Two Way Hard Three | Las Vegas Casino & Design Blog

December 31, 2009

Vegas Gang #42 - December 31st, 2009

Posted by Hunter

This time on the show:

* CityCenter Opens
* 2009 Recap/2010 Look Forward
* Gary Jacobs and MGM Mirage

Have a Happy New Year. We love you.


Read archived comments (26 so far)
January 1, 2010 6:55 AM Posted by atdleft

You love me? You really love me? Well, it's nice to know I'm loved... Especially after I had to miss my date with Bette. :-(

Oh, well. Happy New Year, everyone!

January 1, 2010 12:33 PM Posted by atdleft

And btw, does anyone know why the site is down again? All I'm getting is an error message from Cox, one as if the site doesn't even exist.

I'm listening to the podcast right now.

January 1, 2010 2:39 PM Posted by mike_ch

Working for me.

I suggest, especially if you're using one of the big multi-regional ISPs like Cox in LV or Comcast in other areas, trying Google's Public DNS service because while it's still not totally finalized, websites have less of a tendency to blip out of existence the way they do on Cox's DNS.

I feel like my page loads are just tiny bit quicker as well, though I reinstalled WIndows the other day so it's too hard for me to say.

January 1, 2010 3:54 PM Posted by MattK

The resort fee is indeed all about shifting the cost of a room to a place where Orbitz can't take a hefty commission, and the State of Nevada can't demand 12% room tax. If Vegas hotels could, they would charge $1 for the room and a $99 resort fee. To some extent, yes there is a benefit from being able to advertise a lower room rate, but that is certainly balanced by the money you lose when incensed guests successfully dispute the fee. (Try telling a guest in January that his resort fee gives him unlimited access to the pool). But my advice to any Vegas regulars is to learn to love the resort fee. Because it actually does keep costs down. If the resort fee was eliminated and the cost was baked back into the room rate, then a) rates would be higher to compensate for a higher proportion of your money going to Expedia, and b) you'd pay more in room tax.

January 2, 2010 6:04 AM Posted by detroit1051

The Gang's discussion of tiered hotel rates was very interesting. Dr. Dave mentioned his upcoming LV Business Press piece on the potential for Vegas resorts to move toward all-enclusive pricing, similar to cruise ships.Wouldn't that work better at the high end? I've always thought that value conscious customers want the adventure of moving from property to property during their visits and trying different casinos, buffets and shows.
Doesn't the prix fixe concept fit much better at the high end, especially in Las Vegas. It's what sort of occurs with heavy players who are comped. They know that they will be well taken care of if they spend most of their time in one property and are given the best restaurants, spa, shows, etc.
CityCenter, as one entity, could do well offering prix fixe packages to high-end non-gamblers if there is sufficient coordination between Aria, Vdara, MO, and Harmon managements. Great restaurants/bars and spas all within walking or tram distance. MGM better not drop this one. It could work very well. They just need look at their comp model for big players.

January 2, 2010 6:41 AM Posted by mike_ch

I don't really think CityCenter wants to run as one entity. I do believe that Vdara's operation as a boutique hotel that is operating exclusively from Aria is something of a concept idea that might not stay if it's unsuccessful. In other words, if nobody stays at Vdara, I wouldn't be shocked if the tower is retitled "The Lofts at Aria" or something along those lines and their offices are merged. But in the case of MO and Harmon, they are deliberately trying to run them

It's pretty clear at this point that The Light Group will pretty much run their operations however MGM Mirage wants them to, so Harmon could be part of a package deal someday if MGM gives up on the boutique thing. However, the Mandarin Oriental group probably sees themselves as taking a chance in Vegas (despite efforts by Wynn and some others to class the town up, LV is still not exactly a prestigious destination to their target audience) and if MGM tried to corral them into taking bargain deals with Aria and Vdara it would make them bad hosts, if you know what I mean.

Even though they simply don't have the massive facilities that the casino hotels do, MO's operations are probably pretty expensive and they'd probably prefer to just have an empty room than fill it with someone at a rate so low that it destroys their margins.

