Friday, June 26, 2015

A hint of desperation

It's been very hot in Las Vegas lately -- today's high, 112 degrees -- and maybe that's resulted in fewer people going out to gamble. Whatever the reason, several casinos have taken unusual steps recently to lure players in.

It's been a long time since the Palms has offered point multipliers. Instead, it allows players to earn gift cards with weekday play at a rate of 0.2 percent on video poker. That's almost equal to the point value of 0.25 percent. But the other day I got an e-mail from the Palms offering double points yesterday, a day on which play also counted toward gift cards, bringing the total value offered to 0.7 percent. The best game on which the multiplier could be earned was 16/10 "not-so-ugly" deuces, with a maximum payback of 99.73, making for a 100.4+ percent play. (On top of that, I had an American Casino Guide coupon for $50 in free play after earning 15,000 points in one day, adding 0.33 percent.)  I was worried so many people would come to the Palms for the point multiplier that all the "good" machines would be taken, but that proved not to be a problem.

When I checked my e-mail last night, there was an offer for $15 in free play today or tomorrow from Station Casinos. Stations has rarely if ever made such an offer by e-mail. This offer and the Palms point multiplier seem to me to be attempts to boost coin-in totals before the end of the month, indicating that play to this point has not been up to expectations.

Another indication of desperation: A few weeks ago, the SLS, the north Strip casino that had been the Sahara, offered 10 times points on video poker. My spouse and I both went in and lost a lot of money. The other day, a host called and offered her a 5 percent rebate in free play of her loss that day. Brilliant woman that she is, she asked the host to check on my play that day to see I could get a rebate as well. Sure enough, the host called back and said I could get $150 in addition to the $350 offered my spouse.

While I was at the SLS the day of our big losses, I chatted with a host I recognized from the now-closed Riviera. She admitted the property was struggling, and was trying to attract locals. Ever helpful, I offered some free advice.

First, I will say that it's hard to attract locals to the Strip on a regular basis because of traffic and parking concerns. For those lacking comps, the restaurants and other amenities on the Strip are much more expensive than in the locals casinos or downtown. The machines, both reel slots and video poker, are generally tighter, and table game minimums are higher. To a degree this is necessary because of the higher costs of operating on the Strip.

In some respects, SLS, away from the center of the Strip, is relatively well positioned to draw locals. It's near I-15's Sahara Avenue exit and has lots of convenient garage parking, which can be entered from either the Las Vegas Boulevard or Paradise Avenue sides of the building. But the big challenge facing the SLS and other Strip and downtown properties trying to draw locals is this: What can I offer to make it worthwhile for people to drive past the Red Rock Resort, Green Valley Ranch or other major locals casinos to come to my property?

I pointed out to the host from the Riviera that the SLS's video poker pay tables are not competitive with those at the locals casinos and that when the SLS was the Sahara, it had a section called Locals Lane that featured better video poker as well as reel slots. (There was no requirement that you had to be a local to play in Locals Lane; it was open to everyone.) Bringing back Locals Lane or something like it would indicate that the SLS is willing to do something special to win their business.

Something the SLS has been doing and should build on is holding tournaments. The locals casinos don't offer many tournaments of any significant value. When what is now the Westgate was the Las Vegas Hilton, it offered monthly tournaments geared most to locals as well as larger tournaments that were open to qualifying locals. These tournaments helped build a loyal group of local customers, many of whom formed friendships not only with one another but also with casino employees. (The casino business, though largely taken over by numbers crunchers, also still is -- or should be -- a relationship business.)

Another thing the SLS might try to do is market itself as the place for locals' friends and family members to stay on the Strip. Offering locals free room nights that can be used by visitors might bring in new out-of-town customers who could be marketed to separately. The SLS is an attractive property, catering to the sensibilities of younger people. To this crowd, the resort's location away from the center of the Strip may be a disadvantage, but one that could be at least partially overcome by cooperative marketing with the Las Vegas Monorail, which stops at the property. Possibility: a free Monorail pass with every stay of more than a specified number of nights.

