Monday, August 24, 2009

Monday Open Forum: Are the Luxury Strip Properties Self-Defeating?

(This is the first in what I hope can be a weekly gathering where we can talk business, pleasure, the arts, food, or whatever else we want to talk about here.)

Today's Sun piece on the four and five-star Strip casinos reducing their room rates really got me thinking. Is it all just too good to be true? Or just bad business?

I first remembered my trip here in March:

When I was still in the process of buying my condo in March, I needed a hotel to stay. I was first thinking of getting something closer to Henderson, but I couldn't help myself when I found a suite at Encore going for $120 per night via This was my dream come true, and I FINALLY had the power to fulfill it!

For five days and four nights, I had one of the best weeks of my life. I ate at places like Sinatra and Daniel Boulud. I saw Le Reve. I partied at Blush. And of course, I FINALLY had a chance to laugh at the folks paying the same or more for inferior rooms on The Strip. ;-)

The article is quite correct about those of us who shop around for low rates at high-end properties. But contrary to what some the commenters are saying here, most of us online bargain-hunters aren't the typical "discount travelers". I actually put much of my hotel savings back into the local economy as I was able to afford luxuries like 5-star restaurant meals, more souvenir gifts for the family in California, and more gambling money. IMHO these Vegas hotels are now offering rooms at something closer to fair market value than ever before.

I know that the hotels will eventually raise rates again as the economy recovers and the desire to expand profit margins returns, but now really is the best time to see the best of Vegas at shockingly good prices. If I weren't already a Henderson homeowner, I'd probably be grabbing one of those $109 per night suites at Mandalay Bay's THE Hotel!

I know not all travelers, especially people who travel here, do as I do. I'm one of those odd ducklings that prefer to spend my hard-earned money on real meals and shows than on a "one-armed bandit". Maybe I am part of the problem. But then again, I at least spend some cash on food and entertainment. What about those travelers that don't do the restaurants and shows that have truly made this town great?

But ultimately, we the consumers can only be blamed so much for this problem. Ultimately, the casinos need to accept some responsibility for getting us into the dilemma. We can argue over whether or not Vegas has gone "too high-end" (for the record, I don't think so), but we can at least all agree that we should at least be getting our money's worth.

Here's another of my comments:

The megaconglomerates [Harrah's and MGM Mirage] have taken The Strip and turned most of it into a somewhat generic experience. So many of the casinos don't seem to have any character these days. While I'm certainly not one of those folks who wish for the "Old Vegas" days of mafia rule, cheap & crappy food, and rigid racial segregation, I can see how "New Vegas" hasn't always lived up to its promise with lame players' club benefits, low payout table games, "skin tight" slots, "celebrity chef" restaurants that are all celebrity and no chef, and once-overpriced rooms at the mid-range places that even Motel 6 would be embarrassed to call its own. (Hint: Don't ever stay at Harrah's or Imperial Palace! At least save up a few extra bucks to go to The Rio.)

The key here is value. I can't speak for all of you here, but I can say for myself that I don't mind paying for something good so long as I know it's truly good quality. Don't make me fork $100+ for a dinner for that I could have had at the neighborhood diner for 1/3 of the price. Don't expect me to spend more than $20 at the slots if I know all of that will just be flushing it down the drain. And for goodness sake, don't expect me to pay $10+ for a cocktail with cheap liquor!

I hope the "independent" casino bosses like Steve Wynn and Phil Ruffin still have enough sense in them to rethink "New Vegas" in a way that will really bring the consumers back and get them spending again. People want value. If we're paying a premium for "five star cuisine", that meal should knock my socks off. If we're paying for a luxury hotel, I want room to roam, a comfortable bed, and a big enough tub for me to enjoy a nice bubble bath. If I'm paying, I want real bang for my buck!

Yes, I know Steve Wynn isn't really the great political mind he thinks he is. But hey, we must admit that he knows how to run casinos well. Wynn and Encore are the crown jewels of The North Strip. And hopefully with the new promos he's trying at his properties, such as "Taste of Wynn" prix fixe menus at the restaurants and reduced room rates, along with amenities we expect from a good hotel/casino, like comfortable rooms, quality dining, and great entertainment, he can help in rethinking The Strip.

So can Phil Ruffin. He just took over TI from MGM Mirage, and so far things are going well. Perhaps if MGM Mirage and Harrah's had avoided taking on too much debt as he did, they wouldn't be in such dire straits.

So maybe with better corporate governance and more value being provided to consumers, The Strip will still be able to revel in all its luxury. Or maybe not? Got any ideas on what to be done to make those luxury Strip casinos make money again?

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