood, and to be competitive, I have a good night, it's really good for the business to let the public know what type of venue we are, because without them knowing, it's like we're doing this in a vacuum. If I overdue it, if I overexpose the customers or overexpose what's happening, then my customer base gets a little weary of the comfort zone.

How has that changed with the growing armies of paparazzi, the rise of TMZ and the popularity of social media like Twitter and Facebook?

Well, there used to be four or five and I used to be able to recognize the photographers. The same guys that were out front here I'd recognize at the airport. Now, there's 500. You get a camera and you have the night off -- you can become a paparazzi. So that part is really strange.

Twitter and Facebook and social media have a little more impact, because inside the venue, you'll see a blue glow on people's faces, because they are sitting there communicating -- and usually they're communicating if the situation is not really inviting. When they're really excited, they're going, "Hurry up and get here, everybody's here and you've got to get here now" and they close the phone. It's when the venue is a little boring or a little slow that I see the blue faces. It's a little stomach-wrenching. You see people potentially making other plans or shifting and it happens quick now. Back before cell phones, once you went to a venue, you were pretty much locked into that venue for the evening. Now, if where you're at isn't the spot where you want to be, you're immediately aware of it, you immediately know where you want to go and you're telling everybody you're leaving. It helps when we have a great night and everybody finds out about it and they all show up. When we have a tough night, everybody piles out of here.

This is the kind of industry that doesn't exactly come with an instruction manual. Is hands-on experience pretty much the only way to learn?

That's probably the most valuable thing -- even over location. They say, "location, location, location." But I think local experience is equal to location.

You've been running clubs for two decades. This doesn't seem like an industry that necessarily lends itself to a long and distinguished tenure.

Sometimes attention span is a larger determination of how long you kind of stay in the saddle. A lot of people just get tired of it. The nights are late, it's a wear and tear on you, it's really hard to build a relationship and have a family when you have this nighttime responsibility. And the people are a bit rough. It's tough. So a lot of people just reach a saturation point, even despite how good they are at it, and they just decide, "I don't have the stomach for it anymore."

You could have the coolest venue, the best bartenders, the tastiest cocktails -- and in this industry, you still have to constantly reinvent the wheel. As an entrepreneur, that must be frustrating.

It's terribly frustrating, but you've got to just accept it. If that really bothers you that much than you've got to choose a different profession. Our niche, this little nightclub niche that I'm in, what drives it is something new and exciting, and no matter how new you are, the minute something else opens, then you become old news and that's all it really takes. There's always something opening up or re-opening here in Hollywood. So it's really frustrating, but you just kind deal with it. You know, I'd imagine garbage men don't all appreciate the way they smell when they come home, but if you're a garbage man, then you just deal with it.

So what's a typical night for a nightclub owner?

Well, I prefer the days. I get up around 6:30 or 7. First thing I do is the accounting for the night previous, set that up for our courier to do the bank runs, then check on any incidents that may have taken place, any peculiar situations that may have happened. I've got a slew of partners that handle all of the promotional needs, so I skip on the promoter meetings. There's always something with the police department, health department, fire department, seeking some type of compliance issue, so I'll handle that. There's always a lawsuit or two that needs my attention. Running around and dealing with that. ABC [Alcohol Beverage Control] will have a complaint, have some questions. So I handle the white-collar stuff, I guess, and then my partners, who are very valuable, they deal with all the promotions and kind of tee the evening up

Then we get the evening started. I'm usually there until 10 or 11. I live very close, so when I do decide to pull out and go home, I'm minutes away and it does happen -- the sergeant of vice will be here and he wants to talk to me, he doesn't want to accept somebody else. So I've got to put my suit on -- I keep it hanging -- and just drive down the hill, deal with him, then I'm back in bed.

People who work in an ice cream shop eventually start to hate ice cream. This seems similar. People must think running a club is a constant party, but are you kind of over it by now?