One thing the SLS has been doing that I don't think is likely to be effective is blitzing locals with gift offers. Although gifts have been very effective at locals casinos in getting people through the doors, I doubt they will be as good at a casino that most customers have to travel a considerable distance and/or go out of their way to reach. And then there's still the problem of getting people to play once you've gotten them in the door. If I were in management at SLS, I would consider redirecting the gift budget to dining offers. This would be in line with the overall marketing of the resort as a "foodie" destination. One thing I might to for locals is offer a discount for walking in that could be upgraded to a free meal with a certain amount of play.

Finally, Boyd Gaming has expanded its Wednesday "Young at Heart" program from the Coast locals casinos to its downtown properties, the Fremont, California and Main Street Station. This month there have been separate "Young at Heart" point multipliers -- up to 30 times points on video poker with a maximum of 100,000 multiplied points -- during the day and from 7 p.m. to midnight, as well as drawing, buffet offers and dining credits.

I think its smart for Boyd to market its downtown casinos to locals. Boyd's Coast chain has about half as many properties at Stations, its major competitor in the locals market. Two Coast properties, the Orleans and Gold Coast, are very close to each other. There is no Coast property in the northern part of the Las Vegas Valley, where Stations has Santa Fe Station, Texas Station and Fiesta Rancho.

But it's not going to be easy for Boyd to get middle-aged, middle-class residents of the outlying areas to come downtown. Panhandlers, drunken tourists, traffic hassles, parking restrictions and outdated properties are among the turn-offs. Attractive gaming offers are probably necessary but not sufficient to draw more locals. What's needed is an education effort that frankly addresses the reasons locals have for not wanting to go downtown and letting them know what Boyd has done to minimize the problems and why its worth making the trip despite the problems that can't be eliminated.

For example: The Fremont has no self-parking, only valet. Parking at other casinos along Fremont Street is no longer a good option for visitors to the Fremont who don't also want to play or eat at another casino. But, as my spouse found out only by asking, anyone with a Boyd sapphire or emerald players card can park all day for free at the California's garage, without the hassle of dealing with validation. Boyd needs to let locals know they can park downtown, in a covered garage, virtually hassle-free.

Although driving into and out of downtown is pretty easy, it's easy for those not familiar with the tangle of highways leading there to be intimidated. Any mailing aimed to get people downtown should provide maps and directions to the properties being marketed.

Of the three downtown Boyd casinos, one is right on the Fremont Street Experience and two are a short walk from it. I think this situation calls for some sophisticated marketing, especially to locals. I would try to get locals to think of one of the casinos -- Main Street Station is my choice -- as their "headquarters," with easy access to the others for those who want it as a bonus.

Main Street is the most attractive of the three properties and the farthest from the commotion of the FSE. It has a nice buffet and a brew pub, amenities that many locals should find attractive. It is connected by enclosed bridge to the Cal, where patrons can park all day in a covered garage (MSS also has its own huge surface parking lot, but that's not a competitive option for locals). The Cal itself has been established as a magnet for visitors from Hawaii, I believe its main attraction to locals would be as an annex to MSS, offering additional dining and shopping options.

The Fremont offers the most challenges in marketing to locals. As noted, it lacks self-parking. It's only a short walk from the Cal, but along unattractive streets lined by the backs of parking garages. Its main attractions are restaurants including a very popular Tony Roma's and its video poker, particularly NSU deuces at high denominations. Some locals will want to leave the MSS-Cal cocoon for the Fremont; others won't. The marketing for these properties should stress that you don't have to, but you can, and it's not difficult or dangerous to do so (maybe security escorts should be offered to those reluctant to take the walk).

Downtown attractions such as the Smith Center and Mob Museum might offer cross-marketing opportunities for Boyd, as well as additional reasons for people to come downtown.

Both the SLS and the Boyd downtown properties illustrate the need for marketers to assess the advantages and disadvantages of their properties in regard to each type of customer they hope to attract. They must also try to ascertain the reasons customers have for not coming to their properties, and do what they can to refute or at least mitigate these objections.

A final suggestion: In a still-struggling economy, most businesses -- especially those relying on discretionary spending -- compete by offering more value, not less. Since the economic crisis of 2008, many gaming companies have downgraded pay tables, tightening rules, cut comps and otherwise reduced customer value. Especially for casinos struggling to attract customers, maybe its time for a different approach.