Two Way Hard Three | Las Vegas Casino & Design Blog

July 10, 2011

SIMPSON ON VEGAS #025: What, We Have Pool Parties?

Posted by Hunter

This is the 25th edition of the Simpson on Vegas column - congrats Jeff and thanks to all of you that are reading. I love publishing this column and I hope you're enjoying it too.

Jeff hits a few topics this time out but my personal favorite is a reminder that local business media could do more when writing about the gaming industry.

Anyway, keep reading after the jump for the full low-down.


I'm going to write about a few different things in this column and I'll begin by tipping my hat to Dr. Dave Schwartz and his recent column warning about the risk to the city's tourism business if action isn't taken to reduce the recent spate of violence on the Strip. As I'm writing this there have been three Strip murders in the past couple of weeks.

Dr. Dave is 100 percent right and Strip security officials and the Las Vegas Metropolitan Police Department need to get together and figure out, pronto, what they need to do to minimize the chances of more incidents. Sometimes these incidents are alcohol-fueled but often they are committed by a group I'll call "criminals on vacation."

We can't screen our visitors to make sure they're not on probation or parole, carrying weapons or bad intentions. Thugs and other nefarious elements have always liked Las Vegas: Parties, drinking, drugs, clubs gambling, strippers, hookers and 24-hour action don't exactly scare away the criminal element. But what we can do is spend what it takes to make sure that there are no more -- or, at least, almost no more -- murders and other violent attacks. We can make the Strip a safer place by positioning more cops on the ground, on the pedestrian bridges and on Las Vegas Boulevard. We can also boost casino security presence to the perimeter of properties and make sure that the recent statistical bubble fades into the past.

*****

Some of you may have noticed a story last week where Moody's Investors Service warned that Caesars Entertainment Corp.'s gigantic debt load may prevent the company from being able to reinvest enough money to keep its casinos fresh enough to prevent market-share erosion. This story has gone on much longer than just during the recession, and with more companies than just Caesars. That said, it particularly affects Caesars. The company dealt with its post-privatization debt crisis by delaying much-needed refurbishing, remodeling and replacing at almost all of its properties.

One of my beefs with Las Vegas media and its coverage of the casino business is that it shouldn't take a Wall Street outlet warning to create media awareness. That's a pure business story: The risk of dilapidated hotels losing market share to better maintained properties. Hunter's ratevegas.com blog and Chuckmonster's VegasTripping board have had had countless posts on the subject for years. Reporters should know the business they cover, they should talk to people in the business who know what is going on and they should read message boards and blogs. The Caesars maintenance issue is one that was ripe a few years ago. Sure, the recession was in full swing and the company announced then that it was deferring maintenance. But where were the follow-up stories, questioning Caesars executives about when they planned to resume remodeling and maintenance? Talk to the folks on the blogs and message boards about the problems and then pose smart questions to industry executives and property bosses. Are some of these places becoming dumps? That's a problem for the thousands of workers.

Five years ago I took a lot of heat for hammering on the Tropicana and its foolish ownership for slashing staff and letting the place deteriorate. Before that I focused on the mounting financial troubles at the Resort at Summerlin, Aladdin, Binion's Horseshoe and Castaways. No one's saying that Caesars is going the way of those properties but our city's second-biggest operator needs closer scrutiny from the press than it's received. What we need in this market are fewer puff pieces (What? We have pool parties?) and more hard looks at real business issues.

*****

On a Vegas Gang podcast a few years ago I recommended that listeners considering a trip to Las Vegas might want to take advantage of ridiculously low prices and stay at one of the Strip's top resorts. Don't use the trip to check out a bunch of different places but instead, stay at a great place, use the spa, eat a couple of meals there and generally soak up the vibe of a great resort at a bargain price.

It was good advice then and, even though rates have been slowly increasing for the past 18 months, it still is a good idea. There still are some low prices available at some of the best places in town. Value is my favorite measurement and when I can get a great place at a price I'm set up for an awesome getaway. On the other hand, mid-summer, midweek room rates are usually (along with mid-December) the lowest of the year, and a budget-conscious traveler can can get some incredibly good deals. Students, retirees and hard-core gamblers who want to save every last buck for the tables will find good options on and off the Strip. My first Las Vegas trip I stayed at the Four Queens and had a great time, taking short walks to check out all of the other downtown places. Downtown still has an awesome vibe and is a strong value. I'd recommend it.

-- Jeff Simpson, July 2011

Categories: Caesars/Harrah's, Las Vegas Strip, Simpson on Vegas


Comments

Read archived comments (5 so far)
July 10, 2011 5:44 AM Posted by mike_ch

Seems to be a lot of writing right now about unsanctioned performances and activities on the Strip, people seem to be blaming these for an increase in violence.

Honestly, I've watched a lot of "fight in casino" and "fight on the Strip" videos, and almost all of them revolve around nightclubs and take place late at night. The area around Planet Hollywood seemed in recent years to be ground zero for all this, maybe it's not as bad now that Privé is gone, I honestly don't know.

I would not give money to a streetside performer because to the rest of them it paints you as someone who has money (which I'm not) but I've generally been somewhat amused in the evenings to see people playing musical instruments around the Cosmo and Harmon buildings at night. Street musicians are just something I'm used to in the Bay Area cities as well as trips to towns like Seattle, Toronto, and eventually Chicago (next on my agenda) and to be in such a high density setting as the strip and not see typical any typical urban life always seemed a bit awkward.

It's not just like the Strip is simply Times Square, which many New Yorkers hate and has none of the city's character. It's somehow more siloed, more corporate, more advertising driven with a total lack of spontaneity.

