Two Way Hard Three | Las Vegas Casino & Design Blog

January 5, 2010 5:19 PM Posted by Tim

Harrah's also issued a press release today promoting the lack of resort fees...

Jan. 4, 2010 (LAS VEGAS) —Harrah’s Entertainment Las Vegas resorts offer guests the excitement and value of the Las Vegas Strip, without the excessive fees. The Las Vegas properties, including Paris Las Vegas, Bally’s, Rio All-Suite Hotel & Casino, Caesars Palace, Flamingo Las Vegas, Imperial Palace and Harrah’s, do not impose mandatory resort fees attached to a room reservation.

Harrah’s Entertainment Las Vegas resorts exclude mandatory resort fees, thus allowing guests to allocate their budget toward entertainment, dining, shopping or room upgrades rather than amenities that they may not use or desire. Many Strip resorts outside of the Harrah’s Entertainment Las Vegas portfolio of resorts have implemented such fees. These resorts offer competitive promotional rates; however, in many instances, an additional resort fee is assessed when booking the reservation online. In some cases, the fee may be in excess of 40 percent of the base room rate.

Resort fees range in price and services depending on the hotel and may include access to complimentary internet, bottled water, daily newspapers or use of the property’s fitness center. The amenities may or may not be of value to the guest; however, the fee remains intact regardless of use.

Guests of Caesars Palace, Paris Las Vegas, Bally’s, Rio, Imperial Palace and Harrah’s Las Vegas can remain confident that the competitive rates booked on the internet are an accurate reflection of the actual room cost per night (plus room tax), with no additional surprise fees.

January 5, 2010 7:38 PM Posted by Jeff in OKC

Does this mean they have free internet access and wi-fi?

January 5, 2010 10:05 PM Posted by Hunter

This reminded me of the Verizon ads that made fun of AT&T's network problems - hitting MGM Mirage where it hurts.

Surprised we haven't seen these tactics sooner.

January 5, 2010 10:27 PM Posted by Doug

For years the Paris was one of my favorite Las Vegas casinos. I don't know if they sill have them, but I used to really like their smaller size crap tables . And it used to be one of the best places on the strip to play lower limit mini/midi-baccarat.

But these days Harrah's has destroyed the gaming conditions of the lower limit blackjack tables and because of that it has the feeling of being a 'clip joint'. They even have a Bac table called EZ Baccarat and although it has a similar low house advantage I don't like the idea of changing a classic game.

The high-limit area is very pleasant, but I can't remember if the roulette table in there is European or just single zero - knowing Harrah's it's probably just single zero.

However, no resort fees (and Mon Ami Gabi) is the kind of marketing that could get me to return to the Paris for a visit. - Mirage, TI, etc. all charge resort fees and it's obnoxious.

January 6, 2010 10:46 AM Posted by doc_al

Disingenuous. With rates coming down, not charging resort fees amounts to not taking a rate hike that you weren't going to take anyway. I doubt Harrahs leadership really considers this a cornerstone corporate principle. When the time is right, they'll get on the bandwagon as it will allow them to recoup a little bit of lost revenue on comped rooms.

January 6, 2010 12:17 PM Posted by Matt K

I don't really get this, I'm afraid. I know it's not popular to be the pro-resort-fee guy, but what the fee does is move a portion of the room rate to an area where it can't be taxed at 12%, and where Expedia can't take 10, 15 or 20%. I realize people hate hidden fees, and many websites keep the resort fee buried deep in the fine print, but consider: If the fee goes away, then it means either a) Harrah's is essentially announcing a new discount on all their rooms, equal to the size of the fee - and if so why not just discount the rate? or b) they will have to move the cost back to the room rate, which will go up. And if the rate goes up, it will go up higher than the fee to compensate for taxes and commissions. Bottom line: there's no such thing as a free lunch!

January 6, 2010 1:42 PM Posted by mike_ch

It's not just a blog post now. Harrah's properties on Travelocity have a description that begins with ** NO RESORT FEE ** and I can assume they're doing the same at Expedia, etc.

January 6, 2010 3:42 PM Posted by mwdelta

Matt, that's a good point. It's kind of like how eBay strongly encourages sellers to offer free shipping, knowing that they will then get to take a cut of that money. I had never considered the idea that fees were noncommissionable and taxed at a lower rate.

January 6, 2010 5:30 PM Posted by atdleft

Matt-
"but what the fee does is move a portion of the room rate to an area where it can't be taxed at 12%..."

Speaking as a local, I LIKE this. Nevada and Clark County are in a HUGE budget deficit, and it'd be nice for the state to have enough money to keep schools open and roads paved.

And speaking as a traveler, I don't mind too much. If anything, at least this means Harrah's will be more honest and upfront in charging room rates than MGM Mirage and the other big operators with their hidden "resort fees".

Hunter-

So when will MGM Mirage pull an "AT&T" and make some witty comeback ads? I can see it now: "Our rates are just as low, and our properties aren't dumps like you-know-who..."

January 6, 2010 7:16 PM Posted by Jeff in OKC

atdleft-
I don't want to pay for your schools and roads. Tourists pay more than their fair share, by any measure, already. Nevada has no income tax and no toll roads, so services near the bottom are the trade out for your low tax burden.
I wonder who will be the first to come out with the TruPay index-the true amount you pay for your room after all fees and taxes are included?

January 6, 2010 7:32 PM Posted by atdleft

Jeff-

Um... We have no income tax because of the casinos! So what's the point of having them if we can't collect the room tax on the hotel rooms? And hey, it's not like tourists don't benefit from our infrastructure... Or conversely, it's not like they won't be hurt if the state has to stop the HOV lane project on the 15, cut the number of police officers & firefighters protecting The Strip, and curb the pollution fighting initiatives aimed at reducing the smog starting to plague The Strip and Downtown.

