Thanksgiving is right around the corner and for this edition of SIMPSON on VEGAS, Jeff is going to share what we all (collectively as guests and hotel operators) should be thankful for when it comes to Las Vegas.
Continue reading after the jump and have a Happy Thanksgiving!
Las Vegas casino owners and operators have a lot to be thankful for this Thanksgiving season -- and so do the consumers who love to visit the city's resorts. In this Thanksgiving column I'm going to tackle what both sides have to be thankful for.
Casino owners and operators should be thankful for:
1. A rebounding economy. It may be a slow rebound with a lot of threats on the horizon (unemployment, European debt, Chinese economic bubble, etc.) but GDP has been growing and consumers have increased their willingness to travel and spend, especially on food and beverage.
2. Foodies. The culture has embraced dining as a kind of art, recognizing talented chefs and innovative cuisine concepts and consumers are increasingly willing to spend more of their money on restaurant dining.
3. Nightlife. A visit to a club for dancing and drinking has become the No. 1 way that younger people choose to spend their evenings in Las Vegas, and consumer spending on marked-up liquor and club entrance fees has proven to be an incredible source of top-line revenue that drops cleanly to the bottom line.
4. Celebrity-obsessed culture. The symbiotic link between celebrities who want to stay in the limelight, party and make even more money and the large number of people who care about the famous, the fabulous and the trendy has helped dozens of Las Vegas casino nightclubs tap into the wallets of visitors eager for a brush with or an iPhone photo of celebrities.
5. Convention business. The convention business is rebounding even faster than the regular tourism business -- a very good thing for Las Vegas resorts. The city has three of the country's biggest and best convention centers, not to mention dozens of other convention and conference spaces that allow almost every resort to tap into the significant business, which props up midweek room rates and boosts food, beverage and entertainment revenues.
6. Pool business. Extending food and beverage operations to existing and additional pools and "daylife" operations has proven to be a gold mine for many resorts. Admission charges, cabanas and high-margin F&B sales are generating substantial revenues at pools, which once were considered a necessary amenity -- and expense.
7. McCarran International Airport. The airport, already a smooth-functioning facility that compares favorably to almost all of the country's other busiest airports, is less than a year away from debuting its long-awaited Terminal 3, which will allow smoother domestic and international arrivals and departures as an airport that efficiently takes modern security realities into account. The airport's proximity to the city's resorts and convention centers make it an unmatched travel asset.
8. Nevada's 6.75 percent gaming tax. The gaming tax rate, the lowest around, enables resorts to generate casino profits even in a very competitive marketplace. The rate also offers a tempting advantage to properties with big-betting customers in higher-tax jurisdictions like Macau (almost 40 percent) to lure those players' and their action to Las Vegas, where casinos get to retain a much larger chunk of the money they win. The same holds true domestically on a mass-market scale for companies like Caesars Entertainment and its Total Rewards-based marketing muscle.
Las Vegas resort consumers should be thankful for:
1. Hotel room glut. Rates for hotel rooms at all quality levels have been slowly rebounding but remain well below their 2007 peaks as the market continues to contend with the new supply associated with Palazzo, Encore, CityCenter and Cosmopolitan. One hotel with strong demand is more expensive than its quality should command (Cosmopolitan) but many others remain a relatively strong value (Mandarin Oriental, Aria and Vdara at the high-end -- hmmm, what do those three have in common? -- and Mandalay Bay and Hard Rock in the middle.
2. Calendar-based value. Cost-conscious consumers can maximize their dollars at all levels of the resort pecking order by visiting Las Vegas during periods of lesser demand. In general, midweek rates are much lower than weekends (with the exception of big conventions). Weekends are less expensive when they aren't part of a three-day holiday or connected to high-demand events like boxing matches, UFC fights, Super Bowl, NCAA basketball tournament rounds, Chinese New Year, major concerts or NASCAR races. Certain periods of the year are also relatively slow (during the baking summer heat) or very slow (from Thanksgiving until Christmas).
3. Superior high-end resorts. In addition to the newest properties that compete at the high-end (Encore, CityCenter, Cosmopolitan and Palazzo) there are several properties that have been well-maintained and are excellent top-level options for visitors. I'd rank them like this: Wynn Las Vegas, Bellagio, Four Seasons, Caesars Palace and Venetian. These properties and their many amenities compare favorably to any casino resorts in the world.
4. Excellent mid-level competition. Some of the best values for consumers can be found at the top of the mid-level. MGM Resorts and its "3M" properties top the list: Mandalay Bay, MGM Grand and Mirage, while downtown's Golden Nugget deserves a mention as well.
5. Incredible dining. Almost all of the high-end and best mid-level resorts have at least a handful of awesome restaurants. Cosmopolitan, Caesars Palace, Bellagio, MGM Grand, Wynn/Encore and Venetian/Palazzo are most worthy of note.
6. Casino and hotel makeovers. The best hotels have stayed at the top by refreshing their rooms and replacing stale amenities, but unfortunately some of the middle-tier properties have had to conserve resources during the recession and are looking worn and seedy (Caesars Entertainment's Paris and Rio spring to mind). A few bottom-tier properties rescued themselves from irrelevance with their own refurbishing: Tropicana, Plaza and El Cortez, all three of which seem to have gotten good bang for their bucks.
7. Excellent nightclubs with talented DJs. Some of the world's best DJs are in the city's resort nightclubs, spinning a variety of styles of club music. Almost all of the city's top properties have at least one club; several hotels have more than one. Clubs close and then reopen with new names and decor all of the time and the best clubs' time at the top is often fleeting, but the growing number of people who like the club scene should be able to find places they'll enjoy.
8. Sports-betting. Las Vegas sports books are an unrivaled casino amenity -- no other casino city in the world comes close when it comes to the high-energy buzz of a great book during the NCAA hoops tournament or NFL playoffs. Sports fans or sharp bettors who enjoy legally betting on a game or several games know what I'm talking about.
9. Poker. Las Vegas may not have the biggest poker venues in the world (those are in L.A.) but it has most of the best. Bellagio, Aria, Venetian, Wynn Las Vegas, Caesars Palace and the Orleans provide all of the cash-game and tournament action poker players demand. The city also hosts the biggest tournament series on earth, the World Series of Poker, as well as several other top tourneys.
10. Retail. Las Vegas has a spectacular array of ultra-high-end, high-end and mid-level retail tightly grouped in the Strip corridor, not to mention an impressive duo of outlet malls a few miles north or south of the tourist center. Shopaholics will find it easy to feed their need on a Strip visit.
-- Jeff Simpson, November 2011