1. Welcome to VegasMessageBoard
    It appears you are visiting our community as a guest.
    In order to view full-size images, participate in discussions, vote in polls, etc, you will need to Log in or Register.

Why not comp the stayers instead of just the players?

Discussion in 'Comps' started by boogaloobboy, Apr 30, 2014.

Thread Status:
Not open for further replies.
  1. boogaloobboy

    boogaloobboy Tourist

    Joined:
    Feb 3, 2014
    Messages:
    62
    Trips to Las Vegas:
    15
    I realize up front this will be an idea that most people here don't like, as this is a gambling board, but it makes incredible amounts of sense to me. What got me thinking about this is reading bast BeeJay trip reports. Trip reports where many times he came home well in the black. Sure everyone has losing trips, but there were several times where he had an entirely free trip and walked with profit that totally funded another trip. So why chase THEORETICAL loss when casinos can chase ACTUAL loss. People who spend thousands on tables and cabanas never win...

    So why don't the casinos comp the big spending non-gaming guests like they do gamblers? Just as there are only a fixed amount of gamblers I would assume that there are only a certain number of people willing to spring for bottle service at clubs and the like. Do casinos offer room rebates and the like for people who rent cabanas at dayclubs and do bottle service at night? As sad as this realization is for those of us who go to Vegas to gamble I would think the huge profit margin on these guests, who spend 2-3 K for Cabanas and then thousands for bottle service at clubs, all of which are fixed cost and come with no risk of winning are the chase demo now. Why would the casino care where the revenue comes from?

    I can only assume the reason for this is that the comp system is so ingrained in the "gaming" community that players would totally mutiny without it. We gamble and we expect comps for that. If we win, doubly good for us! So is it just that it is not expected or asked for from the non-gamers? I mean these people are (assumedly) paying full rate for rooms on top of the other money they spend! Anyone with half a brain can see why comps are on the decline and that trend isn't changing.

    I guess the bigger question is WTF happens when EDM dies and people stop having such interest in clubbing. Will the pendulum swing back towards the gambler? I am just absolutely fascinated with what the next few years hold for Vegas, although I am terribly afraid that it is dying as a gaming destination. On strip of course.
     
  2. SelfMade

    SelfMade Tourist

    Joined:
    Jul 15, 2011
    Messages:
    143
    Location:
    Location Independent Lifestyle
    Trips to Las Vegas:
    0
    Profit Margins. The gambling has a PM of 40% something. Dining is 10% as a comparasion.
     
  3. boogaloobboy

    boogaloobboy Tourist

    Joined:
    Feb 3, 2014
    Messages:
    62
    Trips to Las Vegas:
    15
    I didn't say dining. I said cabana's and bottle service. Alcohol profit margins are like 2000%.
     
  4. Readingfanman

    Readingfanman Low-Roller

    Joined:
    Oct 29, 2013
    Messages:
    361
    Location:
    London, UK
    Trips to Las Vegas:
    3
    The main question I would ask back to this is, Why should they? People are prepared to spend $2000 on bottle service currently with no comps, what would drive the resorts to want to comp them now?
     
    NFL Championship Weekend
  5. boogaloobboy

    boogaloobboy Tourist

    Joined:
    Feb 3, 2014
    Messages:
    62
    Trips to Las Vegas:
    15
    Property loyalty same reason they comp players?
     
  6. melbedewy

    melbedewy Low-Roller

    Joined:
    Apr 2, 2012
    Messages:
    231
    Trips to Las Vegas:
    12
    To have them come back and spend another $2000.
    :ssst:
     
  7. SH0CK

    SH0CK Stylin' and Profilin' Quasi Tech Admin

    Joined:
    Nov 2, 2001
    Messages:
    12,918
    Location:
    Tennessee
    Trips to Las Vegas:
    37
    mLife and Total Rewards do give you points when you charge these items to your room or turn in the receipt to the players club desk. As long as the place you purchased them from is owned by the hotel.
     
  8. undathesea

    undathesea Grandissimo

    Joined:
    Feb 26, 2013
    Messages:
    1,664
    Location:
    Washington D.C.
    Trips to Las Vegas:
    20
    As I understand, the hotel and casino operate as two separate entities. The casino pays for the gamblers to stay in the hotel on comps.

    Secondly, the clubs operate as independent entities. Same with the restaurants (most).

    The pools are owned by the hotels, so that's a fair comment. At MGM, they have a players club that gives you 25 tier points for every dollar spent at their resort. Those tier points collect to give you a certain tier level. Those tier levels are associated with discounts at the resorts... I think platinum receive 30% off the rack room rate and discounts at the resort stores. Better access to restaurants, etc.

