LuckyPhow
LuckyPhow
Joined: May 19, 2016
  • Threads: 48
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September 29th, 2018 at 11:45:31 AM permalink
The Vegas "Value" Problem

Several recent threads have bemoaned the many casino changes that nickel and dime gaming patrons. Rule changes that increase the house advantage (HA). Parking charges. Resort fees. Diminished comps. And, the list goes on and on.

I found this article by Jeff Hwang slam dunks the problem, using Caesars and MGM as primary examples, but also including raw data about Vegas visitor -- both gaming and convention -- trends. A few tidbits:
Item Table Text (Because bulleted & numbered lists aren't working!)
1 The increasing focus on luxury, high-end properties, "may impact visitor volumes into the future by pricing out the low-end (the more populous end) of potential visitors."
2 Ongoing efforts to increase the HA (noted above) through gaming rules and increased non-gaming costs exacerbate the problem, noting a 2.89% drop in non-convention visitors in 2017.
3 Convention visits fell 3.08% for Jan-Jun 2018, the first decrease since 2010. Casino policies, Hwang argues, are killing the goose laying golden eggs, as gaming more and more becomes a "mature" industry.
4 Quoting another study, Hwang calls attention to Caesars Entertainment and MGM Resorts International both reporting soft numbers for 2Q2018, and each predicting "more headwinds" going forward.
5 The effort to attract millennials has caused Vegas to ignore outreach to the low-budget gambler, while pushing high HA ďskill-basedĒ games.
6 Hwang concludes by noting the persistent rise in the house advantage of gambling games, the ever-increasing prices, and the constant nickel-and-diming on the Las Vegas Strip are fundamentally weakening the overall Las Vegas product.

The article also discusses sports betting and the need for "congruency" (NOT saying one thing and doing another). A good well-written read, if you like this kind of thing. Enjoy.
FleaStiff
FleaStiff
Joined: Oct 19, 2009
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September 29th, 2018 at 12:07:18 PM permalink
I like to use comparisons to the restaurant industry because even though names may vary geographically everyone has experience with some of these chain restaurants and their policies.

Many restaurants would insist waitresses push sides and push deserts to increase the per check totals. So instead of having a pleasant breakfast of what you wanted you had to endure constant chatter from the waitress and many people gave in to the oversell of a side of this or that or a slice of pie as a desert or something. Sure the restaurants made more money but they annoyed their customers. Such focus on the short term destroyed their customer base.

Its the same way with casinos. They wanted the 'carriage trade'. Oh, not the whale, but the guys who dropped some real money on the table. So the black chip players were welcome the red chip players were clearly less valued and knew it. Red chip players had to go in search of fundamental appreciation. They didn't find it.

Sure some casinos became known for mobility carts, oxygen tanks and geritol-comps but in general the entire demographics changed as casinos closed down their 'player's schools' and limited themselves to fifteen minute lectures for newbies. Well, you do that and yes: you lose that next generation but casinos did not care they were focusing on trendy restaurants and trendy bars and trendy this as well as trendy that.

Everyone was focused on the short term. Casinos did not 'invest' in players. Well if that was the attitude casinos took towards players what on earth do you think the players felt about the casinos? Loyalty? The casino tries to ream me, I'm going to try to ream the casino. Comps get eroded, so does customer loyalty. Customers come back a few years later and say to themselves 'why should I go get reamed at the same casino, I can go get reamed elsewhere and it can't be worse'. So yeah, customers when to different casinos and then even different cities.

What did the casinos expect when they abandoned a large segment of their market?
ThatDonGuy
ThatDonGuy
Joined: Jun 22, 2011
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September 29th, 2018 at 1:36:08 PM permalink
Quote: LuckyPhow

The Vegas "Value" Problem

Several recent threads have bemoaned the many casino changes that nickel and dime gaming patrons. Rule changes that increase the house advantage (HA). Parking charges. Resort fees. Diminished comps. And, the list goes on and on.