January 2, 2010 7:35 AM Posted by Dave

And just to think that this episode should give us the answer to life, the universe, and everything. If only we knew the question.

Detroit, I think that you're right about the prix fixe working better at the high end. If you could build some sort of comp experience into room rates for customers who don't gamble much but want the Vegas feeling, you'd be giving visitors something they don't usually get, which is what you need to do to get people to come to Las Vegas.

Imagine how well this could work at MGM Mirage: let's consider a three-night stay. Let the visitors pick two shows, three fine dining dinners, two buffets, and a $50 casino credit to give them a reason to visit the casino. They can use these at any of the properties. Price them so that the company doesn't lose money on the deal, but the visitor has an incentive to do this. Throw in gym access, a credit for spa treatments, internet, and whatever else you want. As with cruises, alcohol and gratuities are not included.

You've not virtually guaranteed that your visitor will spend most of his/her time at company properties. If he/she does gamble, it will almost certainly be at one of them.

This is basically taking the old-fashioned coupon fun book that Jackie Gaughan introduced downtown to the next level. Fun books really caught on the early 1980s, when economic conditions were also pretty dire. So maybe there's something here.

January 2, 2010 8:34 AM Posted by Hunter


January 2, 2010 8:44 AM Posted by atdleft


Interesting thoughts. Now let me add my $0.02 to yours. :-p

If any CityCenter resort emerges as a real breakout star, I think it might actually be Mandarin Oriental. After all, their condos were the first (and I think only) to sell out... And their brand has become so synonymous with "unparalleled luxury" that MO fans that their super-rich customer base won't mind paying more for the "MO experience". I also think Steve Wynn and (to a lesser extent) Sheldon Adelson have done enough to "upscale" the Las Vegas identity to where MO was finally willing to open a hotel here (and BEFORE they opened hotels in LA & Chicago!) and those luxury travelers who would have frowned upon us 10 years ago, or even just 5 years ago, may now be willing to give us a try with something like a MO in town.

And yes, IMHO I think it would be worse for MO to lose its "unparalleled luxury" identity by toying too much with pricing (though it can probably get away with what MGM is already doing at Aria, or possibly what I'm about to describe below...).


I know I risk sounding like I've been "assimilated into the borg" of the big broken record, but...

Wynn is already playing with this with a "B&B package" (breakfast in bed included), a golf package, a spa package, a "suite life package" (comped car service, internet, phone, spa passes, etc.), a dining package... And of course, the now famous "jetsetter getaway" with a flight from OC or Burbank on a 50-seat plane included.

IMHO, Wynn may be starting another smart trend that MGM Mirage and Harrah's would be idiots NOT to consider doing for their high-end properties. And since they have more casinos, they can benefit even MORE from this. I'm sure guests at Caesars wouldn't mind paying for a package that includes Qua spa credits, 2 tickets to Barry Manilow, and perhaps dinner for two at Eiffel Tower, just as guests at Aria wouldn't mind paying for a package that includes dinner for two at Twist, 2 tickets to "O", and perhaps two day passes for Mandalay's Moorea Beach Club or Shark Reef the following day.

January 2, 2010 8:48 AM Posted by kage

i think the real key to Dave's point is when you look at how aria keeps talking about conventions. (murren specifically mentioned virtuoso, presumably re moving travelmart from bellagio.) group contracts include free stuff, even if its just a rate discount.

we have also already seen marketing with hotels offering credits for use at other hotels.

what is most interesting to me is that aria and vdara have not joined any travel consortium yet. (virtuoso etc)

MO did the 2nd night free opening promo, but american express centurion cardholders also receive 1 free night per year, in addition to upgrade at booking, etc. that will certainly be one major attraction, even if it includes people who just want the deal, in addition to those who will spend a ton.

other random thoughts >
vdara is closest condohotel to strip
MO competes with FS
harmon will compete with thehotel & palms place

January 2, 2010 2:35 PM Posted by Dave

atdleft--imagine Steve Wynn saying this:
"Hi. I'm Steve Wynn. We are the Borg. Lower your shields and surrender your ships. We will add your biological and technological distinctiveness to our own. Your culture will adapt to service us. Resistance is futile."

