Saturday, January 16, 2016

Pay to park? In Vegas?

In what is likely to become a public relations disaster for the company and possibly for the Las Vegas Strip as a whole, MGM Resorts International announced yesterday that it will start charging for parking this spring at its major resorts.

Resorts near MGM properties, including the Tropicana, Paris and Bally's and Caesars Palace, will probably have to start charging as a defensive move. If that happens, it will likely create a tipping point, and free parking on the Strip will be gone.

In a way it is suprising that this idea hasn't been attempted before as casino executives have tried, with a great deal of success, to wring profits out of operations that traditionally supported their casinos, such as restaurants, hotels and nightclubs.

And it's not unreasonable that people who come to, say, the Bellagio just to eye the fountain show and the conservatory should pay something, especially if their vehicles are occupying spaces that could be used by gamblers or diners or nightclub patrons. Further, it appears that MGM will allow some customers to park for free.

Still, this does not seem to be a good idea. Americans have an entitlement mentality about free parking, especially at places where they're expected to spend their money, such as shopping malls -- and casinos. But in Vegas, it's more than that. Many people drive to the city -- half of all visitors come from California -- and often are here for only a few days. They have their cars here anyway, and free parking helps them make the most of their time and money.

MGM also announced that it's going to build a new parking garage at the Excalibur, to serve the new sports arena, the adjacent park and commercial area, and the theater at the Monte Carlo. These are the kinds of attractions at which customers in other cities are used to paying for parking. It might have made sense and been widely accepted if MGM had limited parking fees to just this facility.

But MGM says it will charge for parking at all its Strip properties, except for self-parking at Circus Circus, where it will charge for valet parking. (Assuming customers will not want to tip as much, or at all, when they're paying a parking fee, this looks like an attempt by the company to steal from its valet parking employees.) It justifies these fees by promising improvements in parking facilities, incluing technology that will allow customers to check on availablity of spaces before they arrive and that will guide them to open spots.

Given the choice of this technology, and even enhanced lighting and signage (also promised), or free parking, I think I'd take ... let me think ... the free parking! In an online poll in the Review-Journal today 70 percent of respondents said they'd no longer go to the Strip if they had to pay for parking. (This is not a scientific poll.) But people don't like "resort fees" either, and the casino industry continues to get away with those.

If this parking policy sticks, I think the beneficiaries will be the big outlying casinos, from Sam's Town to the Golden Nugget to Red Rock Resort, I just got back from a trip on Southwest Airlines, and its magazine had an add for Station Casinos with a headline like "Strip blackjack pays 6 to 5. Our blackjack pays 3 to 2." Free parking will be another advantage they can advertise.

As someone who is part of the Vegas economy, it bothers me that one of the leading companies in the leading industry doesn't seem more concerned about ticking off customers, who enjoy more options for their gaming and entertainment dollars in other regions than ever before. Gaming is having trouble attracting younger patrons, and this policy is likely to keep some new customers out of the casinos because free parking apparently will have to be earned over tine through the players club.

My prediction is that MGM's newly announced policy won't stick, at least not without major modifications.