The big talk at G2E has been the recession. Last year, it was how to fight it. This year, it’s how to survive it. Anyone else get the sense that we’re living in an age of rapidly diminishing expectations? Here’s a bit from the story from the LV Sun:
The recession is forcing Las Vegas to return to its roots as a more value-oriented destination, and that’s not a bad thing, Boyd Gaming President and Chief Executive Keith Smith said.
“The town has now evolved back to its original roots,” Smith said Wednesday at the Global Gaming Expo. “I think the industry will continue to evolve and refine itself and eventually find a norm between value and high-end.”
via Boyd chief: Recession forcing Vegas back to roots – Las Vegas Sun.
Later in the story, there’s something that must be a typpo:
But with the addition of new technology, costs have increased and operators aren’t buying. Khin said slots stay on casino floors for an average of 25 years without replacement.
That’s impossible. If that were true, most of the machines on casino floors would have been installed in 1984. Slot managers would buy one set of machines when the casino opened and then wait a quarter-century (on average) to buy more. In that case, why would they have a big annual trade show to showcase the newest slots if managers keep machines for 25 years? Is it actually 2.5 years? That seems right. Hopefully someone over at the Sun can clarify that.
Smith makes a great point. I think that perception of value–rooted in real value–is going to be the key for Las Vegas for the conceivable future. The high roller/low roller tilt in this town is definitely a cyclical phenomenon that’s rooted in supply and demand: we’ll be in a low-roller turn for a while, but once things come back room rates and ticket prices will start creeping up again.
Remember, this is an industry where casinos in a city that’s been steadily losing ground (my hometown of Atlantic City) charge people $10 and more to park just because they can. Things like this don’t bode well for the customer. I’ve really got to question the aptitude of an executive who thinks that having customers’ first experience of their resort be reaching into their wallet to pay for something they can get for free elsewhere provides the foundation of a good customer experience. Sure, they don’t do that in Las Vegas, but several casinos tack on resort fees and other add-ons that have a similar effect.
My still-in-process slot hold study indicates (if I’m reading this right, and you may read it differently) that ultimately price isn’t the major determinant for players, it’s entertainment value and convenience. As a group, players are choosing higher-hold, flashier games over lower-hold, more sedate ones. Can this insight be applied to the non-gaming dimension of casino resorts? I think so, and this may be the key.