Liz Benston takes a look today at the newest message from the Las Vegas Convention & Visitors Authority and finds the LVCVA “thinks it’s bad form to make references to ‘affordable’ and ‘cheap.'” Oh yes, God forbid anybody should think there are deals to be found here (though there are) when they could spend that money closer to home, perhaps at one of the finer tribal casinos. Harrah’s Entertainment has a nice one in SoCal, I hear.
UNLV’s Prof. Jeff Voyles, says (in Benston’s paraphrase) that “it would be disingenuous for Las Vegas to market itself as a bargain because room rates will bounce back and the Strip will be punctuated by expensive, high-rise hotels bargain seekers can little afford.”
Yes, but that’s partly how we got into our present pickle: by creating both the perception and the reality that the Strip isn’t meant to be affordable anymore (which may account for the newfound market strength in Downtown, especially as Strip bargain plays bit the dust).
Also, I don’t mean to disrespect an academic — the parlor sport of choice among the low-forehead types at the Dogpatch Daily — but Voyles seems off base when he says, “We can’t change our market segment based on a dip in the economy.” Seems to me these are precisely the circumstances that would dictate a change in positioning. Principled talk of “sustaining the growth that we have” is fine (even though recent declines in gambling revenue and visitation make me want to ask, “What growth?”), but the bottom line — so to speak — involves putting fannies on slot stools and in poker chairs, to say nothing of hotel beds.
(MGM Mirage would seem to tacitly disagree with Voyles, seeing as it’s just created the position of “President of Marketing-Customer Development. It’ll be filled by Joe Brunini, whose brief will be to “identify emerging customer markets and create methods of attracting new audiences.” My congratulations to Mr. Brunini, who started in the business as a dealer in Atlantic City 28 years ago.)
In this respect the Bad Timing Award goes (with our sincere condolences) to Sheldon Adelson, who unleashed 3,443 hotel rooms and suites on the Strip, in the Godzilla-size form of Palazzo. Now weekend rooms at Palazzo are going for $219/night. Adelson could scarcely have chosen a worse moment to flood the market with new capacity if he’d had a crystal ball.
While we’re on the subject of marketing messages, what the heck went through the LVCVA’s mind when it dreamt up the final panel of this:
“In crowd,” “velvet ropes”, “bottle service,” “intrigue”? Isn’t that the Pure Management Group scam-dal in seven words? Do these people read the papers or “the Internets”?
Nostradamus Dept.: In this little blast from the past, various prophetic utterances are made regarding the effects of an orgy of private-equity buyouts in the gaming sector, such as: “My fear is that they’re going to look at casinos as an aggregate bunch of transactions and start coming up with proposals such as reducing labor on the F&B side or reducing marketing, or taking other steps to squeeze out more profitability.” (Dennis Conrad)
Then there’s, “Industry sources said that, if Station is purchased, the new company … likely would put expansion projects on hold for at least 18 months until it paid down debt significantly.” (author Bob Shemeligian)
Flash forward 18 months from the date of the article and all Station Casinos projects are on hold — until early 2010, at least. That might not have been necessary if Station’s top honchos hadn’t insisted in lugging away over $420 million in swag as part of buying out their own company. As for the Conrad quote, it’s a prescient précis of what customers say is going on at Harrah’s.