    So, as you see, they do have perks for spending money at the resorts. It's already in place.
     
  9. Letsdoit

    Letsdoit Low-Roller

    Joined:
    Dec 7, 2012
    Messages:
    220
    Location:
    Montreal
    Trips to Las Vegas:
    9
    Hi,

    Here is my 2 cents :ssst:

    The only way that they (Vegas Hotels) get me to come back 3x per year is with their marketing offers. If I were a club goer I would not pay an 800$ flight just to clubbing in Vegas when I can do it here at home.

    However, if you are an avid clubber and drop 2K each time you deserve at least a comp room.

    Another note is that alot of these clubs are not owned by the properties that they are in. So that may play a part in the reason why comps are non existant.

    Cheers.
     
  10. wellmel

    wellmel Low-Roller

    Joined:
    Mar 18, 2014
    Messages:
    356
    Trips to Las Vegas:
    17
    Maybe EDM will die, but clubbing won't die.

    But I do agree that people that spend a ton on bottle service and such should get comped too. However, it sounds like others know a lot more about why that doesn't happen.

    But I don't have that kind of money anyway, so it wouldn't apply to me.
     
  11. Frankr163

    Frankr163 Low-Roller

    Joined:
    May 5, 2011
    Messages:
    384
    Location:
    Buffalo, NY
    Trips to Las Vegas:
    40
    I think you may have answered you own question.
    Comps were put in place to reward loyalty and encourage return visits. I believe the crowds that utilize day clubs, night clubs and bottle service are definitely not in that demographic.
    The consumers age out, or tastes change. Hakkasen is hot now, but years from now it will go the way of Studio 54.
    While there will always be 20somethings with disposable income and no responsibilities they are not loyal to long term establishments, only to what is hot at the moment.
     
  12. BeeeJay

    BeeeJay President of The Red Lobster Hostess Satisfaction

    Joined:
    Aug 23, 2008
    Messages:
    7,725
    Location:
    Chicago & Jersey City
    Trips to Las Vegas:
    85
    I think its a good point and many of the properties are started to address it via points for all property charges. On the other side they are cutting back gambling comps.

    My guess is its more tradition and expectation than anything.

    The gamblers basically "demand" comps or they will go to another property willing to offer them.

    For clubgoers its slightly different as the hot clubs have people waiting in line to get in, I don't see anyone waiting in line to play blackjack.
     
  13. Readingfanman

    Readingfanman Low-Roller

    Joined:
    Oct 29, 2013
    Messages:
    361
    Location:
    London, UK
    Trips to Las Vegas:
    3
    How many of them are repeat visitors to clubs/cabans currently though? I'd wager there's a good % of people who come more than once, and don't care for the loyalty. Fact is, if you're laying out $2K on bottle service, a comp for a free buffet or whatever probably won't interest you.

    I can see why you can argue the point, however why should the hotels give away parts of their huge margin on these items, when in reality, most are busy/full during peak times as it is without giving out comps?
     
    NFL Championship Weekend
  14. Fafa2e

    Fafa2e Low-Roller

    Joined:
    Oct 7, 2011
    Messages:
    361
    Location:
    Florida
    Trips to Las Vegas:
    40
    I agree with others that most of the night/day clubs are owned and operated by third party companies (Light Group, etc.) and the Casino/Hotel simply receives a portion of the revenue that the clubs generate. It may make sense that the night/day clubs offer their regular customers / big spenders free rooms at the hotel that the club resides in, but I would expect that the club would have to pay for the rooms.
     
    Bonus Money to Burn
  15. boogaloobboy

    boogaloobboy Tourist

    Joined:
    Feb 3, 2014
    Messages:
    62
    Trips to Las Vegas:
    15
    But how do you retain said nightclub patrons? You cannot always be the newest and best, that is a game that is a losing proposition in a place with as much competition as Vegas. You can book the biggest DJ's but those cats are clearing tens of thousands a night. The nightclub game is so volatile, you can have a property that is jammed to capacity one month that is desolate next month because someone else opened something newer/better/brighter. Would room comps draw those people back in despite the "hotness" of the club? Or would they just crash the room and go party at the new hot spot anyway?

    I guess renting these places out to groups who run the clubs removes the Casino group from some of these headaches, their will always be a line of people waiting if the current nightclub fails.

