One S&G reader took great exception to some comments that Harrah’s Entertainment CEO Gary Loveman made to Reuters:
“He said that hotel rates had got so cheap in Vegas — $89 a night for a room at a very nice hotel — that anyone might be tempted to sell their home and move into a hotel.”
Really? With room tax that daily rate is going to be at least about $100/night — or about $3,000 for a month’s stay. And that’s for a small single room with no kitchen and one bath.
Does Loveman have any idea of what “normal” people pay for a house payment? Not to mention what a monthly rental payment is going for in Vegas (which a LOT of local Vegas residents are now doing after losing their homes to foreclosures and short sales)?
No wonder they are having a difficult time understanding the market they are facing if $3,000 a month seems cheap to him. Just goes to show you what bilge they teach at the Harvard Business School.
On a personal note, at the time he gave those Reuters interviews, Loveman looked like he was on the verge of a major coronary, so much so that I literally fear for his life. He may not be the best CEO in gaming but he doesn’t belong in a hospital bed either. Please your doctor, stat, sir.
If it’s possible to single out any one person most responsible for the implosion of Las Vegas, Gutboy Barrelhouse, er, Gary Loveman, would be the most logical candidate. He has been operating under a business strategy built on acquiring monopolies, and is responsible for the destruction of Caesar’s, Bally’s, Paris, the Rio, etc. etc. etc. in Vegas. Harrah’s has also eaten casinos all across the US, including some that have given it severe indigestion. During the boom years, Harrah’s was willing to “pay” (with leveraged junk-debt) far more than a property was worth, just for the sake of cornering a local market. That policy has come home to bite them in the butt, and Loveman blames the economy for the fact that Harrah’s is now $31 BILLION in debt and facing bankruptcy, but the real cause of Harrah’s impending demise is their greedy and foolish acquisition-mentality during the boom years. That, and their incredibly stupid assumption that they could buy a property, increase the prices of everything, destroy the gaming by raising limits and drastically worsening odds (like: putting in 6/5 blackjack, which has EIGHT TIMES the house advantage of regular blackjack), and still, people would come pouring in the door. It even worked for a while. Sort of.
The other great offense that Harrah’s committed was to ruin the WSOP. $35 baseball caps with the WSOP logo. $9 turkey sandwiches at the snack bar. TWELVE PERCENT taken out of the prize pools. Buy in for $10,000 and get a $10 food voucher. Not enough bathrooms–have to go outside. Cheap cards, bad dealers. Feh.
I agree with the writer of this letter–Loveman obviously hasn’t inhabited the real world for some time.
Kevin, what you say is true. I actually still stay at Harrahs properties cause I have so many points built up over the years. I used to go to Harras properties 5 to 6 times a year, and I play pretty well (Diamond Card). Lots of room comps, etc. But in the last 3 years, you have no chance of winning at all. Video Poker is horrible. Slot hold is much higher, to where it is almost impossible to win a dime. Go to any of their casinos. You used to hear machines playing the jackpot song, and making lots of noise. Now, all you hear are people talking, but no bells. It has gotten so tight, that we do not even play there much. We stay there and play elsewhere. When the comps are gone, so are we. I know a lot of people that feel the same way, and do the same thing. I bet the Bellagio has better payback percentage than Harrah’s properties do.
Also, they have gotten rid of so many employees, that even if you do win, it takes 20 minutes to get paid when they are busy. The lack of drink servers also is evident. Try to get a drink in the evening, or a cup of coffee in the morning.
Since the buyout, Harrahs has gone straight downhill. I expect that soon enough they will be forced to break it up and sell properties, at a huge loss. More investor haircuts comming.
LOOSEN UP—-CAN’T YOU TELL A JOKE—-NO KITCHEN-SMALL BATH—–WOW-YOU MUST BE LIVING IN A TREE—-TRY TO SMILE—AS YOU SWING BY……
Actually $89 seems a bit of a reach for Harrah’s properties.