I never did like it, though, and that's really interesting. In high school, I was kind of the guy that would arrange it and organize it but was never the participant. The only time I really indulge or drink or party is when I'm out of town. I feel like I'm always on deck -- I could get a phone call at any time and I just don't like being in a position where I'm incapacitated and I can't deal with the fire marshal or eloquently speak on what happened. I think a lot of my success through the years has been that I was the club owner that didn't party -- I was all business. Let's sell the alcohol, let's get the people in and move them out, let's count the money, let's go to bed. I have partners that would go to the after-parties and I would rarely make appearances at that stuff. So that hasn't changed.

Alright, let's get to the good stuff. Give us some celebrity gossip.

Well, we turned down Bill Clinton one night -- that was kind of funny, I don't think he would care if I mentioned that. It was during that lame duck period, after George W. Bush was elected and he was still in office. It was the winter, he was in town for a fundraiser, and Kevin Spacey was in. This was the first time I had ever seen two-way pagers, this was when two-ways were popular, and Kevin Spacey had this two-way device and he leans over and has me look at it and I ask, "Who are you talking to?" He says "the President" and I say, "That's Bill? Clinton?" And he goes, "Yeah." So he's two-way-ing him and he says he's at a club, Bill asks where is it, he says its in Hollywood and Bill says, "Can I come?" Spacey looks at me and asks, "Can he come?" and I'm like, "No, absolutely not." You know, I had girls that were likely underage, we were over capacity, there was a lot of things going on at that moment and I did not want Secret Service coming in. He probably wouldn't have come, because the Monica Lewinsky thing was still fresh, and I doubt, on his night in Beverly Hills, he would have hit a nightclub in Hollywood, but just in case, I told Kevin Spacey to tell him, "No, tonight's not a good night." I watched Bill write, "Wow, tough club -- they wouldn't even let me in." We get a little chuckle out of that. I'm a Republican so I didn't really feel too bad about it.

Through the years, stars when they were just starting out all the way to when they were a huge success -- I've dealt with them all. We've had fights. We had the catfight between Paris Hilton when Shannen Doherty was here, over Rick Solomon. We had a catfight between Nicole Richie and Paris in here where we had to escort Paris out. The fights are the funniest ones.

I give you full permission to do some more name-dropping.

It's almost easier to name the celebs that don't come in here. Leo DiCaprio, Mark Wahlberg, those are the easy ones. Toby Maguire, Charlize Theron. I'm just trying to think of all the girls that I've seen at the bar. Early on in the Britney Spears-Justin Timberlake relationship, that courtship took place here. They hadn't been photographed together before and they were really scared about exiting because there were paparazzi outside, so we had a little sneaky back door and we snuck them out and they were so thankful. Then, two days later, they're walking down the red carpet at the Grammys and it was like the big coming out for them.

All those boy bands, like 98 Degrees, *NSYNC, Shakira, Prince were coming in here. Rick James, which I was excited about. We had Rick James in here and he had a little kink in his neck and I read up on him -- he had like rock 'n' roll neck from doing these dance moves too much. There was Rick James in there, having a good time. He passed away a little while after. Hugh Hefner was a regular for a long, long time. Just everybody.

A short time after 9/11, that was a weird thing for us. We had already been open for a year plus, and then when 9/11 occurred, people went into a little shell-shock, protection zone, back to their comfort things, and we were a venue that was already established and people were very comfortable and had good memories of it. They were kind of shunning new things at that time, and we just got this beautiful rebirth. A few months after -- from Janet Jackson to Timberlake and Wahlberg, everybody you can imagine -- we just didn't have enough tables for those celebrities. We were trying to find out who is friends with who. Sean Penn and Joaquin Phoenix were actually buddies, so we were like, "OK, we'll put you two guys together because we don't actually have a table for each one of you."

Who is the nicest celebrity you've hosted?

