Destiny on the Strip

If you haven’t read it yet, here’s a link to my latest from the LVBP:

But craps players and conventioneers both, even if they know of the efforts made by designers to craft a green building, are more likely to care about other things: How easy is it to get around this building? Does it make me want to enjoy myself?

via Las Vegas Business Press :: David G. Schwartz : Even amid severe slump for Las Vegas, casino operators can guide destiny.

This dovetails nicely with Chuck’s meditations on the artistry of Aria. The architecture doesn’t mean anything if the resort–and the people in it–can’t consistently get that kind of reaction from visitors.

In essence, I’m saying that they’ve built a lot of hotel rooms on the Strip, and now they have to find ways to keep them full. It’s not going to be easy. And just waiting for better times to return is clearly not going to move things forward.

The point I’m trying to make is that I’ve seen a lot of thinking along the Strip that’s reminiscent of students and gamblers. Here’s what you usually hear when grades come out:
“I got an A in the class.”
“The professor gave me a C.”
In other words, we’re responsible for our successes but not our failures. You don’t have to walk very far through a casino to hear this same mentality at work among gamblers. And these days, you can even hear it upstairs in executive offices.

Back in 2006, I didn’t see any annual reports saying, “Because of rising consumer credit and escalating personal wealth, we’re doing a bang-up business this year.” Instead, it was the bold leadership of the management team that was responsible for all the big rise in shareholder value.

Fast forward a few years, and we hear that “Due to a sagging economy, we’ve had lower than expected earnings.” Well, by now they’re usually expected to be pretty low, but you get the point.

I understand that no manager’s going to come out and say that they’ve done a lousy job of marketing and staffing their property, but it’s important to be more honest internally. Maybe it’s just semantics, but I think what people say reveals a lot about what they’re thinking. In this case, it’s very important for people to accept that the bad economy didn’t do anything to them: the choices they made, whether it was taking on too much debt or not maintaining service standards and the perception of value, put them into the predicament they are in today. They are fully capable of finding a way out of it.

Book Review: Waiting on a Train

James McCommons. Waiting on a Train: The Embattled Future of Passenger Rail Service. White River Junction, Vermont: Chelsea Green Publishing Company, 285 pages.

Transportation is a big part of the American national character. We’ve all learned how canals helped to tie the fledgling United States together in the ante-bellum period and railroads did the same in the post-Civil War years. In the 1950s, the interstate highway system facilitated the development of suburbs, and over the past thirty years affordable air travel has made cross-country and even trans-global trips possible for much of the population.

The big problem is, and always has been, how to pay for it. From Whigs and Democrats arguing over “internal improvements” to the recent uproar over federal stimulus money for rail construction, the devil has always been in the details.

In WAITING ON A TRAIN, James McCommons takes a long look at the state of passenger rail service in the United States and finds it lacking. The passenger notices the inconveniences: substandard dining cars, surly employees, trains that are hours late. But beneath these surface problems are fundamental issues, such as AMTRAK trains often being shunted aside for freight trains and the lack of investment in stations, track, and train technology. In addition to conducting research and interviewing key railroad figures, McCommons brings a human element to the story by sharing his numerous trips across the country via rail. This gives the reader a far better feel for the difference between service in Northern California and the Midwest than any statistics could.

It can be argued that trains built America. Why, then, did Americans turn away from rails in the 1950s? That’s the big question that rail advocates have to answer before they can build a train system that will attract riders.

Like anything else, it comes down to cost, both in money and in time. Long-haul trips are simply more convenient by air: few working people have the luxury of spending four days to get their destination when they can be there in four hours. Within a metro area, cars may be both more convenient and cheaper than rail travel. If this is the case, travelers can’t be blamed for not taking the train. But when personal auto travel becomes more expensive–or more hampered by parking issues–than train travel, more people will take the train.

