Over the last 44 years, starting as a fry cook in the coffee shop at Harrah’s Las Vegas in 1975, Tom Jenkin has virtually seen it all. Jenkin, who was named global president of Caesars Entertainment in 2013, anticipates the looming merger with Eldorado Resorts will work out well.
In an interview conducted by Raving Consulting president emeritus Dennis Conrad at this week’s Casino Marketing & Technology Conference at Caesars Palace, Jenkin, a featured guest at the conference, spoke about the pending $17.3 billion cash-and-stock merger between Eldorado and Caesars that will, if approved, create the country’s largest casino operator.
“Harrah’s has grown up through acquisitions,” said Jenkin, who oversees operations across the entire Caesars portfolio. “We acquired Players, Showboat, two Horseshoe companies, Barbary Coast, Imperial Palace, and Caesars, among others. This is (us) being acquired, so it’s a bit different. I have no doubt that these guys are smart at what they do, and they’ve got a plan… It will be good for the company (in the) long term.”
Talking about how gaming has changed over the last 40 years, Jenkin said that, where it was once 95 percent art and 5 percent science, the percentages have flipped, and the business today is now 95 percent science. He said hopes the art returns because the industry has “taken some of the fun out of the casino experience” by being too focused on short-term profitability versus building an experience for its customers.
Some companies have done it better than others, he said, but the drive to produce results is so strong that tough trade-offs are made.
“I don’t know if enough attention has been paid to the customer experience in how we keep people engaged, excited and coming back,” Jenkin said. “When you look at the next 20 years, brick-and-mortar casinos are at a reasonable risk of ending up like brick-and-mortar retail operators, especially in the Midwest – online gets too strong, and the experience we provide isn’t enough to overcome the convenience factor.”
Conrad asked about some Las Vegas casinos instituting new charges, such as parking and resort fees – some of which are as high as $50 – and wondered what impact that’s having on customers.
Jenkin said he doesn’t believe the industry is gouging customers but that the entire experience has changed significantly. A $4.95 buffet “wouldn’t kill you,” he said to laughter, but the product “wasn’t that good. (And) the room product wasn’t all that good. The level of amenities has changed significantly in Las Vegas, and it’s going to need to change in the regional markets as well.
“Whatever you think about Steve Wynn and his antics, he was the catalyst of that change with the Mirage. You can’t create a new level with $4.95. You have to charge $50 for it to make any money at all.”
Visitors can get a quality hotel room in Las Vegas that’s substantially less expensive than one in San Francisco, Chicago, or New York, Jenkin said, adding that Las Vegas has the best collection of restaurants, entertainment, pools and nightclubs in a two-mile radius anywhere in the world.
“The industry has evolved into more than just gaming,” he said. “Gaming is 30 to 40 percent of revenue these days. The hotel, the food and beverage, entertainment and retail have become much bigger components of the business. (Customers) may game while they’re here, but they’re not coming here to gamble. Back in the day, if someone said they were going to put a conventioneer in one of our rooms, we would have stabbed them in the heart.”
During his career, Jenkin said, “finance people” have had some of the biggest impacts on the industry. By contrast, people who found ways to engage customers and keep them coming back often didn’t get much credit.
“Some of the marketing decisions that create short-term revenue but hurt long-term customer retention makes me crazy,” he said. He jokingly said he didn’t want to share what those decisions were.
Answering a question from Las Vegas Advisor publisher Anthony Curtis about Wynn Resorts ending their parking fees, Jenkin said he didn’t know for certain but believed that Wynn raised their resort fee the same day.
“It feels like they penalized lodgers and made it easier for non-lodgers,” Jenkin said. “I don’t know how many locals are going to Wynn to start with. I can’t imagine it’s a big number. I was confused by the strategy.”
