This panel at Global Gaming Expo (G2E) certainly lived up to a portion of its title of “Beyond Las Vegas,” as three of the four panelist were from outside the United States. However, all were now either professors or assistant professors at the University of Nevada Las Vegas’ Harrah’s College of Hospitality.
Moderator Tiange Xu is from China, Marta Soligo from Italy, and BonhakKoo from Korea. Only well-respected gaming researcher Anthony Lucas is a full-time Nevada and Las Vegas resident.
Despite their varied backgrounds, all agreed that Sin City is different. Lucas started the session declaring, “The Vegas model is unique. It doesn’t really apply to any other markets in the world and I don’t think it should. It’s born out of a destination process.
“So we have giant hotels, an unbelievable number of restaurants, other non-gaming amenities that a lot of other places don’t have. We need them to differentiate ourselves, because everybody has the same games,” Lucas said. “Everybody has the same slot machines, so non-gaming to differentiates us, largely through our hotels, to create trips, reasons to make trips, something new, something to see that you haven’t seen before.”
The result of all those non-gaming attractions is that Las Vegas generates far more revenue from sources other than slots and table games. In most other gaming markets across the country, the casino floor is still the key force in driving revenues.
Xu pointed out that even in Las Vegas, the Strip is unique compared to downtown Las Vegas, only 10 minutes away.
The panel was in agreement that the locals casinos (which pretty much describes all casinos not on the Strip) never treated their non-gaming attractions such as restaurants as standalone profit centers. In fact, they’re often content to lose money or just break even, as long as those venues support the gaming products.
Lucas credited Steve Wynn’s opening of the Mirage in late 1989 with changing everything. Wynn insisted that no attraction would ever be anything less than profitable. That was his pledge from day one and has become the Strip’s mantra ever since.
In the last year or two, pricing on the Strip has led many to charge that operators there gouge customers.
However, Koo said, “Las Vegas is still one of the most affordable places to visit in this country and around the world. Believe it or not, you can’t find a room in Korea for under $500 a day.” Audience members chimed in that while they were “outraged” by $20 a day for parking in Las Vegas, other large cities charge double, triple, or more to park there.
Lucas said the gouging charges are probably because of change. Las Vegas visitors got used to free parking and had never heard of resort fees. So when those were eventually added, there was a strong negative reaction.
Some of the changes have led to vastly improved offerings.
Soligo told a humorous story about menu items you’d never find in Italy, such as chicken parmesan and chicken on pasta. However, she noted that today, “We have restaurants such as Cipriani at the Wynn or Italy at Park MGM. They really are more part of the Italian tradition, to the point that they refuse to serve spaghetti and meatballs or chicken parmesan, because this isn’t what you order in Italy.”
She said that many visitors to Las Vegas today are also more sophisticated and have traveled to Italy and other international destinations, so they enjoy what she called “the evolution of Italian food in Las Vegas.”
Lucas had an interesting summary of all the Strip’s evolutions. “Remember, Las Vegas is in the middle of the desert. We needed to have big hotels, because we needed a place for guests to stay. We didn’t have a resident population, so that’s what our model was sort of born out of, and because we have these giant hotels, that’s why non-gaming has gotten so much traction in terms of revenue.
“It’s not really any other stuff. Keep that in mind when you’re trying to export the Strip model to other markets. It doesn’t really work, nor does it make sense in terms of invested capital, return on invested capital. So those are things to think about,” Lucas said.
