It’s Thursday, which means another Green Felt Journal column in Vegas Seven. Here’s the crux of what I call the “split-level strategy”:
So casinos are pursuing a “split-level” strategy that harks back to the 1970s and earlier—keeping prices low for bargain hunters while pursuing high-end play at the baccarat tables. It’s not the mid-1980s approach of making a profit on the sheer margin of visitors, since it’s much more expensive to borrow, build and maintain casinos today. And it’s not the early-2000s pursuit of free-spending travelers willing to pay a premium for rooms, food and entertainment. It’s looking like a little bit of both, taken to extremes.
I talked about this strategy last week, in some detail, but I wrote this article first, so you actually read my response to what I wrote before I wrote it, if that makes sense. Not quite the grandfather paradox, but it does muddle the timeline a bit.
This is also, by the way, what I was referencing when I talked to the LVRJ about the Hard Rock’s plans to chase the Asian-American middle-upper-level roller. It is a huge potential market, but basing your strategy on targeting local players of any ethnicity is risky right now, because of obvious reverses in both employment and housing.
Having looked over the numbers even more closely over the past week, I’m even more convinced that without the high rollers spiking the baccarat numbers, we’d be telling a very different story about 2009. Hopefully I’ll get to that later today.
I went with “split-level strategy” because it sounds retro and the strategy is very, very retro. As I said, it’s totally different from what worked in the 1980s and the early 2000s, and it is risky, but given the economic climate right now, there are few other options.