That said, "bottled water one dollar" and the tables of knockoff fashion that I've seen between Caesars and the Bellagio should both be considered unlicensed businesses and shooed off the premises. You would never see that in a big city subway station, especially if the transit agency already had a newstand tenant paying rent to sell people snacks and drinks.

July 10, 2011 6:29 AM Posted by detroit1051

Jeff, your stern warning to local media needs to be taken to heart. Media are stunningly silent on most aspects of Caesars Entertainment's business. Perhaps that is because it's no longer a public company?

All of the topics in your column are tied together, imo: Crime, low room rates, deferred maintenance. Caesars has such a mid-market presence on the Strip that if poor maintenance causes desireable mid-America customers to go to other properties, it will put greater pressure on room rates which in turn could attract less desireable clientele to gravitate to Caesars properties. This could be a vicious circle that keeps feeding upon itself.

I will say I'm, excited about the new Nobu Hotel at Caesars Palace. It's something new and different which may enhance Caesar's image. In the meantime, paint the damn balloon at Paris :)

Caesars made an investor presentation in May which, although self-serving, is encouraging----if the economy ever imroves.
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDI4MjUxfENoaWxkSUQ9NDQ1MTQzfFR5cGU9MQ==&t=1

July 10, 2011 8:11 AM Posted by Dave

You make some good points, Jeff.

I've shared my ideas about how I think the Strip-side hustling and the increase in violence is tied together before, but it comes down to this: people, for whatever reason, are feeling that there are fewer consequences to their actions on the Strip.

I've got to wonder how much online ad revenue has to do with the proliferation of puff pieces. For better or for worse, people like to read them, and I can see why papers would want to run them to get their numbers up.

On the other hand, in a case like Caesars, there's really no one who wants to talk about what's going on behind the scenes. Certainly no Caesars execs, and the bondholders are probably just keeping their mouths shut and hoping for the best. Any negative publicity would make it more likely that they won't get their money back if the company goes to BK.

So basically the people who want to know what's going on are just motivated by their own curiosity and a vague desire to get information out to the public, while those who want more puff pieces have decided financial interests at stake. I'm not totally surprised that the puff pieces are winning out.

That said, it would be great to get some tougher questions answered.

July 10, 2011 7:58 PM Posted by Ted Newkirk

I wonder if Ceasars (Corp) feels that they loyalty program will outweigh the disadvantages of deferred maintenance. Their player database is legendary and even if a resort is a little rough around the edges, are people getting comped (or nearly comped) rooms really going to complain or go elsewhere? Especially if they are a loyal player who has given very little play to other non-Caesars properties and thus probably probably only getting really good offers from Caesars?

Obviously, Caesars doesn't have the money to finish their tower, do Project Linq, build their arena (even with taxpayer help), take care of the deferred maintenance, and purchase a local's joint. Be interesting to see what direction they take.

I'm not going to call the deferred maintenance a non-story as it is a Las Vegas business story. But one that a very, very limited audience is interested in. Thus perhaps the lack of mainstream media coverage (although now that it has been brought up here, be interesting to see if the Sun deems it story-worthy).

July 12, 2011 12:39 PM Posted by Jeff Simpson

detroit1051, Dr. Dave and Ted:
I think the proliferation of puff pieces on business stories that I call "No shit stories" is not related to perceived or actual reader demand, online or in print.
I think the better explanation is a wholesale influx of new journalists, reporters and editors, who somehow think that the market is filled with people who are as wide-eyed with wonder about everything they discover about Las Vegas that is different from whatever places they came from.
Some are, but sophisticated readers and longer-term Las Vegans would be better served by sharper analysis and better trend spotting.
Dave and Ted, time and again it has been proven that quality business journalism, particularly casino business, will do very well in terms of online readership. The problem is that editors don't demand it and reporters, for whatever reason, aren't often motivated to deliver it. Too many editors and reporters don't really know the market, leading to superficial stories and stories that have been done many times before. Some veteran reporters get into a groove doing their cycle of stories: Annual meetings, quarterly earnings/conference calls, monthly regulatory meetings, monthly gaming revenue numbers, monthly stock price changes and coverage of G2E and a couple of other conventions every year. Add in the WSOP, updates on holiday weekend visitation, Chinese New Year, Final Four and Super Bowl business and you've almost filled in a reporter's yearly dance card. Unexpected or at-least-not-on-the-calendar news like mergers, acquisitions, closures, hirings and firings are only covered as they happen. Reporters in LV almost never break stories like those on their own digging (spoon fed placement pieces notwithstanding). Occasional trend pieces are usually only pursued after the subjects are well-worn on blogs and message boards, with the reporters writing as if they were Balboa discovering the Pacific (ignoring the efforts of new-media competitors).
Ted, Certainly Caesars places great faith in its Total Rewards system and I'm sure the company doesn't agree with Moody's worry about its ability to withstand market-share erosion against better-maintained competitors. That said, I'll guarantee you that a well-researched, -sourced and -written story on deferred maintenance would have done very well in online readership for the Sun or R-J. Almost every single gaming story does. The reporter could have led with some of the more egregious examples (filthy parking garages, threadbare upholstery, even a photo of the infamous somewhat blue Paris balloon) and had experts like Dr. Dave explain why visitors who used to stay at Paris or Bally's might instead check out a remodeled Tropicana.
The problem isn't that no one would read the story, people read almost every gaming story they're presented. The problem is that no one demands the story.
Last, Detroit, I also like the Nobu tower idea.