Resort fees likely to worsen; Fertitta preaches caution

All hail Terry Caudill. His Four Queens is one of the very few hotel-casinos in Las Vegas to eschew resort fees. At least that’s what the Reno Gazette-Journal tells us. The RGJ took a deep dive into the resort-fee issue and found the hospitality industry’s position to be We need the money, we’re keeping it, screw you. In defense of the hoteliers, they need to pay for the “amenity creep” in hotel rooms (think of all those HDTVs) and—in the Las Vegas market in particular—must combat the downward pressure on room rates exerted by online travel agencies. Las Vegas Advisor Publisher Anthony Curtis touches a salient nerve when he says, “By raising the rates using resort fees, those additional revenues are not subject to the OTA commission. It’s dual purpose in Las Vegas: First to keep the rates down and second to keep more of their own revenue without having to duke it [out] to their online travel partners.” The impact on customers seems to be, at best, a secondary consideration.

Another Las Vegas casino executive, besides Caudill, who expressed caution about resort fees was Caesars Entertainment CEO Anthony Rodio. As one Wall Street analyst put it, after clawing for business for years in Atlantic City, a cutthroat market, Rodio may have been shocked by all the hidden charges Caesars cavalierly piles onto its Las Vegas customers.  Of course, one of the ironies of resort fees is that you’re paying for the ‘privilege’ of getting things that come with the room (like the land-line phone you’re never going to use). “But it is mandatory,” said Macquarie Group analyst Chad Beynon, “so even if you don’t use those products you still have to pay a $30 to $50 fee that is not being advertised when you book your room.”

MGM Resorts International is unrepentant. “We are constantly evaluating prices to ensure they properly reflect the business landscape and the services and amenities they support,” said a spokesman. In other words, prepare for more of the same. In light of the unabashed greed in Las Vegas and the ever-higher quality of casino resorts closer to home, is a Vegas vacation a bargain any longer? Would a ‘staycation’ be preferable? Call me from poolside at Hard Rock Atlantic City and tell me how you feel.

One casino executive preaching caution is Golden Nugget CEO Tilman Fertitta. Never shy about speaking his mind, Fertitta sees indicators of a recession coming after 11 years of growth, citing conservative trends in spending. “You can’t have positive same-store sales every year,” he says. “I don’t pay attention to the stock market,” he adds, pointing to the amount of credit flooding the market. (Which would certainly help Tilman if he wants to buy The Cosmopolitan of Las Vegas or peel off a Caesars Entertainment asset.) But will easy access to credit mesh with consumer sentiment? “Remember, everybody fills their tanks. You can only buy so many new cars. You can only buy so many new TVs. You can only lose so much in a casino. So, at some point, the consumer is full. They used up their credit. I think we’re getting to the end,” Fertitta says.

* Sports books in Indiana are scrambling to open in time for NFL season (we always knew this would be nip and tuck). If all goes as planned, Ameristar East Chicago and Hollywood Casino Lawrenceburg incept on Sept. 1, followed three days later by Horseshoe Hammond. Hoosier Park, Horseshoe Southern Indiana, Indiana Grand Casino & Racing and Winner’s Circle OTB parlors (all owned by Caesars Entertainment) will stagger across the starting line later in September. Others hoping for a September debut are Belterra Resort, Blue Chip and Tropicana Evansville. Rising Star and French Lick Casino are bringing up the rear. Nobody, it appears will open with mobile wagering. When they do, one will not only be able to place prop bets but to wager on cricket, darts, rugby and yachting. That’s a very catholic selection of sports, once you include all the mainstream ones.

* Another week, another casino shooting, this time in Laughlin. The gunman fired on police officers, so we’re confident Las Vegas Metro did the right thing. Elsewhere on the police blotter, police in China busted 41 people for coordinated Internet gambling, a big no-no in the PRC. More arrests may be in the offing.