The problem is that trains require significant investment, and funding them is a political minefield. As a result, much of the book is about politics. Whether it means failing to invest in new tracks and trains or keeping unprofitable services operating, much of the current national rail system has more to do with politics than rational economic choice. It doesn’t help that even rail boosters now concede the passenger service will never be profitable. Despite the fact that all forms of transit in the United States enjoy some sort of government subsidy, this will doubtless continue to be a deal-breaker in many states.

It’s difficult to see an easy solution here. Even if gas prices rise to $5 a gallon and stay there, a car that burns 25 miles per gallon can travel 200 miles for about $40 in about 3 hours. Can trains compete with that, and the added convenience of not having to adhere to someone else’s timetable? Not in most areas, and not with the kinds of trains we have. A bullet train that makes the trip in a hour might, but if it’s too expensive and had limited trips would be the third option after air travel. Trains have a steep grade to climb.

This massively informative book blends railroading, politics, and industrial policy into a readable, personal narrative thanks to McCommons’ cross-country trekking. While strenuously advocating a more prominent role for trains in the future, it pulls no punches when discussing the problems with rail travel as it now is. The author starts out believing that more rail is good; someone who feels passionately that the opposite is true might not be swayed by WAITING ON A TRAIN, but they might have a better appreciation for why some feel so strongly about improving the country’s train service.

To show the timeliness of the book, a thread over at Two Way Hard Three about the future of Las Vegas has sparked some lively debate in the comments about the possibility of an LA to Vegas train. WAITING ON A TRAIN makes it clear that this train won’t be built (or not) in a vacuum, but will be part of a larger national move towards or away from the rails.

Post-Pinnacle AC=Post-war Berlin

Here’s a holiday update on the status of Pinnacle’s much-ballyhooed Atlantic City project. Remember the billboards? From the AC Press:

The site has become yet another vacant city lot, a prominent symbol of broken promises and the weak economy.Fences line the gravel lot dotted with weeds and a few scattered slabs of old concrete. Local government has no power to change the situation.”They put 3,000 people out of work, they took away valuable ratables and we let it happen,” said Councilman Dennis Mason, head of the council's Planning and Development Committee, of Pinnacle's decision to demolish the Sands. “We just kicked ourselves in the butt again.”The collapse of Pinnacle's bold plans affect more than just the 20-acre property.The 74-year-old city post office across the street has been shuttered since the Sands demolition. It is scheduled to be demolished as part of project to widen Martin Luther King Boulevard, plans made in anticipation of Pinnacle's arrival. Businesses around the site on Pacific Avenue, like Fischer's Flowers and a multicultural store called Wada International Store, have either moved or closed.Other Boardwalk businesses moved out after Pinnacle raised the lease costs on storefronts they now own. They replaced some stores with new tenants, but the facades have been damaged after store signs were torn down and replaced with cost-saving banners.”If you look at that area, it would be fair to compare it to Berlin after the war,” Police Chief John J. Mooney III said. “That whole neighborhood has been decimated by the demolition.”

via Empty Pinnacle site, symbol of broken promises and opportunity for crime – pressofAtlanticCity.com : Today’s Top Headlines.

I always thought that if they had an All-American Exposition that celebrated the unique architectural contributions of different American cities (New York brownstones, Philadelphia rowhouses, etc), Atlantic City would be represented by a vacant lot. I guess it’s ingrained into my mentality, having grown up in post urban-redevelopment Atlantic City, seeing plenty of empty lots all over.

The worst news about this story is that Pinnacle’s bottom line in Atlantic City–even with the costs of maintaining the “hole” thrown in–are better than those of three real casinos with thousands of slot machines and hundreds of hotel rooms. From January 1 to Sept 30, 2009, the Atlantic City Hilton lost nearly $20 million, Resorts and the Tropciana lost about $18 million, and Trump Plaza lost almost $5 million from their operations. So if Pinnacle’s only flushing two or three million a year down the hole in the middle of the Boardwalk, they’re actually coming out ahead, and that’s not even factoring in the costs of building, interest on bonds, and such.

