How Will Circa Impact the Prices of the other downtown properties?

Want to put on your hats and look into your crystal ball? There’s lot of construction downtown. You have the new megaresort [Circa] that will rival Strip properties, the new tower at the Downtown Grand, and I am sure I missed some. But what will this do to prices? On one hand, if downtown explodes, will the prices go up? On the other hand, the new megaresort will set a new bar. Will other properties like The D, El Cortez, Four Queens, Main Street Station, and others have to lower prices? I mean, if it is only 20 or so bucks a night difference, people might opt for the better property? What about places like the Golden Nugget or at the other end the Golden Gate?

[Editor's Note: This QoD is answered by our Stiffs & Georges blogger and frequent QoD contributor David McKee. We like what he says here so much that we're giving him the byline.]

Circa is definitely throwing down the gauntlet in front of all other downtown properties.

Boyd Gaming spokesman David Strow thinks this is a good thing. “We are very optimistic about the future impact of Circa,” he wrote. “Downtown has been on a positive growth trajectory for some time now, and we think the debut of Circa will further build on that momentum. We think it’s the type of project that will further boost visitation to the downtown market — and with three properties [Fremont Hotel, California Hotel, Main Street Station] in the area, we are confident we will benefit from continued overall growth in downtown visitation.” Aside from some renovation of the California, however, Boyd hasn't been doing any pushback.

Other operators may not be so sanguine, although with no room to expand, their options are somewhat limited. Terry Caudill recently reopened some of the hotel rooms at Binion’s. His best chance for that and his Four Queens is to keep plugging away at the value message: "No resort fees" strongly resonates with customers (and us).

Golden Nugget owner Tilman Fertitta always tries to keep ahead of the competition, although he may have met his match in Derek Stevens. Circa will have a three-story sports book (with the world’s largest LED screen) and a tri-level pool area, featuring live entertainment, atop the building, not to mention the state-of-the-art Garage Mahal. It’s not immediately clear how Fertitta can keep from being checkmated, aside from continuing to maintain the nicest hotel rooms in downtown and the finest dining array, too. (A good thing for Fertitta that he owns so many restaurant brands, several of which he has imported to the Nugget.)

Since Derek Stevens owns both The D and the Golden Gate, he’s competing with himself to a degree with Circa. However, he can also carve out discrete market niches for each of his three hotels, which he is already using as platforms to promote amenities like the Circa sports book. The Golden Gate could be positioned as a super-bargain property (with rooms to match) and The D could aim at the middle market. And if Circa’s eventual 777 hotel rooms (500 or so to start) fill up fast, Stevens can always reroute the overflow to his other two properties. So Stevens’ additional hotels could be aces up his sleeve.

Boyd Gaming’s sanguine attitude toward Circa could easily taken for complacency and its properties will be the hardest-put to compete, although the company has its own ace in the hole: Hawaiian tourists who are fiercely loyal to the Boyd brand and unlikely to stray to Stevens’ resort for long, no matter how bright, shiny, and new it is in the beginning.

We’re not sure why the Downtown Grand is choosing this moment to expand. Being a couple of blocks off Fremont Street has been a real challenge for them and the casino can be half-empty on weekday nights. Management has been trying to counter-program by marketing to the young e-sports crowd and jumping in with both feet on skill-based slots. Whether that translates to heads in (even more) beds remains to be seen.

All that being said, downtown gambling revenues have been on an upswing and the opening of Circa could easily be a nodal moment when urban hotel-room revenues are poised to move upward, too. Then again, hotels not in the Circa/Golden Nugget luxury tier (i.e., all the other downtown casinos) may be compelled to lower rates still further to give customers a reason to stay with the tried and true.

I'm going out on a limb and predicting an initial rise in room rates, followed by a market correction if Circa doesn’t play to capacity crowds … or by a settling in at a higher price point if the newcomer is swamped. Those 500-plus rooms could sell out really quickly, especially in peak periods. So for the moment, I believe Stevens has the whip hand, with supply driving demand.

How will Circa, when it opens, affect the prices and popularity of the other downtown hotel-casinos?

