We’d argue that the locals casinos aren’t failing to keep pace with those on the Strip when it comes to quality. Two that you mentioned, Red Rock Resort and South Point, are state-of-the-art and South Point is very popular. For that matter, we’ve rarely set foot in the Orleans when there wasn’t a hubbub on the gaming floor. But we decided to investigate farther.
Station Casinos ignored our query and the phone for the press department at the independently owned South Point, which is very popular with out-of-towners, went unanswered every time we called. M Resort, owned by Penn National Gaming, wasn’t much more helpful.
The one company that was ready, willing, and able to answer your question was Boyd Gaming. As we’ll see presently, Boyd is primarily a locals casino company that actually has a large segment of the tourist trade sewn up. Boyd Director of Communications David Strow took the time to address the tourist question in detail. He writes:
"While we are often referred to as a ‘Locals’ casino operator, tourism is actually a very significant part of our Las Vegas business. Among our 12 properties in Las Vegas, we currently operate just over 6,000 hotel rooms across the Valley. Considering that our annual occupancy averages between 84 and 91 percent (depending on the property), we host a considerable number of tourists in Las Vegas each year.
"Our most established tourist base is Hawaii, which has been the primary feeder market for the California [Hotel] (and our other downtown properties) for more than 40 years now. Hawaiian visitors account for about two-thirds of our room nights at the California (and between 40-50 percent at the Fremont and Main Street Station), so this remains an extremely important source of business to us. We have diligently focused on maintaining and strengthening those relationships over the years. Many of the California’s amenities (especially the restaurants) are geared toward Hawaiian customers, our employees typically wear Hawaiian apparel, and we regularly host ‘Mahalo parties’ in Hawaii to say thanks to our customers and promote our property. We also run five charter flights a week between Las Vegas and Honolulu. As a result, we are by far the favored destination of Hawaiian visitors to Las Vegas.
"At our ‘locals’ properties (the nine outside of downtown), the proportion of tourist business is really a function of the property’s proximity to the Strip. We obviously host a significant number of visitors at properties like Sam’s Town and Suncoast –- these have 1,000 hotel rooms between them and each runs at 85 percent-plus occupancy. But tourist business is a much larger portion of the business mix at the Orleans and Gold Coast (about 50 percent at these properties). That’s both a function of their location (a mile or less west of the Strip) and their hotel size –- Orleans has 1,885 rooms, while Gold Coast has 712. With many more rooms to host guests, their business naturally tilts more toward out-of-town visitors.
"Offering a good product at a reasonable price point is the key to success for drawing tourists to these properties. We offer a newly updated hotel room product, just a few minutes away from the Strip, at a price point far below what you would pay at a Strip hotel. (And we do NOT charge for parking!) As a result, both the Orleans and Gold Coast have become very popular destinations for out-of-town visitors looking for more attractively priced resort options.
"We also use our B Connected program to draw in customers from our properties across the Midwest and South (12 in all, across six states). We have a considerable base of customers that patronize these properties, and many are obviously interested in visiting Las Vegas at some point. The B Connected program gives them a way to use those points on a stay at one of our Las Vegas properties – driving more tourism to the market."
Thanks to David Strow for that detailed explanation.
Now, in fairness to Station, it’s somewhat hobbled by the fact that, except for managing a couple of tribal casinos, it has no properties outside of Las Vegas. Thus, unlike Boyd and Penn, it cannot use its My Rewards program (formerly Boarding Pass) to enable customers to rack up points for a Vegas stay while playing in a regional market.
However, Station has been riding an extended curve of increased profits and is making a thrust into the tourist corridor, having recently purchased the Palms Hotel-Casino, so leadership is obviously convinced — and not without reason — that they’re ready to go up against the big boys. All the casino industry is watching with bated breath to see how that development plays out.
