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Vegas vs. Macau & The Rest of the World

Discussion in 'Misc. Vegas Chat' started by maximus56k, Jul 3, 2012.

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  1. maximus56k

    maximus56k Tourist

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    We often see that the large resorts in Vegas struggle to report in the black. Since this is by far my favorite place on EARTH I often ponder the issues and how to fix them.
    I don't have chicken little syndrome or anything but I know the big companies like MGM-Sands-Wynn all need to get the revenue up in Vegas.
    The eco boom in Asia has the super rich whales in love with the casinos in Macau. Those guys aren't going to fly 8000 miles to Vegas unless the casinos here can upstage the Macau casinos in a BIG way.
    So here are the questions........Now I read this board ALOT and I know we have some sharp cats on here both living in and out of Vegas:

    Do the Vegas resorts need the Asian Whales to survive?

    Can North/South American gamblers be attracted to the Nevada gambling Mecca in enough volume where the Asian gambler is not needed?


    Some say that the Hangover Brigade has brought on the kids with no $$ and has been a negative for the casinos
    Are the crowds that are being attracted the wrong ones?

    Are the rewards programs being run all wrong and is it costing the resorts in the end?


    How would you fix it?


    How does Vegas set itself apart from the Indian Casinos and get people out of them an on to the Strip?

    I asked one of my buds that is a wealthy business owner & travels to Caesars once a month to answer these for me. Here are his "answers"! Warning he is a bit of a nut.

    1.NO
    2.Yes
    3.Yes the Hangover screwed everything up and filled the strip with a bunch of horny broke kids! funny movie though
    4.I hate that rewards program, I only talk to my host. I donated 200 grand to them last year and I will not let some girl tell me I am need to check some crazy numbers before they will give me a room
    5.scrap it and start over
    6.legalize prostitution and regulate it (the Asians will come too for the hot blondes)
     
  2. Nevyn

    Nevyn VIP Whale

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    I think you are just a bit too worried about this. Vegas will do just fine.

    They are dealing with expensive debt servicing for recent construction at the same time capacity on the strip went way up, and demand (due to economic woes) went way down.

    And blaming the Hangover for drunken youngsters looking to party in Vegas is a bit like blaming the film Wall Street for rich jerks breaking the rules to make money.
     
  3. jugdish76

    jugdish76 Low-Roller

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    Vegas just needs the national and global economy to turn around. It isn't like this hasn't happened before. Every recession hits the city the same. This one has just been more severe and longer lasting than the previous ones most of us remember.

    I don't think Vegas is competing with places like Macau, or domestically Atlantic City or casinos in Mississippi. Most of the same companies that run most Vegas casinos run the casinos in other parts of the world. So while the Vegas line might be lagging a bit from other gambling destinations, it isn't hurting the companies themselves one bit.

    Most of us have altered our spending habits the past four years, and Vegas for many of us is a luxury we're willing to give up during hard times. Or if not, one we're willing to limit (maybe staying at cheaper properties or fewer days). Most will probably return to the old ways in better times.
     
  4. Polemarch28

    Polemarch28 Tourist

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    You, sir, win points for a solid, well constructed analogy!!!
     
  5. Ike

    Ike Low-Roller

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    MTV is more to blame for the club scene in Vegas than the Hangover ever could be.
     
  6. worldtraveler661

    worldtraveler661 VIP Whale

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    ok so lets take away the party people going to Vegas. Whats that do? LOL. Takes away revenue everywhere. No matter if they dont play in the casinos, they still book rooms, eat at the restaurants, drink at the bars, spend money in the clubs. Basically still dropping money in these properties.

    Ok so what if they dont gamble as much as people who go there strictly for the gambling, it still brings in people into town to spend money.

    Its stupid to blame that for how Vegas is now. Can't blame MTV either. Vegas tourism did that whole marketing to bring on the "party" atmosphere on their own. "What happens in Vegas, stays in Vegas" wasnt a phrase made for gamblers. It was a mindset to bring in the people who wanted to party and live it up in Vegas.