January 2, 2010 5:51 PM Posted by Kenny

The Tropicana finally started the facelift on the Tiffany (paradise) tower
-Also they are using their awesome new logo on Wayne Newton show tickets

January 2, 2010 8:15 PM Posted by John

Hitchhiker's Guide, Hunter?

January 3, 2010 7:18 AM Posted by mike_ch

I'm still catching up on this podcast but you guys were almost psychic in the one from October where Chuck calls the casino dark, and Hunter and Dave speculate on whether to slap Jim Murren's face on the project. He seems to have gone ahead and done it in a bit of a more reclusive way than Wynn, he probably figures if CityCenter fails then he's going to fall on the sword for it anyway. It doesn't really raise any stakes for Murren to go to the press and say, "please come see this" because he was all-in to begin with.

I just wanted to comment about that episode because t was pretty enlightening, especially Jeff and Dave going on about architecture. I'd say the Strip architecturally interesting in so far that you look at the entire Boulevard from Sahara (we'll throw Stratosphere Tower in from a distance since it's designed to be seen that way) to Russell and you see the entire thing and you go "hm, that's really quite interesting." But if you look at each individual hotel, they're all essentially a great big building with a lot of fun, colourful doo-dahs hanging off of them.

Big City folk who I invited before the recession were never very interested in, say, Bellagio, because to them it was basically a big box with some domes bolted on for decoration and a lake dug out front. Aria probably isn't going to excite those who simply would never gravitate to a hotel-casino building to begin with simply for it's function, but those who aren't completely casino-averse can respect the design.

Is it really urbanism? Not really, it's the themes of urbanism applied in the same sort of themed manner that Venetian attempts to have canals or Mirage has a volcano. For instance, the pocket park is an attempt to provide a public space, but it has the same failing as any private development's plan to simulate phony public space (the kind that LOOKS like civic property but there's no homeless sleepers or political protest slogans allowed) in that it always comes off as condescending. That's nothing new for Vegas, those same attacks have been directed at developments like The District and Town Square, both of which try to simulate an organically grown community downtown all at once, in one big construction project by a big company.

I have a lot more comments to spill out here but am saving them for a StripWalk, but I want to conclude by saying that I think MGM-Mirage is kind of lucky that the Cosmopolitan looks the way it does, and could be so easily confused for part of CityCenter itself. I would like to also mention the Panorama Towers across the Harmon overpass and how their towers compliment it as well. In fact, if you look at Panorama, you see they built two towers that look like reflections of each other on the south side of Harmon which pre-date the CityCenter skyline rising out of the ground. But the one north of Harmon, built much later, looks very different from the other two and has a lot of the striping and angular look of Vdara and Aria. It's as though the Panorama people saw CityCenter going up and said "Huh, okay, we can do that too." And that one is what you see basically straight ahead of you when looking west down Harmon from the Strip, so sidewalk people ARE going to see it in the midst of CityCenter and Cosmo buildings.

If Cosmo looked like something else, or Panorama had gone with the "giant Spanish villa" look that's so popular in Vegas, CityCenter would look kind of like this odd duck that's sitting there alone in the middle of Las Vegas. Because the building immediately north of it and the buildings west of it went for the same sort of look with the glass and steel, it makes it look like it's larger than it is, that it goes over I-15, or that there's a little Modern Design Revolution spilling out of the corner of LVB and Harmon the way Mirage caused almost everyone on the Strip to react to it.

MGM has been lucky in that the properties immediately around them have chosen to play along with what they were trying to do, or had their own plans that gel with CityCenter's. It would be a shame to have something like the Hilton Grand Vacations building in the spot where Cosmo is.