They are all nice in this environment. You know, I run into them on the street and I'm not going to pretend like I have a relationship with them. They come into the bar, I'm the bar guy, and sometimes they're like "Oh, I recognize you, you're the bar guy." Who would be the nicest? The most congenial? When we did the Las Palmas rebirth, the first week we had Leo DiCaprio come in like three Wednesdays in a row and he was just happy to see it back to Las Palmas, because it was Las Palmas when he was a young star in 2000. It became LAX and we all had fun here in LAX and now it's back to Las Palmas. It's kind of like a little 10-year reunion. He was extremely gracious and he's always been nice and easy to deal with, but they are all like that. In this job, you get to see people on their best behavior. If they're in a pissy mood, you know they don't want to go out and they usually stay home. If they come out, they are in a good mood and I can bring their spirits up. My job is the opposite of someone that, like, collects parking tickets for a living because everybody's pissed off when you get a ticket. I'm the guy that everybody is happy to see.

In addition to the clubs, you also have a new venture called the Wickler, which helps club owners track the flow of patrons. What's that all about?

It's a hyphenated word that stands for "wireless clicker" and we incorporated our company in 2007. Two years prior to that, I met my partner Eric Parmater and described to him this big problem I saw in the nightclub industry. We approached, partnered, aligned ourselves with a goal to solve this occupant-management problem. Before, with the doors, everything was run with these little chrome guys [traditional counters] and you counted people coming in and out. Some venues would track male and female, the doormen would sometimes have multiple clickers and they would have tape on them to keep track of what they were counting. Then you would have to do a little bit of math to determine what the occupant load was. At the end of the night, they chuck it in the cash register and forget about it until the next shift.

When we're operating, the fire department will show up, they come in like a brick through the window and they want to know what is your number. They don't care what I was doing five minutes before, they don't care if we're out of beer or we need ice -- I have to stop what I'm doing and give them the occupant load right then, and if I'm not accurate, then they're going to do an audit, they are really going to inspect the building. So I was telling Eric we just have to come up with a wireless system so that these two devices can talk to each other, so that the front door knows what the back door has and vice versa, and then all these other little side benefits came out of it, like a male/female ratio, time of entry, time of leave, the peak occupant load. It's just endless, the things we've discovered with making these things digital and having them communicate with each other.

What have been the challenges of developing a product like this?

We were doing a lot of individual sales chases where we found ourselves -- and we're trying to curb this -- trying to custom fit these Wicklers to do exactly what a particular owner wants. We had a guy in London that wanted to count how many people that were too drunk and got turned away, so we had to stop our program and come up with a different programming angle to do this and then we had venues that had a variety of different requests. That's been the toughest thing, to come with a simplified model. This is what we can do. We count ins, count outs. We can't go chasing our tail every time someone has some wacky thing they want to Wickle, whether it's blondes or high-heels or whatever.

While the idea for the Wickler was born out of your experiences as a club owner, running an electronics company is obviously a bit of a departure from what you've been doing most of your career.

I don't want to be the last guy out when the bars close anymore, so I think this is the perfect transition for me. I love this side of it and I feel like all my 20 years of experience has prepared me for this. You can't put me in a room of nightclub owners where they come up with a problem I haven't seen before or can't relate to.

As you mentioned, there are a lot of characters in the nightclub industry, which can be a pretty superficial one. A name like "Loyal" stands out. Anyone ever give you a hard time about it?

I have a phone message from somebody that I've kept because it's hilarious. She was like, "Loyal, yeah right! Hardly! Nice name!" It was Paris Hilton yelling at me for something she was really upset about. It's just really funny. I've been teased my whole life. It's a family name. My mom's brother was a Loyal and my grandfather's brother was Loyal so I inherited it. And you know, it's a unique thing. I'm really proud of it.

Entrepreneur Spotlight

Name: Loyal Pennings
Companies: Las Palmas, The Wickler
Age: 41
Location: Los Angeles
Founded: 2000 (Las Palmas), 2006 (The Wickler)
Revenue: Undisclosed

The original version of this article appeared on AOL Small Business on 7/18/11.