January 6, 2010 8:14 PM Posted by mike_ch

Jeff and atdleft-

I think it's fair to say that Nevada's tax system is thoroughly screwed. The state's finances alone are a solid indicator of this, though our taxation system isn't exactly great either.

Californians come over here and like the whole "no state income tax" thing because it means a lot less work come tax time, but the result is that our entire system is tilted towards regressive taxation: instead of progressive income taxes that put a higher tax burden on the wealthy while less taxing those living paycheck to paycheck, we have embraced higher sales taxes on everyone including those with simple needs. Some notable residents, including a few casino heads, appreciate this system because it's tilted toward *illionaires (m or b, your choice.)

Our Casino Tax is extremely low compared to most all other states, which would SUGGEST that companies invest that much back into their product and their customers, but we've seen that when they're making money beyond measure that their reaction is to acquire each other's casinos and buy each other away. They may not be solely at fault if they're being egged on by shareholders who, as Steve Wynn always lamented at Mirage, are driven entirely on instant reward.

We're starting to veer off course and into the deliberately avoided (on this forum) realm of politics, but I really doubt casino companies are trying to simply help customers dodge a room tax, especially if they're throwing in services upon which the room tax wouldn't apply if they were bought independently (there is no room tax for wi-fi, or gym passes.)

Jeff's complaint isn't without reason, though. If he spent significant time living in the state he'd see that a large number of it's residents from both political schools of thought want to prop up the system of asking outsiders to pay for everything while averting any responsibility from paying for their own community's needs. While there's nothing wrong with the former (or else I wouldn't have complained that gaming tax is so low), the latter is emblematic of a phenomenon all over America of comprehensive public services but being unwilling to support the level of taxation necessary to pay for it.

(mike_ch steps off the soapbox, puts it back in his pants, and walks away)

January 7, 2010 7:47 AM Posted by atdleft

mike-

It's OK. You don't have to walk away. It's just that most people here are SO AFRAID of anything "t word", that they jump up and down and run to the nearest idiot promising "NO NEW TAXES!". After all, how do you think "Luv-Guv" Gibbons became Governor? (Hint: "Dina Taxes", she still fights like hell when the GOP throws that attack at her.)

Sure, there are some things we can pursue soon to eventually relieve the burden on gaming & tourism, like a fairer mining tax (Northern Nevada still has a HUGE mining industry) and a broad-based business tax. But in the mean time, all we can do is demand that gaming pay its fair share... And at least Harrah's looks to be doing that by charging a simple room rate with no hidden "resort fees" to hide some of that money for themselves.

And going back on topic, it's not like wifi, gym passes, and pool passes are hit by the room tax anyway... So why should MGM Mirage get away with that excuse? They're just going along with a horrible trend that was started with Station Casinos looking for a way to charge a "low room rate" while still making extra money off that room. No matter what "good intention" excuse is made, the resort fee is deceptive and a fairer, simpler, more upfront room rate is much preferable IMHO.

January 7, 2010 10:28 AM Posted by mike_ch

I "walked away" because politics really isn't what this board is about, and we kinda try to avoid it. Every now and then the casino industry drives our regulars into talking about politics (like Steve Wynn's shameless praise of the People's Republic.)

I have an opinion, as do a lot of others, but I basically wanted to point out that there's a lot of room for criticism in all facets of how this state is run. At the heart of that is a people who want things but aren't prepared to shoulder any of the burden. A large part of the state's debate focuses on taxing tourists more versus cutting budgets to fit within the income that comes from taxes on tourists. Like a suggestion for a single payer system at the health care summit, any idea that Nevadans fund their own lifestyle is most unwelcome and brushed off the table pretty quickly.

January 7, 2010 12:37 PM Posted by Matt K

I believe it's in everyone's best interests: the state, the hotels, and the visitors, if casinos are taxed on their bottom line profit. How much that tax burden should be is debatable. The problem with taxing top line revenue directly, like our 12% room tax, is that the state artificially skews the market for rooms. It's a law of nature that if you tax X, people will do X less frequently. So if you tax Las Vegas visitation... .... .... you see what I'm getting at. You create an artificially high price for rooms. Better to let hotels operate at peak efficiency in a free market and then tax the profits.

In my experience, the 3rd Party travel agent commissions is far and away the more serious issue. If you book a room through Orbitz or Expedia, sometimes more than 20% of that money goes to that provider. That's money that leaves the Vegas ecosystem permanently. Room revenue is the bread and butter of this town. (second only to gambling win perhaps) and over the last 10 years, an increasing slice of it departs by way of Expedia, never to return. Again, these online travel agents drive prices up - hotels can't stay above water at the old rates and give so much away to the travel agent. In the old days, travel agencies provided a modest number of visitors, and their commissions were even more modest. Now, online travel sites provide up to a third of Vegas travel entirely, and they take enormous fees.

Resort fees are one of a few desperate measures that hotels have started taking to steer money-making into channels that they control entirely. But if you want resort fees to go away, then Vegas travelers and operators need to slay the beast - Expedia. By all means, use Orbitz, Travelocity and Expedia to shop and do price comparisons. But when it comes time to book, call the hotel directly and ask them to match the rate. They will be more than happy to do it.

(Now I'll get off of MY soap box)

January 7, 2010 7:27 PM Posted by Jeff in OKC

I think gaming pays more that their fair share. I think gaming pays a higher percentage of Nevadas tax burden than any industry pays of any State in America. I think out of state visitors pay over 25% of Nevada's total tax collections. Again, a higher subsidy than any other State in America. I wonder if any Nevada residents are willing to pay any more taxes if it is shown they should pay more as part of their fair share?
Guess I'll get off the soap box, also.