Time warp

Yesterday while doing some unrelated research I found the Lewis Hotel Training Course, circa 1935, in the collections at UNLV. It seems to be a guide to working in hotels that explains the duties and obligations of every position. I’ve scanned in the first few pages of the “chambermaid” volume to give you an idea of what it’s like.

page 1

page 1


page 2

page 2

You’ve got to click through twice to see them full-size. Make the effort–the trip back in time is definitely worth it. My favorite part is the bottom of page 2, which warns against allowing chambermaids to go to dance halls, “movies,” and other “places of amusement that may be dangerous for them.” That certainly was an era of different social mores.

Looking at 2010

Here’s some breaking news: things don’t look so hot for 2010, at least if you’re in the casino business. From the LVRJ:

The impact the recession had on the casino industry in 2009 has not been completely accounted for, but by all measures the year will go down as the worst on record.

Through October, gaming revenues have declined more than 12 percent both on the Strip and throughout Nevada. Monthly revenue figures statewide have fallen to 2003 levels.

Get ready — 2010 may not be any better according to one casino industry analyst.

Fitch Ratings Service, which follows the high-yield bond markets, believes gaming revenues nationwide will continue to be pressured by the economy. Spending trends remain weak and unemployment will continue to reduce how consumers dole out their discretionary dollars.

via CASINO INDUSTRY: Outlook: Unfavorable – Business – ReviewJournal.com.

This is where the casino executives earn their keep. It’s easy to run a profitable resort when the market’s expanding by five percent each year. When it’s shrinking, it’s another story.

I’m of two minds about the continuing economic gloom. On one hand, we won’t just wish our way out of it. On the other, it seems that this is just a continuation of the long-standing predicting trend of extrapolating the present into the future indefinitely.

This is one of the reasons that trying to predict the future, in any except the most rudimentary ways, is futile. Over the past few weeks, I’ve had several reporters ask me if 2010 will be better than 2009. I have told them all that I just don’t know. Of course, if I said, “Yes, it will get better” or “No, it will get worse,” I’d have about a coin flip’s chance either way. There are simply too many variables to try to forecast what’s going to happen except in the most basic terms.

Casino executives should prepare for a challenging year and focus on delivering a combination of value and favorable experience to their customers. Simply dropping room rates then cutting levels of service will be harmful in the long run. In order to compete with the mushrooming number of gaming options, destination casino resorts will have to offer both good deals and unique experiences. In the past, they’ve usually offered one or the other; now, they have to deliver both.

It’s not going to be easy, but battening down the hatches and waiting for the crisis to pass isn’t going to get the job done. That seems to have been the dominant industry paradigm for about two years now (with a few exceptions), and it’s not a viable long-term option.

It will be important for casinos to concentrate their resources where they can make the most favorable impact on customers, be it on the casino floor or off it.

Only in Vegas

As I was driving out of Aria last Wednesday, I saw something unusual at the corner of Harmon and the Strip. This was the best picture I could get:
CIMG2111
You’ve got to click a twice to get the image big enough to see what’s going on, but it might be worth it.

CityCenter and traffic

I’ve been busy today getting the slot hold occasional paper finished up, so running the risk of CityCenter fatigue, here’s an excerpt from my last LVBP column about, you guessed it, CityCenter:

This might be the most novel thing visitors notice about CityCenter, at first. And its hard to believe that its not by design. One thing that sets CityCenter apart from other resorts on the Strip is that because of the density, you will never be far from the street when you’re in the public spaces. The third-floor pool, for example, faces a parking structure on the west. It’s not close enough to smell the exhaust, but it is in the field of vision of poolside loungers. This is a profoundly different sort of vibe than the usual “desert oasis” feel of most Las Vegas pools, where hotel towers or extensive setbacks remove visitors from traffic and, in a sense, reality

via Las Vegas Business Press :: David G. Schwartz : CityCenters pocket parks, traffic circles stand as symbol of Strips evolution.

