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STATESIDE
Stateside
Sharon Harris asks: “What is normal?”
W
hen things return to normal…we end restaurants are suffering and many regulars may
have all heard or used that be turning off to this new wave of casino patron.
expression. What does it really Casino operators face a slippery slope. On one
mean? Does “normal” describe what hand, they must fill those rooms. With the December
we have grown accustomed to and opening of MGM Mirage’s $8.5 billion CityCenter
accepted as standard? Does “normal” evolve over time? complex, the pressure to lure more visitors and buyers
The Doobie Brothers released an album in 1974 increases. If successful, this enormous 67-acre
called What Were Once Vices Are Now Habits. The title gamble will redefine Las Vegas.
reflects how our perspective changes because of our Traveling requires that consumers trust that they
own behavior and external events. As I reported last are safe, have quality and that codes and standards
month, gaming now has a new public acceptability, will be met. Otherwise, why bother, especially when
thanks to a need for money in every state. casinos operate throughout the US. Every city offers
At the November G2E, many people spoke of ‘when gourmet dining and retail, and live theater and more.
conditions return to normal’. However, no one could The Las Vegas expansion dream could face
define it. Driving down the Las Vegas Strip, I was complications with Aria, CityCenter’s 61-story
stunned to see inactive cranes rising from multiple centerpiece resort that opened mid-December. The
dormant casino construction projects, including possible default on $60 billion of debt by Dubai
Boyd Gaming’s Echelon and the Fontainebleau World – the company that owns 9.4% of MGM
Resort. Located across the street from one another at Mirage and 50% in the new Aria’s casino revenues –
the northern end, there was an eerie silence to them. could potentially affect the management. That would
I once heard a New Jersey state legislator praise the trigger another round of licensing investigations of
existence of cranes in the Atlantic City skyline. To any new executives.
Las Vegas stands
him, it meant continued development and growth. Regionalized companies fare better than their
However, he omitted one obvious caveat; the cranes multi-billion-dollar counterparts. These smaller
at an identity actually have to be moving on the construction line organizations have invested in diverse jurisdictions.
crossroads. Even
to be productive. They may have been spared the same economic
the most brilliant
Las Vegas stands at an identity crossroads. Even the downturns and may weather the storm more easily.
most brilliant minds out there are unsure of the The Isle of Capri operates 14 properties in six
minds out there
solution. During the G2E “State of the Industry” midwestern and southern states. Geographic diversity
are unsure of the
keynote seminar, Boyd Gaming’s Keith Smith has helped corporate executives address specific
questioned whether the industry faces a “permanent economic issues.
solution.
change”. He claimed terms like “indulge” and “luxury” Isle President and COO Virginia McDowell
are rarely used when marketing Vegas as a destination. understands the differences from Atlantic City’s giant
In other words – the city has hit a new “norm”. gaming halls. She spent close to 20 years in New
So, how are Las Vegas and other gaming Jersey before joining the Isle.
jurisdictions morphing these days? One measurement At the “State of the Industry” seminar, McDowell
is by who is coming to play and their effect on the admitted her company formulated a new “normal”
overall atmosphere. In a bygone era, people dressed back in 2007. By cost cutting, they offset all but $10
up to visit a casino. No more – people often dress one million of their $50 million in 2008 revenues losses.
step above minimum public decency standards. Looking ahead, McDowell’s company will aim to
I heard from several Las Vegas residents that the provide value-added entertainment, especially in
method of generating business and attracting visitors those markets with increased unemployment. That
may also have a negative effect. By slashing room rates, means major decisions for the entire property, not
many hotels have opened themselves to a new guest just the gaming floor. One example was $20,000
demographic. Sounds good, right? Isn’t marketing to spent to upgrade the bar menu rather than buy one
new customers the goal? It is, until you dig deeper. gaming machine.
Some claim the cheap room costs are attracting Manufacturers always vied for space on the casino
new customer types, who bring their own food, beer floor. Now, they will also compete for purchasing
and booze, and then get drunk and trash the rooms. dollars with virtually every other section of the
Yes, they may go downstairs to the casino for the property. How will equipment manufacturers address
buffet or to gamble, but they limit themselves to the this new scenario?
low denomination machines. The result is that high- Who knows? Welcome to the new normal.
12 JANUARY 2010
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