RSS FeedThe economy and room rates
Hey, they’ve finally posted my latest piece in the Las Vegas Business Press. Here’s a taste:
The economy, as the blurb that crawls across your television screen says, is bad. Really bad. And don’t you forget it.
For those dealing in luxury goods and services, the perception of an economic decline is just as ruinous as its reality. Whether or not we’re in a recession (not, since we haven’t had two consecutive quarters of negative economic growth) doesn’t really matter. If people believe that they need to tighten their belts, they might be disinclined to splurge.
Here in Las Vegas, the past 20 years have seen a shift toward the luxury-end of the travel market. Does this mean the Wynns, Lannis, and Adelsons who’ve ramped up the luxe factor — and their room rates — made the wrong decision? Not at all, because in an era of casino proliferation, cheapness and convenience are no longer compelling reasons to visit Nevada instead of, say, Barona resort in California or the Horseshoe in Tunica, Miss.
Regardless of whether recession is real, perceptions affect behavior
Seriously, it’s like the national media is rooting for economic decline–that’s all you hear about.
I was inspired to write this after reading the piece in Vegas Tripping 3 weeks ago about the Sahara’s “spin the wheel, make the deal” promotion.
If ripping off of Halloween Havoc 1992 can’t buck up the visitation stats, we’re really in deep trouble here.
Posted in business of gambling
June 20th, 2008 at 3:31 am
With all the new properties coming, and all the former top/upper middle tier properties upgrading nearly everything (ie. MGMMirage’s capex for non-CityCenter properties) it’s almost like a completely brand new Vegas is being built - although the buildings by and large are staying the same.
Countless words have been expended in the hopes of prognosticating how the resort pecking order will shake out, but we’ll probably only know when the bean counters publish their spreadsheets based on how tourists vote with their dollars. I’m beginning to think that Harrah’s decision to skip this round of resort botox (other than a few shots here or there) will insert many bargain hunting, Luxe agnostic visitors streaming into the Total Rewards database.
Is the desire to experience the latest and greatest greater than the power of a faltering economy sending visitors to the Trop, Riv, Strat & Sahara.