    Like someone said, the reason why they are in the red is from all the construction loans and all that. It'll just take time to readjust and Vegas will be alright. Its doing fine packing in the strip now, I'm sure that wont change anytime soon.
     
  7. leo21

    leo21 VIP Whale

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    What does Vegas need to survive? To pay it's bills and make better judgements. Most of the casino companies would have gone through the recession just fine if they weren't saddled with debt from ill-timed expansions and mergers. And some of those companies still don't have a way out. They now have to balance much needed renovations and expansions in new gaming states with settling up. The players clubs aren't keeping them from being black. Competent casinos should know how to manage the costs of them in order to generate profits. I can honestly see bankruptcy in the future for some of these companies. When you see what happened with Stations, it can't seem all the scary to them. The owners kept most of their assets and made out like bandits in their personal finances.

    Asians and other foreigners are still finding reasons to come to Vegas despite Macau. Vegas just needs to be Vegas in that respect. Again, if the casinos were spending within their means, they would be profitable. As for casinos out of state, one of the things that drive people to them are out of the casino's control. They can't control the airlines and the only defense is to bring Vegas to people who won't be able to fly there.

    As for the club kids, they do make money on them, just not in the casino or in the high end restaurants. The only problem I see is that at the end of the day, the target audience is still middle aged women and most of the efforts of the casinos are geared to the kids, whether it's marketing or decision on restaurants and the like. The one major mistake the casinos are making is they are alienating some of their core demographics to court a generation whose money is soon to run out. A person whose retirement fund is shaky can probably still work. But how do you bet on a kid who can't get a good job and is saddled with a ton of student loan debt?
     
  8. maximus56k

    maximus56k Tourist

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    Happy Independence Day to you all!:usa:
    Today I saw one of the 007 Marathons on TV and during "The Man With the Golden Gun" James must travel to where else...... Macau. All of the sudden the sign pops up CASINO dE MACAU! Got a kick out of that.

    Anyway I was reading the very interesting responses to the post.
    First Nevyn I am not really worried that Vegas won't make it. There won't be a final guest in town that shuts off the lights as they leave. I started going in '76 but I have really taken note and watched Vegas' metamorphosis mostly since I got married at the MGM in '94. I saw the crash after the reckless growth and I only worry that Vegas morphs itself into a shell of what it was. Some of the decision making at the upper mgt. levels has not been the best.
    Second I don't "blame" the Hangover or MTV. Some people have said that since the movie the party crowd has changed it's level of let's say carousing. Please do not mistake my attitude because I think that partying is an integral part of the Vegas' atmosphere-to a point. I live in Austin,Tx. home of a King Kong sized party district called 6th St. It's packed with more 20 somethings than you can shake a stick at constantly. They open and close the bars along this area like dominoes falling. A couple real estate friends of mine talk all the time about the difficulty the owners of the clubs face keeping the younger crowds coming and of course drinking before the next new thing opens down the block. It's tough.
    In contrast to Vegas Macau has a very small if any nightclub culture that is separate from the gambling areas. According to the WSJ last year Macau recorded 5 times the gambling revenue over LV. That leads me to believe that the party crowd has little if anything to do with the profits at the casinos. http://live.wsj.com/video/why-macau-is-so-important-to-us-casinos/974A6687-28EF-40D6-8DB3-AA1CB3044818.html?mod=wsj_article_tboleft#!974A6687-28EF-40D6-8DB3-AA1CB3044818
    In agreement that Vegas brought this on with the whole "What happens in Vegas" deal I do not agree that it was actually the way to get the big bucks in for the real money. This is where I agree with leo 100%:

    "As for the club kids, they do make money on them, just not in the casino or in the high end restaurants. The only problem I see is that at the end of the day, the target audience is still middle aged women and most of the efforts of the casinos are geared to the kids, whether it's marketing or decision on restaurants and the like. The one major mistake the casinos are making is they are alienating some of their core demographics to court a generation whose money is soon to run out. A person whose retirement fund is shaky can probably still work. But how do you bet on a kid who can't get a good job and is saddled with a ton of student loan debt?"
    Today 04:38 AM

