Gambling Patrons Shy From Vegas As Traveling Costs Rise
Fewer tourists are travelling to Las Vegas, as soaring fuel costs have caused airlines to reduce the number of flights while simultaneously raising fares, even as the exorbitant price of gasoline is causing a drop in the weekend business driving from California.
US Airways announced it was dropping its daily Las Vegas flights from 141 to 74 by year's end, leaving the number of available seats at 8000 fewer than last fall. US had previously merged with America West, a major source of Vegas-bound flights.
In response to the transportation problems facing potential visitors, casinos and hotels have been forced to make adjustments. The average nightly room price declined 4% over the last year, a trend not likely to please the corporate-minded owners of the Vegas megaresorts.
Gambling revenue had declined 3.7% in the same time period, and arriving air passengers was down 1.8%, while visitors from California dropped by 4.8%.
Strip hotels, which had abandoned the old Vegas policy of generous comps for food, drink, and rooms, have found themselves scrambling to offer packages of free nights and comped show tickets to entice patrons.
The problem is that business in Las Vegas was simply too good for too long. Old-time operators, happy to give away pretty much everything their resorts offered in order to draw customers to the casinos, had been replaced by corporate beancounters, who strove to squeeze every drop of revenue from every possible source.
This method worked for a while, as the inertia of the gambling mecca continued to carry profits forward while the economy expanded and filled wallets. However, once tighter times forced a return to budgeting for the vast majority of the country, the sour realization that Vegas had been transformed into a soulless, impersonal money pit intent only on increasing profits with disregard to customer service or satisfaction hit customers in the face.
Now, in a panic as customer numbers decline and revenue drops, the casinos attempt half-hearted measures to lure patrons back. In the meantime, other competition has sprung up, and taken advantage of the poor moves by Vegas management. Why travel to Vegas when a local casino offers so much of the same, particularly on the casino floors, and is so appreciative of the business?
The lesson to be learned: corporate America, in its blind quest for the highest possible bottom line, will inevitably neglect those qualities that caused the ascent of the business in the first place. Bottom-line beancounting may bring in money today, but cannot sustain itself; the best such a corporation can hope is to absorb better-run companies and live a while longer on their goodwill. Eventually, casinos that understand their business is lucrative enough without pinching pennies to make minor gains will prosper, surviving far longer than bloated, overexposed concepts that treat their clientele as unthinking numbers.
The best chance for Vegas? Return to loose and easy comps, giving the illusion that all gamblers will win one way or another. Forget the computerized corporate methods, which reward 30 hours of play at a $25 blackjack table with half off a $12 buffet. Yeah, money was made on the food, drinks, and room of this customer; problem is, he won't be back.