Further down in the article, you’ll note my reference to plural “pocket parks.” When I wrote this I hadn’t seen the entire complex and was under the impression that there were more than one–I thought I heard someone calling the area outside Bar Vdara “one of the pocket parks,” but I either misheard or that was an error. Even though there’s just one, though, it’s still significant.

Of course, if you were Steve Wynn and you wanted to really rain on CityCenter’s parade (which he probably doesn’t) you could just say, “Twenty years before you unmasked Las Vegas’s first pocket park, I built its first pocket rain forest.” You got to say it in the “I’m Steve Wynn” voice, though.

Ariavatar and Cirque du Spring

I don’t have much time to write today, but I wanted to get this thought out there. I haven’t seen the new James Cameron movie Avatar yet, but from the commercials and the reviews, I think that it might be the best cinematic comparison to City Center. It’s worth noting that they’ve been “in production” for about the same time and both of them push the technical envelope in their field. Despite the positive reviews, there’s still skepticism about how both will do.

On a slightly related note, here’s another idea that might be thought-provoking. With all of the talk of how the Elvis Cirque show “isn’t ready,” I was wondering what whether it’s a good fit for Aria at all. I think it is, because you’ll get two groups of people: Elvis fans who want to see the show because it’s about a performer they love, and those who think that Elvis has a kitschy appeal. I don’t think we should ever underestimate the power of kitsch.

But I can think of something that might have been a better fit for Aria. With all of the attention paid to environmental stewardship and whatnot, imagine how cool a Cirque show based on Stravinsky’s Rite of Spring would be.

Here’s the London Symphony Orchestra performing Rite of Spring in 2007:

If you’ve got a short attention span, it really starts cooking at 3:38 or so. The modernistic music seems to be a good companion to the modern architecture. And if there are reservations about ballet music working on the Strip, it is about a pagan sacrifice, which might be fitting for Sin City.

Aria is open at last

But you didn’t need me to tell you that, you’ve probably seen pictures and more at ariaopening.com. And here’s a few words from the Sun about the opening:

The wait is over.

After a two-minute fireworks display, the Aria Resort & Casino opened its doors to the public late Wednesday night, giving tourists and Las Vegas residents a glimpse inside the centerpiece of CityCenter. It is an $8.5 billion project many have watched evolve since its inception five years ago.

That evolution has not been without adversity. Construction defects and a sharp downturn in the economy persuaded MGM Mirage, the world’s largest gaming company and the developer of the site, to top off the Harmon hotel to half its proposed size.

Six construction workers died during the building of CityCenter.

And, it opens during the worst recession since the Depression, appealing to a shrunken class of high-end consumers.

But Wednesday was about celebration.

Welcome to CityCenter: New Strip casino opens its doors

I’m working on a few longer pieces to try to make sense of the new resort from a few different angles. Time will tell if City Center is truly transformational, but it’s certainly inspiring a lot of talk right now.

Total pwnage

I can’t think of a time that I’ve seen someone put in their place this brilliantly. From NORM:

Donald Trump and MGM Mirage management won’t be exchanging Christmas cards.

The controversial New York real estate developer is raining on CityCenter’s parade, calling it “an absolute catastrophe.”

“The biggest problem is it costs so much,” Trump said. “It cost billions more than anticipated and its going to be hard to recover from that.”He added, “I love Kirk Kerkorian and I hope it works out for them.” Trump said he came away with reservations after seeing CityCenter….

Asked to comment, Alan Feldman, senior vice president of public affairs for MGM Mirage, e-mailed a terse, 11-words response:”I can hardly imagine anyone’s opinion that matters less than his,” Feldman said.

via NORM: The Donald slams new megaresort – News – ReviewJournal.com.

That’s funny. And it’s coming from one of the smartest people in the business. There’s just no answer to that.