January 3, 2010 7:49 AM Posted by detroit1051

Regarding cruise ships and all-inclusive resorts, this story talks about how cruise lines are moving away from all-inclusive toward a la carte to generate revenue. Sorry the story sounds ln large part like a PR piece for Sandals, but it probably is.

January 3, 2010 10:09 AM Posted by kage

"all-inclusive" is usually defined as including alcohol and tipping.

seabourn, seadream, regent are examples of all-inclusive luxury cruiselines.

most of silversea's ships are similar, albeit with wine restaurants for those who want to do more expensive wine pairings. but their latest ship has a regular restaurant that you have to pay for. epic fail.

there are also all-inclusive luxury resorts. (not sandals) they range anywhere from safaris/etc to private islands to mountain lodges.

January 3, 2010 2:11 PM Posted by ooo000

I'm personally not a fan of all-inclusive models because it limits your scope... to explain... if I'm paying for an all-inclusive experience at one strip resort, it keeps you in a bubble because you have to get your moneys worth at that resort. So the exploration and wandering that makes Vegas interesting is pretty much eliminated. Plus, I might want a cheap lunch and fine dining for dinner, or just a cheap bed to crash in after an expensive night out. To me, all-inclusive means you're going to get a single level of quality across the board, whether it be low, mid, or high end. The resort loses motivation to offer anything special after you've paid up. Ultimately you're going to pay for what you get either way. I'd rather have the freedom to control my own costs and skimp and splurge as it meets my personal tastes. I think the current model of resort credits is the appropriate balance. I would like to see small discounts or incentives for patronizing places like nightclubs and restaurants in the same hotel though.

January 3, 2010 4:28 PM Posted by mike_ch

I don't entirely agree with ooo000 (fun name) but I do have to throw out a word of warning if you'll allow me to bring up my Disney knowledge again to make point: the all-inclusive thing reminds me of Disney World's all-inclusive dining plan, where the customer pays a flat fee per person and receives a certain amount of credit per day, and all the restaurants and even food carts property-wide are tiered and wearing little plaques whether they're counted as fast food or restaurant or snack credits.

Disney Dining Plan (DDP) has kind of wrecked the spontaneous dining of Disney World. First of all, the reservations system allows "Table Service" (Disneyspeak for restaurants) to be booked about six months in advance, even longer for Disney's hotel guests. So people are calling in as soon as the call centre opens six months in advance to set reservations, something that used to only happen at really unique restaurants like Cinderella's Royal Table (the castle steakhouse.)

Because DDP gives you a certain amount of credit to various restaurants, people feel they need to get their money's worth and if their preferred restaurant is booked solid then they will book just about ANY restaurant. This means people book restaurants they're not really interested in and then when they get there complain that the place doesn't serve anything they like.

This has resulted in homogenization of the menus, as now even places like Les Chefs du France in Epcot, which is supposed to be French food served as fancy as you can allow in a Disney park, has middle American comfort food in the menu. Because people with DDP who didn't want to be there booked the place up after something else wasn't available, and then complained that the cuisine isn't steak and potatoes enough for them.

Last of all, even if you *do* manage to get a chair at a restaurant without reserving well in advance and are paying out of pocket instead of with DDP, there's a growing sensation of what ooo000 described: The restaurants just aren't trying anymore. So many of their guests have plopped their money down beforehand and are now simply cashing in rebates that they already paid for, that the restaurant feels like the company already has taken their dining money and there's no reason to actually go out of their way to give the customer a good experience.

So yeah, I'd be really wary of the all-inclusive packages. I think Steve Wynn just wants to make sure that people staying at his property for the rates that are lower than what he wishes for, still give him some good margins by paying for some additional food and bev. And if they don't actually redeem elements of the package, then the company basically pockets the difference of not having to have it made.

January 3, 2010 6:19 PM Posted by Dave

This is why it should be a tiered model. Just like the price of the prix fixe menu is going to be too much for some people, I'd guess that not all guests would want to get the highest-level package.

