By Robert J. Thompson
Recently I found myself in Las Vegas for a few days. Things have changed in Sin City. The days of $5.00 prime rib dinners and $25 rooms is long over and other than the cost of living simply going up along with inflation there are reasons for this.
While in Vegas you may learn that parking at Caesar’s Palace, Bellagio, Bally’s which was once free will now cost you between $7and $12. Actually it will cost to park in all of the Caesar’s Entertainment hotels. This has been in effect for about a year. It is the tipping point for many folks going to those hotels for gambling or in the case of the Bellagio and Caesar’s Palace it slows down the retail shopping and some dining, especially at Caesars for many. it won’t break the bank, but it is a tipping point for some
However, the parking garages are still pretty full. But doesn’t this look like nickle and diming people. Well, yes but look at the economics. At Caesar’s take 1,000 parked cars and let’s say they all stay for the minimum time at $7.00 (2 hours) and forget the Nevada parking wavers. Let’s assume that once this time is met the place goes empty (yeah sure!)–no ins to replace the 2 hour outs–just a one time hit.
This means using the above minimums, it will bring in $7,000 a day. Multiply that for 365 days and you come up with about $2,500,000 a year. That is pretty serious money for something you gave away for free for decades. Then time that plus or minus for their seven properties in Vegas and it mounts up. And if you wee to take this times the many ins and outs during the day it gets much bigger. But it is their game–don’t like it, then don’t park there and don’t go to the hotels. Or just shut up and bite the new cost bullet. Got to admit, it feels like the cryptocoin market currently–only in the opposite direction
Then come the so called resort fees in many hotels– across the country for that matter. All hotels in Vegas charge them now–as do most hotels located in resort areas across the country. This is a way to advertise lower room rates. It also is a way to counter various room rates for off season times such as Aspen for the summer. It is a pain to most of us but it is what it is.
Vegas was the best location for great meal deals but those are pretty much gone. You may find a decent prime rib for $15.00 but even that is going away. The hotel Silver Sevens for yeas had a great deal on prime rib. Their 10 ounce (don’t believe it–the thing must at go at least 14 ounces) big potato, and great veg. side dish went for just $10 if you had a Player’s card at their hotel. Anyone can get one and they are free–and the locals would go there heavy on the weekends. But recently that deal ended. Then again at the full $14 it is still a deal.
So what has caused all of this? Several things. First just the cost of doing business. Increased pay scales at the hotels. Insurance charges and the economy in general (which has improved greatly since President Trump came in to office to the chagrin of the democrats,left wingers and worse).
But operation costs for any business never come down any more. Like anything else anywhere the cost of doing business is going up. Some of the hotels in Vegas have 3,000 (or more) people employed there, that is big overhead to say the least. Then the whales are not coming to Vegas like they once did.
Whales is a term for the super rich gamblers who would guarantee anywhere from $100,000 to a million dollars gambling one week to a hotel. For this they would get special suites in the hotels that could be thousands of square feet of incredible luxury and personal service providing anything for these clients–and that means anything (legal). You want flower petals sent in from Paris for your bath tub filled with milk from lambs in New Zealand–you got it! Over the last 20 years these mostly billionaires are majority Chinese.
Their preferred game is baccarat. A card game that is actually pretty much like flipping coins (does NOT look like what you see in a James Bond movie) with a percent or so always taken by the hotel unless you lose the bid. It has the best odds of any game in Vegas but the bids can start pretty big too depending on where you gamble. The big hotels always furnished a plush private room, private catering and dealer for the big money players which could be a million won or lost in a night by just one person. This is a favored game by the Chinese and many big bucks occidentals. Things are changing.
The really big gambling money whales are not coming all the way from the orient to Vegas to gamble like they once did. Reason being is cities like scenic Macau China are now the major gambling centers. It is estimated that Macau with its massive new resorts/hotels owned by many of the big operations in Vegas are taking in five times the money Vegas does in gambling.
About 35 years ago Vegas operations started positioning its many operations to be family friendly sort of “Disneylandish” for the kids to come with mom and dad. Well that worked–sort of, but a few years ago Steve Wynn saw the potential folly of this and began to build for gamblers again but that may be too late. But, as stated earlier he and the other big dogs in Vegas also have operations in Macau and elsewhere in China.
Vegas still benefits from its wonderful location and facilities for conventions. It can easily handle two or three conventions of 60,000 people each and smaller ones all at the same time. But these people are there for the convention, not the gambling.
These people spend money on food and hotels but little on gambling which is part of the reason for those suckie resort fees. They pay for them but rarely use them in the pools, saunas, hot tub, etc. Convention people get up, eat breakfast and are gone until they return in the evening for dinner somewhere and bed. And they have to park somewhere so here comes some of that money depending on where they may stay and the terms of the parking for guests.
Vegas is ripping down some of Fenton Street buildings for new resort construction in the downtown area–good! It has been a dump for years! Fenton and the down town area was Las Vegas until the strip took hold.
Amazon and amazon Prime is killing the Vegas shopping centers off (well across the country) and to me that is a terrible shame. I was informed that we may talk more of this in a future blog here at Mantalk so I will let that financial mess hold.
Bottom line and Nevada still does not have a income tax to its citizens, but that could change if the casinos don’t bring en enough money to off set that revenue stream. State politicians are all after every penny the can beg, borrow, or steal. The best example is their support for federally illegal marijuana in California, Colorado, Washington and Oregon and more as the sales tax on that continues to bring in the money the elected wiesels to use so they can buy off voters with good deeds and remain in elected in office.
Anyhow things are changing in Vegas as they have for the last 60 years. It is not the bargain it once was to the average Joe, but ya know what, it still is a great buy for most of us regardless. Just be ready for a bit bigger sticker shock when you go there.