I found this article by Jeff Hwang slam dunks the problem, using Caesars and MGM as primary examples, but also including raw data about Vegas visitor -- both gaming and convention -- trends. A few tidbits:

  1. The increasing focus on luxury, high-end properties, "may impact visitor volumes into the future by pricing out the low-end (the more populous end) of potential visitors."
  2. Ongoing efforts to increase the HA (noted above) through gaming rules and increased non-gaming costs exacerbate the problem, noting a 2.89% drop in non-convention visitors in 2017.
  3. Convention visits fell 3.08% for Jan-Jun 2018, the first decrease since 2010. Casino policies, Hwang argues, are killing the goose laying golden eggs, as gaming more and more becomes a "mature" industry.
  4. Quoting another study, Hwang calls attention to Caesars Entertainment and MGM Resorts International both reporting soft numbers for 2Q2018, and each predicting "more headwinds" going forward.
  5. The effort to attract millennials has caused Vegas to ignore outreach to the low-budget gambler, while pushing high HA ďskill-basedĒ games.
  6. Hwang concludes by noting the persistent rise in the house advantage of gambling games, the ever-increasing prices, and the constant nickel-and-diming on the Las Vegas Strip are fundamentally weakening the overall Las Vegas product.

Numbered lists seem to work fine when I do it, unless you're talking about that vertical line, which appears to be a "feature" of the board; it even shows up on the Formatting Codes help page.

  • Let's see if bulleted lists work as well

  • Signs point to yes

As for the reasons why visitor counts are down, one reason might be, there has been a crackdown on companies - especially Federal agencies - having their conventions or other meetings in Vegas. A GSA "conference" held at The M in 2012 (and reported as being held "in Henderson" as opposed to "in Las Vegas") led to a major change in policy concerning how much could be spent on conferences and travel.

Another problem might be, if most of the people live in the east, having a convention way out west has problems. Ever hear of GenCon? It's probably the premier gaming (as in boardgaming, role-playing, and so on - not "gaming" as in gambling) convention in the USA now. It is held annually in Indianapolis, and just as annually are the complaints that the number of attendees far exceed the number of hotel spaces even remotely considered to be within "walking distance" of the convention center. Quite a few people claim that the convention has outgrown the city, and it needs to be held somewhere with much more hotel space, and invariably, Las Vegas is at or near the top of the list. However, the primary argument against it is, most of the people that attend GenCon live to the east of Indianapolis, and holding it that far west would be a hardship, especially to those who could no longer drive there. (There's also concerns over the welfare of the younger gamers, but that's secondary.) What never comes up as a concern is the lack of 3-2 blackjack.
billryan
billryan
Joined: Nov 2, 2009
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September 29th, 2018 at 2:27:39 PM permalink
The counterpoint to that is it is cheaper and easier to get to Vegas by air from almost everywhere than it is to get to Indianapolis or other cities.
mcallister3200
mcallister3200
Joined: Dec 29, 2013
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September 29th, 2018 at 2:54:16 PM permalink
MGM properties in particular donít even try to hide their just trying to fleece you as badly as possible on your trip, provide zero value, and no focus whatsoever on player retention/reinvestment. $40+ resort fee will not cover parking, or coffee maker in the room. No comps. Bad rules. Why would anyone bother?
billryan
billryan
Joined: Nov 2, 2009
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September 29th, 2018 at 3:22:52 PM permalink
Is there any tax advantage to collecting a resort fee as opposed to higher room fees?
Resort A sells 1,000 rooms at $100 each. Resort B sells 1,000 rooms for $60, with $40 fees on each.
Is there a difference in how the $100,00 is treated for tax purposes?
TigerWu
TigerWu
Joined: May 23, 2016
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September 29th, 2018 at 3:29:52 PM permalink
If you use Mlife or Total Rewards credit cards you can easily build up comp points to help mitigate things like resort fees and the like.
onenickelmiracle
onenickelmiracle
Joined: Jan 26, 2012
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September 29th, 2018 at 4:53:36 PM permalink
Quote: billryan

Is there any tax advantage to collecting a resort fee as opposed to higher room fees?
Resort A sells 1,000 rooms at $100 each. Resort B sells 1,000 rooms for $60, with $40 fees on each.
Is there a difference in how the $100,00 is treated for tax purposes?

Possible, but supposed to only be done for search ranking on travel sites by lowest price, but could be outdated by now.
#FreeNATHAN #Paytheslaves
Sandybestdog
Sandybestdog
Joined: Feb 3, 2015
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Thanks for this post from:
onenickelmiracle
September 29th, 2018 at 7:50:46 PM permalink
The comp rate at most strip casinos in my experience is actually pretty good. I think MGM is about $280 coin in for $1 in comps. On the east coast itís about $500 for a $1. The problem is most Vegas casinos donít give any good freeplay. Theyíll give you a free room and maybe $200 resort credit but not much more than that. At least thatís my experience.

One problem that I find very annoying though is most places inside the casinos donít actually take comps. Itís ridiculous. You earn comps and can only use them to buy food even though the stores are in the casino.

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