Remember, most of the people on this board know Vegas inside and out. There are a lot of people who don't, particularly corporate travelers. Let's say you're booking a group for incentive travel. Giving them the option of a package makes it much more convenient for the planners. Instead of running around making reservations at restaurants in different hotels, they just buy a bunch of these packages and let things work themselves out. So this might work better for business travelers than FITs.

One of the points that I think is important is that you can't have a one-size-fits-all approach to the business anymore. You need to accommodate more adventurous and flexible people as well as those who like to travel but want things taken care of for them.

It's all personal preference. I've gone to plenty of conferences and tried to explore the host city; some people just eat at the hotel restaurant everyday and never set foot outside. Vegas operators have to give both options.

January 3, 2010 6:32 PM Posted by Paolo

Another great installment of Vegas Gang. The tiered-pricing system is interesting, Dave, and I think it could work during certain times of the year if any operator was gutsy enough to pull it off.
I agree with Hunter's points about MGM not using more PR communication to help market City Center; I'm surprised they haven't released foot traffic numbers, occupancy numbers, etc. etc. Unless, of course, it's because they are too gruesome. But that said, I feel like there is a lot of free marketing and advertising that they are missing out on. And those commercials were awful, too. Anyone know which ad agency handled the City Center account?

January 3, 2010 8:43 PM Posted by Jason Robar

atdleft, MGM has actually done that for a while.

Mandalay Bay promotions:

Bellagio promotions:


Many of the locations don't have the variety that Wynn is offering, but at the same time they do have them.

January 3, 2010 8:46 PM Posted by mike_ch

Dave: Well, in my example, DDP stopped being a net benefit to the customer after some revisions in 2007 after it stopped including gratuity. As soon as those changes were made, regular trip-planners started doing the cost benefit analysis and said that it wasn't worth it anymore. But that hasn't stopped a lot of tourists who don't know any better, or are simply more interested in the convenience, from picking up the plan.

What I've always felt Disney needed to do, dining plan or no dining plan, is to start holding some tables in restaurants for walk-up traffic even if that means less reservations can be taken per day. The effect you feel there right now is that all restaurants in parks and hotels alike are booked full with people who planned every minute detail of their vacation six months ago (remember to get to a park restaurant you have to have park admission, so people were planning what theme park they were going to be at in which time half a year before they even got on the plane), and you're held captive in this company town on the Orlando outskirts. So not only are you unable to eat where you want to, but it's been made deliberately difficult to leave.

If you had something like what had been discussed in terms of CityCenter hotels sharing resources with each other to make these big package deals, you'd need to do something along those lines, because the last thing you want is people staying outside CityCenter coming into the hotels for a night out, and seeing that Twist has no tables and that Beso has no tables, and making their way into Aria to find that their only options are Cafe Vettro and the Buffet.

January 4, 2010 3:51 PM Posted by Craig

Just received the following. It seems like a broad use of the resort credit although it only applies to Aria. (Am I the only one that is not impressed with the 15% offer? Wonder how effective that marketing tool really is for a hotel)
"To celebrate the grand opening of ARIA, we would like to share with you this limited time offer of 15% off room accommodations plus a $75 resort credit. Use your resort credit to experience exceptional cuisine by award-winning chefs, extraordinary treatments in our spa and salon, and the new production Viva ELVIS™ by Cirque du Soleil®, a tribute to the life and music of Elvis Presley."

January 5, 2010 10:12 AM Posted by kage

"Other hot spots were hit harder, making New York America's No. 1 destination for the first time since 1990, the mayor said. For nearly two decades, that title was held by either Las Vegas or Orlando."

January 11, 2010 5:01 PM Posted by detroit1051

Dave Schwartz's piece in the LV Business Press is up. The $32.02 figure is interesting. Not much flexibility for low-end properties.

March 11, 2010 12:01 PM Posted by Ted

I Visited City Center for the first time about two weeks ago.
Two observations:
The main floor of Vdara has all the warmth & charm of the Los Angeles Convention Center. I actually felt like I was walking through a convention center instead of a hotel.

With 8 billion out on this complex and only one casino, how does MGM possibly expect a return on investment before the next ice age?