    The wealthier Vegas friends we have absolutely schedule away from potential things like March Madness, Spring Break, and any other time when the Strip is packed with the youngsters. This really doesn't bother me but if I invite them NO WAY! That is the one of the things that makes me wonder why Vegas hasn't spent more time and money on really fixing the MLIFE's and TR's up and put all the effort they put into attracting the Party Posse over to the demographic above. In layman's terms if Vegas loses say 50% of it's Asian whales to Macau and you were head of marketing say for MGM would you target the demo of 20-30 year olds with a potential average income of $25,000 yrly. and $75 grand in student loans to pay off? I'm no Mr. Spock but I don't see the logic. Happy 4th!:peace:
     
    Last edited: Jul 4, 2012
  9. Nevyn

    Nevyn VIP Whale

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    You're acting like the crowds are mutually exclusive and can't be marketed to in the same time, and I just don't buy that.

    The only basis you seem to have for it is rich friends who don't want to go on party weekends. But the same crowds that keep them away also make the casinos a fortune. And your friends still GO, at quieter times when the casinos need them more anyway.

    The marketing may seem geared towards the young, but that's because the older are already hooked anyway. Its the Joe Camel philosophy, hook em young. The kids overextending now may hit financial rough patches, but when they find solid footing Vegas will be where they go to reclaim the good times. In the meantime, its not a static demographic group but a rotating one. One group finds harsh reality while a new crop behind them overextend chasing their big brother's stories of drunken debauchery.

    As for the Asian whales, I'm no expert, but first I doubt many of them would pick one destination or the other exclusively. And they are not the only whales, regardless. Besides, attracting them is a wholly different kettle of fish than mass marketing. And its easy to give them private areas away from the madding crowds.

    Vegas' strength is in having something for every one. Cheap deals for the low rollers. Hot nightclubs and beach clubs. Big games, big entertainment and attraction. Luxury accommodations, dining and shopping. Endless convention venues. They aren't all in on the party crowd. But they aren't going to shun that crowd's money (or debt) just to be more attractive to baby boomers or even chinese tycoons.
     
  10. leo21

    leo21 VIP Whale

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    I hate to admit it but I am a few months away from officially being middle aged. Speaking from that perspective, I don't feel that they are marketing to everyone. And it doesn't matter whether I may be hooked - I don't like being taken for granted. That's how I feel. If Linq is what they claim, then there maybe something new for me. But more often than not, I feel other places appreciate me better than Vegas. Sure I went this year but I used to go two and three times a year and that's not going to happen anymore.
     
  11. Kathy98

    Kathy98 Tourist

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    I see. I washed my hair,
     
  12. Bubbavegas

    Bubbavegas VIP Whale

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    The construction debt hurt as has been mentioned, too much in too short of time and then hit by the economy the last three years hard. Several articles I have read the past year have mentioned how much the NA casinos have taken from Vegas as well as Macau, the existing problems were only accelerated by those two gaming options. One thing about it this is far from the first time Vegas has been hit hard by a multi faceted issue and like my own state they have bounced back time and again, improvise, adapt and overcome.
    One thing I have seen myself is that a low/mid roller like myself is getting more comps offers than I ever did, give me free stuff and you merely add to the reasons and convince me I made the right decision to quit the NAs here several months back. The low/mid is what keeps Vegas rolling and bringing us in with offers IMHO is a great start to fixing the problems. We gamble, we eat, we go to shows and we shop, just not like a HR does, but when we win we don't take near the amount a HR does. Far as the Hangover analogy as was mentioned these credit card wonders do more than party and to think they don't bring in good revenue is being narrow minded, they gotta sleep somewhere, they gotta eat somewhere, they pay for cabanas at the pools and they definitely pay big money for the partying they do. Vegas will improvise adapt and overcome.
     
    Cosmo Christmas
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