Two Way Hard Three | Las Vegas Casino & Design Blog

February 25, 2010 7:18 PM Posted by atdleft

Yay! Another podcast. I'm listening now.

Oh yes, and I can't wait to hear your thoughts on the Harrah's-Palms news!

February 26, 2010 8:34 AM Posted by mesa

Hearing your comments on Aria it just confirms my opinion that I would not go back, We were just there this weekend @ Encore and once again you get treated great and the bartenders even remembered us. That being said if the casinos (aria) want my money then they need to step up there game. I can't see going to any other hotel than Encore.

February 26, 2010 9:24 AM Posted by Hunter

Some more on CityCenter's design:

http://observatory.designobserver.com/entry.html?entry=12748

February 26, 2010 9:36 AM Posted by Paolo

A few thoughts-

1. I really gotta give you all credit for being so fair when it comes to reviewing Vegas properties. It's difficult to get honest, unbiased opinion about anything, let alone expensive Las Vegas resorts.

2. About Aria/City Center's lack of great service (cellular and otherwise)- doesn't it seem like City Center is just MGM's regular business model but on a larger scale? To be fair, it's been a long time since I've stayed at an MGM property, but from what I've heard from friends and anecdotal evidence, they don't really do well on service at any of their properties. They put up a lot of money for marketing and property design to get people to come in, but once inside, they don't spend what they should on making sure the level of service is there. Customer service isn't something you can just start doing when it's not a core competency (like it is at Wynn's resorts). You have to have a culture of service. You can build the most amazing looking buildings in the world, but if you don't give equal attention to the experience once the guest gets inside, than it's all for nothing.

3. Texas Pacific is buying up the debt of the Palm's. Before, it was Harrah's buying the debt of Planet Hollywood. Even though Harrah's is owned by Texas Pacific, this could mean that if Texas Pacific did try and acquire the Palms, they may consider leaving them independent. I think it's an important distinction; from what I understand, Harrah's has been allowed to operate somewhat autonomously, so I would think that if Loveman wanted the Palms then he'd be the one buying the debt.

February 26, 2010 3:11 PM Posted by atdleft

Paolo-

But remember, TX Pacific & Apollo own Harrah's. And from what I remember, it was originally TX Pacific buying up PHo's debt. But whatever the case, it looks like George Maloof is ready to put up a fight if they try a takeover, as he seems to prefer calling The Palms his own.

Now regarding MGM Mirage, and for that matter Harrah's and Las Vegas Sands, it's important to remember that most of their executives running the ship today aren't "Vegas Old Timers" (like Steve Wynn) who were accustomed to providing the type of service that Las Vegas had always been known for. Jim Murren is a Wall Street guy, Gary Loveman is originally from Harvard, and Sheldon Adelson had previously been known for COMDEX. They weren't around when the mobsters would "pull out all the stops" to bring people to Vegas, and they weren't around when Steve Wynn started rebranding Las Vegas as a premier "resort destination".

You know what? That's it! That just may be the difference. Wynn considers his casinos "resorts", and the company runs its properties as the kind of place where one dreams of taking a fun/relaxing vacation. For MGM Mirage and Las Vegas Sands, OTOH, their hotels are a place to house people coming specifically for a convention, a concert, or some other event. And for Harrah's, their hotels are used as "bait" to get Total Rewards remembers to go to the casino and gamble.

February 26, 2010 3:44 PM Posted by Paolo

@atdleft Thanks for the correction... I couldn't remember if it was TPG originally buying up the debt or not. I do hope Maloof holds onto his property like hell!

I actually worked for Harrah's for a short period of time (at the Rio) and I can say that during my training, there was a HUGE emphasis on customer service. Now does anyone think Harrah's delivers exceptional customer service? Maybe, maybe not. But I can say that as an insider, it's all anyone talked about (that and Total Rewards).

I was able to have a chat with a VP of Marketing, and I remember him saying something along the lines of Harrah's not putting a lot of money into cosmetics and instead putting it into customer service; he believed MGM did the opposite, and that was what differentiated the two companies.

I do believe your right about the difference between the old timers and the new school. The new school is so short-sighted. Yes it takes longer to build a strong customer base through customer service and it can sometimes cost more. But in the long run, it's the most successful strategy.

February 26, 2010 4:53 PM Posted by atdleft

Paolo-

Actually, you are right. Harrah's also has a strong reputation on customer service... It's just a different kind of "service" than what you'd expect at a Wynn Resorts property.

The entire Harrah's system is built on the foundation of Total Rewards. They want to keep the gamblers happy so that they keep gambling. Wynn, OTOH, is all about the "luxury resort experience". Wynn is all about pampering the high-rollers and bringing in the big spenders, while Harrah's is more about milking as much money out of the gambler no matter what his/her household income is.

