Seven Year Switch: How Las Vegas Hospitality Has Changed – Vegas Seven

Not to fear. Yes, I talked about the past seven years of casinos in Vegas Seven this week. Yes, I began with a scenario from the book of Exodus. But no, I have not abandoned talking about gambling for a career in Biblical exegesis. This was just my way of trying to think more deeply about what the last seven years mean:

…this hasn’t turned into a soul-seeking tract. I only want to remind you how deep the idea of economic cycles runs in us. We understand that there will be good years and bad years, and that if we fail to plan ahead, the bad years will be tragic. If Biblical wisdom doesn’t do that for you, next time I’ll talk about Kondratiev waves.

Read on: Seven Year Switch: How Las Vegas Hospitality Has Changed – Vegas Seven

So it all seems good, but I’m not content to say “the Recession is over!” and leave it at that. As I discuss towards the end of the article, there is some evidence building that more fees has slowed or even halted revenue growth in other areas. It’s not a concern this quarter, but someday, it might be.

Resort Fees Costing Casinos Goodwill in Vegas Seven

I’ve got a little resort fee reverie in Vegas Seven this week:

Resort fees—those mandatory per-night add-ons of between $3 and $25 that include charges for services guests may or may not use during their stay—migrated to Las Vegas in the early 2000s, but have recently gotten a second wind. Caesars Entertainment had for years railed against them, even staging a showgirl “protest” march down the Strip in July 2011 to call attention to its policy of not charging a resort fee. Yet Caesars recently reversed course and began charging fees at its Las Vegas properties. And the South Point, another casino that had advertised its lack of resort fees, also started charging them.

via Resort Fees Costing Casinos Goodwill | Vegas Seven.

If you can’t guess, I’m not a fan of resort fees. My feeling is that if you don’t like them as a customer, there’s no reason to implement them as a manager. Clearly that’s a minority opinion, or other people really do like them.

Tiered pricing thoughts

A few weeks ago, I started talking about a tiered pricing model for Strip hotels on the Vegas Gang. I took some time to

On one side, pro-fee advocates argue that they offer convenience. On the other, resort fee opponents maintain that fees are poorly advertised and shock the customer. There may be a way to please both groups of visitors, those who want convenience and those who want low prices. A tiered pricing model, in which customers get to pick one of several levels of service for the same room, might help generate additional revenues and give guests a greater feeling of control over their experiences, which may translate into greater customer satisfaction and stronger bottom lines.

For example, imagine a three-tiered pricing structure for a guest room, with “standard,” “gold,” and “platinum” levels.A guest booking a room at the “standard” rate would receive a room key and not much more. He or she would have to pay extra for virtually every other hotel service; for example, to visit the health club, use the Internet, or make phone calls.

At the “gold” rate, customers would receive everything that came with the standard, plus free wireless Internet, phone calls, bottled water, copies of the local paper, etc.

For guests looking for more, a “platinum” rate could deliver all the benefits of the gold rate, plus several extras — dining credits, a selection of prix fixe menus at select hotel restaurants, tickets to the hotels big show, complimentary spa services, and nightclub admissions.

Guests opting to “go platinum” will value cost-certainty and convenience over spontaneous choice.

Some resorts are already offering something close to platinum-tier pricing. Wynn Las Vegas, for one, offers several packages, including a golf getaway, jetsetter package, romantic retreat, and the Ultimate Wynn Package, that offer guests varying levels of amenities.

We’ve seen the trend towards cost certainty become popular over the past year in Strip restaurants. From all-day, single-price buffet offers to prix fixe gourmet dining, visitors have responded positively to the chance to pay one price for an expected level of service. It stands to reason that an operator to apply this model more broadly to the total guest experience could become a trend-setter.
Companies owning several properties along the Strip are particularly well-poised to offer a variety of dining and entertainment options that will generate true economies of scale and diversity.

Whether it’s called tiered pricing, a vacation package, or something else, this may be an idea that needs to be explored more aggressively as resorts seek to defend their market share in what promises to be a challenging year.

via Las Vegas Business Press :: David G. Schwartz : Tiered room pricing: A modest proposal.

I came in about 250 words over for the article which was shortened for publication, and I included some of the cut material in the quote above where I lay out the proposal.

The industry’s moving in a few different directions right now, and this is one of them. I’m sure that there are a million back-of-the-house reasons not to do this, but coming at this from the consumer’s perspective, it deserves consideration.