Casinos lower prices to pump up business - Thursday 26th of February 2009
With December and year-long revenue results expected to be posted this week, Nevada’s gaming industry has been forced to deal with sharp declines in casino revenues and hotel occupancy.
According to the latest estimates, casino revenues were down about 10 percent from the previous year, the first year-over-year decline in the state’s history.
The number of visitors to Las Vegas declined about 4 percent, while hotel/motel occupancy slipped to under 80 percent in November and December, according to year-long estimates.
While most of the trends can be attributed to a U.S. economy in recession, financial woes were compounded by skyrocketing vacation costs fueled by the advent of high-end resorts.
"A typical Las Vegas vacation – once centered around gambling and generally including relatively cheap hotel rooms, food and entertainment – became a relatively expensive vacation when the dramatically higher cost of rooms was factored in," said analyst Matthew Jacobs of Majestic Research in its latest Consumer Health report. "Therefore, beginning in mid-2007, we believe that the value-conscious, mass-market visitor began to be priced out of a Las Vegas vacation, while the high-end customer appeared to be less affected."
The trend toward higher room prices and costs of amenities such as dining and entertainment hasn’t gone unnoticed by astute casino operators, who have cut room rates and other costs to levels of about a decade ago.
Last week, for instance, a visitor could have booked a hotel room on the Strip for under $100 a night: The Mirage offered rooms at $90, the MGM Grand at $75 and Mandalay Bay at $89.99.
"People are more value conscious and we’re ensuring we provide that value," said Jeff Eisenhart, vice president of leisure sales for MGM Mirage, which owns the Mirage and MGM Grand resorts. "There is a tremendous amount of value and experience at all price levels."
Eisenhart added that "value" extends beyond just the price of the rooms. At the MGM Grand, for example, package deals include free passes to Studio 54 nightclub, a 25 percent discount on spas and a $35 activity credit.
Another MGM resort, New York-New York, is offering deals that include two-for-one roller coaster rides, spa passes and free room upgrades.
For the truly budget conscious, Circus Circus is offering rooms at $25 a night, according to its website, plus a free coupon "fun book" with $100 in additional savings.
Up and down the Strip, many visitors are finding a variety of dining discounts, buffet passes, free drink offers and even slot machine credits.
"For frugal travelers, Las Vegas is suddenly a sure bet," writer Matt Gross noted in the New York Times.
"I think Las Vegas provides a great deal of value, especially if you’re looking at a four or five-day getaway," added Duncan Bureau of WestJet Vacations. "It certainly is a market that is great for deals."
In addition to bargain-priced rooms and amenities, Strip resorts are trying to jump start casino revenues, which have been surpassed in recent years by non-gaming revenues.
People who gamble at any level – even at the penny slot machines – can sign up for free player rewards cards, which offer a seemingly never-ending array of special deals and promotions.
Just signing up for a card often entitles the player to a free buffet or slot play, depending on the casino.
As the effects of the recession continue to impact tourism, look for more casino operators to roll back prices in an effort to bring back the value-conscious customer, someone who might have been overlooked the last couple of years.
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