Now what makes Las Vegas Sands and MGM Mirage radically different from both Harrah's AND Wynn is that neither really centers its game plan around gamblers. Sheldon Adelson's background is in conventions, and ever since he bought The Sands and built Sands Expo his company has focused on winning convention business. Jim Murren's background is in Wall Street, so CityCenter was designed more as an urban hotel/convention/shopping complex than a "glitzy Las Vegas destination".

So getting back to the original point you made, MGM, Harrah's, and LVS were never really based on the "culture of service" that Steve Wynn gets and that the "old timers" remember "Old Vegas" espousing. While I'm certainly not one of those "old timers" waxing poetically about "back in the day when 'the boys' ran this town", it is interesting to see all the changes that reshaped Las Vegas in the years since the corporations started to take over the casinos.

February 26, 2010 6:25 PM Posted by Sperman Herman

I agree with every part of the Aria discussion, my visit was just the same as Hunter and Chuck Monsters.

After reading this article... http://www.macaubusiness.com/a2337_Harrahs:-No-active-talks-on-Macau.htm . What if Loveman is in talks with Packer and Ho about Melco Crown, will NJ give treat Harrahs as they treated MGM? Harrahs owns 4 properties not just half of one. What do you guys think? Lawrence Ho would be as "guilty" as Pansy Ho, right?

February 27, 2010 1:32 AM Posted by Dave

That's a great question, but I think that the history of NJ regulation has proven that logic and consistency aren't always at the top of the list, so who knows what to expect.

The point I was trying to make was that, since being denied licenses, neither Hugh Hefner nor Hilton Hotels brought discredit to the gaming industry anywhere else. There had been a few interesting regulatory hiccups at Caesars Palace in the 1970s, true, but the Hilton and Playboy license denials seem capricious now. Twenty years from now, I wonder if people will say the same thing about MGM Mirage.

From a practical standpoint, I think it would be close to impossible for HET to sell their AC portfolio if it came to that, so what are the real options? Unless we want to take up a collection here. Hey, I've already been licensed in AC, and I'm happy to come on board.

February 27, 2010 11:39 PM Posted by mike_ch

atdleft: Harrah's has many more rooms than Wynn, it makes sense to shoot for the working class and blue-collar and the occasional millionaires. Wynn can shoot for millionaires and billionaires gambling over a soft cushion of "regular" gamblers that those ritzy players will rarely if ever see.

February 28, 2010 9:10 AM Posted by atdleft

Mike C-

I wasn't saying that Harrah's strategy doesn't work. It clearly must, as they were the only one of "The Big Four" to turn a profit last quarter. I was just noting its differences, mainly that they use Total Rewards to funnel gamblers big and small into their casinos. (They funnel all their "small" players to Harrah's, Rio, Flamingo, and a few others while the "big" Seven Star high-rollers are mostly funneled into Caesars.)

Dr. Dave-

"There had been a few interesting regulatory hiccups at Caesars Palace in the 1970s, true, but the Hilton and Playboy license denials seem capricious now. Twenty years from now, I wonder if people will say the same thing about MGM Mirage."

I wouldn't be surprised if we do in 2030... Or maybe even in 2020. It will be interesting to see what New Jersey does if Harrah's decides to pursue a casino deal in Macau. Will they also be forced out, or will they have to stay put in AC?

February 28, 2010 12:11 PM Posted by American Gaming Guru

I really enjoy Jeff's contributions to the podcast, but I must say that he really came off as not knowing much about the AC market. He talked quite a bit about it and was factually incorrect on a few points made.

February 28, 2010 12:12 PM Posted by Hunter

What were the factual errors (other than the convention center thing that Dr. Dave corrected him on)?

February 28, 2010 4:34 PM Posted by mike_ch

atdleft: Except I'm extremely skeptical of the bookkeeping magic that allowed them to report a profit

Harrah's and Station are simultaneously some of the most troubled companies and least transparent companies in this sector. I don't think they're going to close their doors or anything, but if you think they can honestly report a profit under stifling debts and half a billion more loaded up with Planet Ho, then I've got a half-finished casino to sell you.

February 28, 2010 4:38 PM Posted by mike_ch

atd: Doh, I thought this was the quarterly thread.

I never ever got the appeal to Total Rewards, though now that I've read the nuts and bolts about it in their flyers I can understand some of the appeal. One of the things MGM could really learn to offer is the ability to roll your points eternally so long as you earn at least one point every six months. As someone who doesn't gamble enough in 12-18 months to earn a complimentary cup of water, I'd feel better about trying to build up a balance if I only had to play $5 every so many months to keep rolling over my points.

