Like death and taxes, gaming profits once seemed assured. But then came September 11, and nothing's the same as it used to be. As in other areas of tourism, revenue losses are now in the millions; but unlike international destinations, big cities, and airlines, all of which have steeply cut air and hotel prices to kick-start moribund economies, the gaming destinations have, for the most part, resisted the fire-sale mentality.
Playing the Ace
Why no bargains? For one thing, maintain many gaming destinations, the prices were already a bargain to begin with, which is why, when asked, they are only reporting "flexibility as usual." Vegas, at first hit hard, has since reported a 5.1 percent increase in convention attendance for 2001. Jenn Michaels, vice president, public relations, MGM Mirage Resorts, says that its properties have rebounded well from September 11, "particularly the Bellagio, which was the first to bounce back." One trend she has noticed is the good deals for small groups who book Thursday through Sunday, and are "meeting next week. It's now a super-short-term business."
Destinations that are primarily drive-in -- Atlantic City; Tunica, Mississippi; and the Mississippi Gulf Coast -- have also fared well. Atlantic City's Tropicana Hotel, which is the largest hotel in New Jersey, reports 93 percent occupancy. In 2001, it hosted 250 groups which occupied 50,000 room nights. Business is about the same since last year, although the percentage of corporate business has decreased in favor of state, labor, and military.
It Lands in the Red
Gaming destinations are hurting because the events of September 11 caused "whales" (as the ultra-high rollers are called) to beach far from the baccarat tables they typically call home. According to Sebastian Sinclair, president of Christiansen Capital Advisors, LLC, which provides gambling industry analysis and produces the Web site www.grossannual wager.com, it's all in the cards. "The evidence is in the baccarat results, and other table games like black jack, but baccarat is what [analysts] look at." And since 9/11, that play, says Sinclair, "has dropped to the floor."
The loss of high rollers, whose travel is more discretionary, has caused real concern. In Vegas, for example, November casino winnings fell to $741.4 million, down 7.4 percent from the previous year. The trickle-down, however, is unlikely to be felt by meeting groups, since the gulf between high rolling gamers and convention groups is so wide, it represents two different revenue streams. For example, according to the Las Vegas Convention & Visitors Authority, 4 million convention delegates met in 2001 for an economic impact of more than $4.8 billion, which amounted to almost $1,200 per delegate. Compare that to a single whale who may open a credit line of $500,000. Therefore, even though overall profits down, convention business is booming, which is why planners may not be seeing bargains.
It Lands in the Black
In fact, that is the case. According to Andy Maiden, director of public relations for Paris-Las Vegas and Bally's, convention business has indeed bounced back to last year's levels. "We're at the peak of our meetings and conventions season right now, so as far as additional perks are concerned, they are available on a case-by-case basis, but that's not unusual. Down the road, in the fall, there may be other values, but right now, things are very healthy."
Maiden attributes the present climate to a mixture of current business along with meetings that were rescheduled following September 11. "Forecasts are good," he says.
His perspective is confirmed by Gus Tejeda, director of sales for Four Seasons Hotel Las Vegas (Vegas' only non-gaming luxury property): "We're taking a business-as-usual attitude here in Las Vegas. It's still possible to negotiate summers and holiday time, but there's no exciting news [regarding negotiations]. Both corporate direct and corporate third-party have come back strong for us, with pharmaceutical being number one. New leads are booking between 60 to 120 days into the future." He would probably agree with Maiden, when he says, "We always love to have more business, but things are pretty busy."
Tell it to Marjorie Risinger, CMP, partner with Culver City, California-based Rosenberg & Risinger. She says, "I'm finding it pretty much the same climate as last year. Hotel people have told me when I was doing a site inspection, 'Everybody who put it off last year is doing it this year.'" Risinger found the big hotels picky -- not desperate. "My group, Connections 2003, is space-intensive, and the space ratio is not what the hotels expect.
"I did ask one of the properties if I could get discounted tickets for a board meeting last week, and they were comped, but that seems typical. It's a better deal if it's short term. There have been no big concessions; really, nothing's changed."
Playing the Cards You're Dealt
Let's face it: Gaming destinations are in such great demand because they represent excellent value. "Speaking from a meetings industry standpoint," says Webster Franklin, executive director, Tunica Convention & Visitors Bureau, "regarding 9/11, there really has not been a change. Tunica, as a destination, is one of the best values. [It's possible to] get a $57-per-night room here, at a hotel that's not over seven years old. And in most cases, if you're doing F&B at a property, it will include meeting space for free."
Franklin also boasts that Tunica has one of the best entertainment lineups; in a typical weekend, for example, visitors can enjoy B.B. King, Keith Urban, Cheap Trick, and others. "Planners can negotiate blocks of tickets," says Franklin, "although it would generally have to be a smaller group. For 9/11, we had five meetings that cancelled during that time, since international attendees couldn't get in. They rescheduled; one of them -- FedEx -- had its meeting [end of January]."
Good times and value also go for the Gulf Coast, where, according to Mark Wilson, director of sales and marketing for the Beau Rivage Resort and Casino, "Biloxi is such a tremendous value-added experience, especially when you look at the quality of our product. It's a wonderful venue."
And there's new wiggle room: Although the property is not "discounting the convention business much," says Wilson, "we are looking at different opportunities. Whereas we are always looking at the corporate and incentive market, we're now also focusing more on association and government meetings.
"We are allocating more rooms to the group segment. Our ceiling on group, which typically has been 500 rooms, we have removed. We will now commit up to 1,000 rooms. We have a group coming in that is 800 rooms. We'll also look at government per diem business, which, in Mississippi, is $72." As for nightlife: "Depending upon the circumstances," says Wilson, "we can work on offering deeply discounted ticket prices to our entertainment. The shows coming in [in 2002] are Burn the Floor, the Shanghai Circus, and Stomp."
Public space is also up for grabs. "Groups can use the restaurants during the day for additional meeting space for meal activities. There's also the possibility of using the 1,500-seat showroom. We can work with a higher-end meeting that wants to use the showroom for product launches and motivational speakers."