    What do you think the theo for an average vegas visitor is for a 3 or 4 day stay? I would be surprised if the average is 2 grand theo in three days, which is what it costs to rent a cabana on a weekend. I just see the writing on the wall when it comes to comps for people who go for 3-4 days with a 2-4k total gambling budget....
     
  16. kps

    kps High-Roller

    Joined:
    May 2, 2013
    Messages:
    784
    Trips to Las Vegas:
    22
    The only one that you can possibly question is Wynn as all of the other clubs and properties are independent of each other so hotels don't need to comp rooms for the person staying there to hit the clubs/pools. They are not receiving any money from you directly due to the space is rented out. So why should they comp?

    The hotels will be around long after the EDM scene slows down just like they have been here before the scene blew up. There's a reason why the lights stay on 24/7 in Vegas and it's not because of bottle service.
     
  17. undathesea

    undathesea Grandissimo

    Joined:
    Feb 26, 2013
    Messages:
    1,664
    Location:
    Washington D.C.
    Trips to Las Vegas:
    20
    This isn't a comment just to you, but to anyone who thinks a clubgoer should get comps. The main question is why?

    How many other businesses out there would pay for someone to stay in a hotel to visit their business for $2k worth of business? People drop $2k walking around Macys and Costco in a few short hours. Why would a nightclub be any different?

    Hyde, XS, Tryst, Hakkasan... They're not owned by the hotel. They're owned by the Light Group and people who own and operate clubs. The places that they operate in are leased from the resort. So if those clubs want someone to come to the club, they have to pay for their hotel stay. And, if some joker won't come to the club unless he gets a free stay, there's another person willing to step in and scoop up his reservation and pay $2k.

    Believe me, there's a never ending supply of people for the clubs. And, to guard against that, they pay people to promote the club and those guys are out working in the casino and on the strip to get your body into the club.
     
  18. boogaloobboy

    boogaloobboy Tourist

    Joined:
    Feb 3, 2014
    Messages:
    62
    Trips to Las Vegas:
    15
    Then why comp gamblers? Who can actually WIN money. Wouldn't it make sense that gamblers who have a budget of 2-3 K wouldn't be impressed by a free buffet or room either? Yet we all obsess over these things and they make a HUGE difference in where we stay. Do you consider comps "irrelevant"? You are going to the same full properties so why are you (the gambler) different from someone who doesnt? You think they don't like "free" shit????
     
  19. dhlamar

    dhlamar Low-Roller

    Joined:
    Jul 23, 2013
    Messages:
    423
    Location:
    Washington DC
    Trips to Las Vegas:
    12
    I would say the difference is when you get bottle or cabana service you received what you wanted there was no loss, but a gambler puts money in a slot machine or on a table they are expecting to win money and they usually don't. To reward gamblers for tossing money into the casino they say comeback and do it again. If you ordered bottle service and had a good time then you will say to yourself I'm gonna come back and do that again.
     
  20. Kickin

    Kickin Flea

    Joined:
    Aug 10, 2012
    Messages:
    3,414
    Don't be surprised if they eventually do! As others have noted, casinos have already begun providing perks to people based on hotel spend. My brother and his wife went to Vegas the first time together last year, no meaningful gambling, but they stayed at Aria and earned Gold on hotel spend. So they already have more "tier perks" than the average gambler.

    But even if they start more meaningful reinvestment into non-gambling guests, don't expect it to be too much. Most hotel reward programs reinvest about 5-7%, the most generous close to 10%. At that rate just to get a 4 day trip comped would take staying for 40 nights.

    They have to care! Gambling still has the highest margins so it is the most valuable revenue. Also you need to remember that gambling is 100% discretionary, F&B is not. If you start comping people based on F&B you are effectively promising to reinvest in every single person who walks in the door because everyone needs to eat, drink, and sleep.

    Another thing to keep in mind when you are talking about bottles at clubs and cabanas is who do you assign that value to? We used to go to clubs all the time and spend a lot of money, but it was an entire group. People don't buy bottles to sit and drink alone or rent cabanas for themselves. Gambling comps are all individually earned, but if I'm a hotel owner and I comp a guy who spent $5k at the club I have no idea what his spend will look like if he shows up alone or without a large group.

    Does it really matter? We talk a lot on this board about the EDM scene overtaking Vegas but its simply not true. For big operators like MGM the clubs only make up about 3% of their domestic revenue. And when EDM dies (which it will) all that revenue won't simply disappear, casinos will offer the next thing that replaces it.

    I think you know alcohol profit margins aren't anywhere near 2000%, no more so than a restaurant's only expenses are the ingredients of its food.
     
Thread Status:
Not open for further replies.