It also answered some questions I've long had, such as why it seems like people I know who play at Harrah's casinos seem to be constantly on vacation to Vegas, compared to players at other properties who travel here less often.

February 28, 2010 8:23 PM Posted by atdleft

Mike C-

Well, there's only so much Harrah's can do under Sarbanes-Oxley. And considering how many markets they're in (with New Jersey being one of them!), they can't really get away with cooking their books anyway.

But anyway, back to Total Rewards. Remember that this and MGM Mirage's Players Club isn't really meant for people like us who occasionally toss a few bucks in the video poker machine. They're meant for people who blow through hundreds, if not thousands, of dollars on the slots and video poker PER DAY.

And yes, this has really been the secret to Harrah's success. Total Rewards is all about recruiting gamblers and making them loyal to the Harrah's brand. They stay at Harrah's hotels, play at Harrah's casinos, eat at Harrah's restaurants, and go to Harrah's shows. And the more one plays at Harrah's casinos, the more one is "rewarded" with trips to Vegas and special show deals.

Ironically, I've received better hotel deals from MGM Mirage since they just offer deals to all their members and don't track casino play and tie offers to it as religiously at Harrah's.

March 1, 2010 11:58 AM Posted by American Gaming Guru

Hunter, I guess I am picking on Jeff too much. I went back and listened again. I agree with the spirit of his argument on how AC will be in trouble with a Wynn resort in Philly. I believe Dr. Dave corrected him appropriately in regards to the convention center, Harrah's investments in AC etc. Some other points....I dont believe MGM owns any land on the boardwalk or "near the original casino strip". Their former land holdings on the boardwalk are were where Revel is currently being built (slowed down..not stalled). Borgata recently added The Water Club and Trump built a large tower at the Taj (in addition to the Harrah's tower he noted). The Pier at Caesars and the very successful Walk (outlet shops) have really added to the retail and dining offerings in the city. So while yes, AC will find itself in more trouble, if/when Wynn goes to Philly, but hey, AC seems to be trying! Perhaps just not hard enough. My apologies Jeff. Did not mean to get picky.

March 10, 2010 6:41 PM Posted by Ted Newkirk

I respectfully disagree with the panel on the Obama flap. Goodman's tantrum and other outlets keeping the story alive is a fantastic move for Las Vegas tourism. To wit:

Oscar's statements were paraded and replayed and replayed on right-wing radio shows like Rush Limbaugh and Sean Hannity. Put aside however you feel about those guys. Bottom line is that the story was pounded home to well in excess of 10 million people who really don't like Obama.

Toss in the mainstream coverage the story got and Obama's near 50% disapproval rating, and you have a rebellious backlash of "Who is he (Obama) to tell me where to vacation, how to spend my money, or preach at me about anything" which could very well result in hundreds and hundreds of thousands of extra Las Vegas visits this year.

BTW, I rode the hell out of the story didn't cost me any readers (subscribers)

Now... we get to sit back and watch both Jim Murren and Rossi Ralenkotter both sit back and take glowing credit for the extra visits.

Speaking of, surprised no one picked up on this blog post by R&R:
http://www.rrpartnersblog.com/2010/02/08/too-many-beavers-and-briefs-mean-not-so-super-ad-blitz/

One day after the Superbowl, R&R blogged about an in-house meeting that critiqued the Superbowl ads. Let's put aside the notion that R&R is a generally inept company whose greatest claim to fame is churning through hundreds of millions of LVCVA ad dollars. (I could take a hobo from the Las Vegas Rescue Mission, give them that kind of money, and probably get the same results. I'd love to see R&R survive if they had to actually get and retain mainly private sector clients who demand accountability). Put aside how laughable having them critique ads by some of the biggest brands in America is. Companies that live or die by their advertising, and ad agencies whose contracts live or die with the success of the brands..

Look through that blog post very carefully. Something glaring is missing. Something like... oh, the KIA ad featuring Las Vegas! Kia and the little, boutique ad agency they use completely put out a better Las Vegas ad than anyone at R&R could think up. Even Mayor Goodman was quoted as saying that it was a better Vegas ad than the stuff the "we" (LVCVA) put out.

R&R refuses to take outside concepts or suggestions. They claim that basically no one else is capable of coming up with what they do or the intense thought process that goes into their campaigns. Evidently, no one but KIA.

Back to the LVCVA: Ralenkotter has been picked as chairman of the new U.S. Travel and Tourism Advisory Board. Talk about having people bamboozled. That guy seems to find endless way to spend zillions of dollars of public/private partnership money. Wonder who the juiced-in ad agency this new board uses will be?