Encore Boston reopens and other good news

Some contradictory anecdotage emerged from Las Vegas this week. Guests may not be packing Las Vegas Strip hotels (Palazzo just stopped taking midweek room reservations) but condo buyers seem to be a different story. Timeshares One Las Vegas and Juhl sold 11 units last month, which not seem like much but is the most ever for the two properties. Said owner Uri Vaknin, “many were cash buyers.” His assessment of the buying spreed was that sales ‘represent a desire by buyers to live their best lives and create a true sanctuary in their home, which may now serve multiple uses as an office/work space and entertainment center—in addition to living space.’ Virtual home tours were a successful sales tool and, interestingly, several buyers cited the advent of the Las Vegas Raiders as a reason for moving. On the flip side of the coin, Covid-19 has racked up another victim in the form of the Great Santa Run, a peculiarly Vegas tradition. The Opportunity Village fundraiser will be held virtually, with contestants running a 5K course of their own choosing. Well, it’s creative, we’ll say that.

If you’re planning on flying into Sin City, be advised that airline “capacity has decreased markedly relative to planned schedules in April 2020,” reports JP Morgan analyst Joseph Greff. Although September marks the beginning of conference season, capacity is off 13% compared to last spring. There’s good news and bad news. Capacity is expected to be up 3% in the fourth quarter but to plunge 47% in 1Q21, compared to 19% for the rest of the U.S. (Add this to our forthcoming list of reasons why Las Vegas will be the last gaming market to recover.) Concludes Greff, “Net, given declining and/or further downside to airlift capacity, the resurgence of COVID-19, anecdotal conference cancellations for the 4Q20, mixed gaming patron social distancing/mask adherence/closed bars, and weak room pricing (3Q20 room rates down 38% y/y per our survey …), we are cautious on Las Vegas Strip 2Q results and 3Q outlooks, which we think will likely be described as soft given accelerated reopenings more being done to display long-term confidence in the Las Vegas market and to attract airlift capacity, as opposed to matching current demand levels.” [emphasis added]

In the slimmed-down resort industry, middle management is the next group that has to worry. According to HotelsMag.com, “outsourcing” is the new buzzword and it’s in reference to accountants, marketing and human resources (our heart bleeds for HR). Already we’ve seen “limiting everything from menus (it’s mostly a grab’n’go model now) to services to hours of operation, shifting staffs to flex hours and prioritizing multi-tasking; ‘complexing’ key executive positions [as at MGM Resorts International] when a management company’s hotels are in close proximity, expanding the use of technology, cutting back on amenities, eliminating extras such as in-room bottled water and expanding labor-saving technology.” Now comes contracted work … or making fewer staff work harder. “I’ve long believed the internal HR department isn’t necessary,” says James Berkeley, managing director of Ellice Consulting. He adds, “This single shift could take out 20% of the costs and not impact the customer experience.”

As for marketing, some argue that this isn’t the time to cut but to be smarter, directing messages to high-value and drive-in guests. But outside caterers could see an uptick in business … and they could use it. Argues hotelAVE senior veep Kim Gauthier, “Hotels in the primary business of selling guest rooms can provide great quality and service to the guests without losing money in F&B.” Some hotels have even outsourced some aspects of room service, although we don’t think that’s likely to be widely adopted. Valets might have reason to worry for their jobs but security is considered safe for now … a good thing in the casino industry, where it plays such a sensitive role.

A big “thank you” to FedEx, other corporate sponsors and Native American activists who finally forced cretinous Daniel Snyder to (extremely reluctantly) drop “Redskins” from the name of the Washington, D.C. football team, effective yesterday. Is it any wonder that Snyder, who has been through eight head coaches in 21 mostly fruitless years, is the most hated man in a place as extremely polarized as our nation’s capitol?

Jottings: None today. Heavy “Question of the Day” action demands my attention. Tomorrow, hopefully.