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rokgpsman Jan-29-2020

Circa

I think a lot depends on what kind of "vibe" gets established at the Circa. At first there will be lots of visitors, young and old, to see the new place. Each person will get his own feeling about the place,,, are the bars, restaurants, casino promotions, background music, machine paytables, etc what you like? Is the place filled with too many loud younger adults for your taste, or do you feel comfortable and fit-in while there? If it's like the in-your-face circus that Fremont St sometimes turns into after dark that will turn some people off while attracting others. I'm hopeful it will be a splendidly nice place that adds a lot of positives to what downtown the area offers. That will encourage the other properties to improve their places and we will all benefit.

Jerry Patey Jan-29-2020

circa

to me depends on their vpoker pay tables. i will stay at place having best pay tables. freely others will do same. i do not need 100 dollar room to sleep and shower. slap have to consider comps. i presently get 4 free night food credits and free play at 25 cent level. doubt circa will beat that. if they do not compete they will fold. if they do great i will consider Circa

Dave in Seattle. Jan-29-2020

Capitalism.

The Steven's brothers want to have the "best" place downtown. At first,the gaming rules will mirror the strip rules.6;5,etc and then the company will change their rules to compete with the other sawdust joints.If the sheep don't care about 6 to 5,the other properties may follow suit. That would be a bad thing for downtown.The room prices will be sky-high.The gaming rules will be terrible as will the sports books offerings.They will attract the mid to high rollers to discourage the penny slot players.Yes,there will be resort fees and pay to park.There will be downtown casino-hotels and then then there is Circa.

Kevin Lewis Jan-29-2020

Crystal ball...

Let me polish it up here and see what is portended:

1. Circa will be a Strip-style joint, with resort fees, parking fees, amenity fees, fee fees, 11:10 blackjack, 95% video poker, and room rates that would curl your hair.
2. This will infect every other downtown property--gradually, of course, especially since they will be able to raise their room rates by 50% and still say, "But we're still cheaper than Circa!"
3. There will be some sort of corporate merger, as competition lowers prices, and we can't have that.
4. Vegas will be about as much of a bargain destination as Dubai.

Jan-29-2020

1 little correction

The Downtown Grand is actually only 1 block from Fremont St., not a couple of blocks from it.

Adam Cohen Jan-29-2020

For what it is worth

Thanks for the detailed answer.  I guess their a few other items and maybe I am overthinking it But this board is made of gamblers mostly slots and VP but some Blackjack and Card players. But the winds have shifted and he casinos want the younger crowd who view gambling as part of the Vegas experience if at all. They want pools, clubs etc. it seems this hotel is set up for that.  But as they draw people from places like the Grand and The D, they will have to respond with better amenities which will be hard or simply a lower price point. At least that is my guess. As for the Nugget they are in a tough spot. It will depend on the room price point. If you are there to just party and it is 20-30 more a night you will go to the newer better pool and hotel in general

Roy Furukawa Jan-29-2020

Boyd

Boyd would be smart to lay in waiting to see which way the wind blows on Circa. If it succeeds they could easily revamp Main St. to be more upscale to compete if they choose to do so. Of course if Echelon Place is any indication of their planning prowess, then maybe not.

Annie Jan-29-2020

The Approximately Resort and Casino

I looked-up why Circa is being called Circa. It's supposed to be an homage.

From the R-J:

"The name took a great deal of thought and research. Stevens says he looked at many names that evoked memories of Las Vegas in its formative years [...] and their establishment dates such as, "Circa 1941, Jackie Gaughan, El Cortez. Circa 1951, Benny Binion, Binion's Horseshoe. Circa 1966, Jay Sarno, Caesars Palace. Circa 1969, Kirk Kerkorian, International." 

I'm all for paying tribute to early Las Vegas and to those who built it, but calling a casino "Circa" for that reason is ludicrous. You'd have to be a mind reader to know that "Circa" refers to what they intend it to refer to. It's like calling a casino "Approximately." It means absolutely nothing without providing a lengthy explanation, and even then it's dumb.

Also, in solving the riddle of the puzzling name, they left out Mel Exber who, for decades, owned The Las Vegas Club that the Stevens demolished to build their new casino.

Question of the Day - 29 January 2020

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