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Business
Jul. 17, 2009
Copyright © Las Vegas Review-Journal

'LIVIN' LODGE' IS LIVIN' LARGE

Silverton's new strategy helps it thrive in economic downturn

By ARNOLD M. KNIGHTLY
LAS VEGAS REVIEW-JOURNAL
BOOMTOWN IN 1997

Casino:
30,000 square feet
1,100 slot machines
Restaurants: two
Hotel Rooms: 300
Acres: 56
RV Park: 460 spaces (closed 2005)

SILVERTON IN 2009

Casino:
90,000 square feet
2,200 slot machines
Restaurants: nine
Hotel Rooms: 300
Acres: 110
Parking garage
Bass Pro Shop (opened 2005)


Tourists take a break Tuesday to view the aquarium at the Silverton. The hotel-casino, at Interstate 15 and Blue Diamond Road, celebrated its 12th anniversary Sunday by drawing a record number of visitors.
Photo by Jason Bean/Las Vegas Review-Journal

The Silverton's top official is glad the property didn't proceed with building a new 360-room hotel tower that was scheduled to open this fall.

When the local housing market crashed and funding for construction projects dried up, the Silverton switched gears and decided it would need to change its plans some for competing with other locals casinos.

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    • The Silverton launched an aggressive advertising campaign that has helped the hotel-casino buck the trend that has left other casino properties struggling in the economic downturn.

    The "That's Livin' Lodge" ad campaign, which includes television, radio and print ads, has reintroduced the Silverton to local residents and is helping to stave off competition from the resort's newest competitor, the nearby M Resort off Interstate 15.

    "We've never had to be that aggressive," President Craig Cavileer said. "We haven't been on TV since 1998. We decided we were going to own the market on local television and print in the first half of this year, which I think we did."

    The property experienced a quick return on its most-expensive ad campaign ever, growing its player database by 70,000 new players this year. During one four-week promotion, the property gave away 36,000 Snuggie blankets to player card members.

    And on the Silverton's 12th anniversary Sunday, the casino attracted the most players in its history, Cavileer said.

    The ad campaign was launched in December, less than three months before the March 1 opening of M Resort.

    Property executives sat down to determine "how do we define what the Silverton is and we came up with the 'That's Livin' Lodge' slogan that's been the backdrop for all of our messaging," said Cavileer, sitting at the property's new $2.5 million Flare Bar.

    The ad campaign's launch coincided with the opening of a $160 million expansion that included a new parking garage, restaurants and additional casino space.

    The casino has increased casino revenues by double-digits even while revenue is decreasing steeply in the overall market, Cavileer said.

    Even with the marketing campaign's success, the 300-room hotel is still doing just slightly better than the rest of the market, with an occupancy rate of 90 percent. The property's database helps offset the dip in free and independent travelers visiting the property.

    The average daily room rate, however, is down 20 percent from last year, largely because of the heavy discounting being offered by Strip resorts, Cavileer said.

    "For so many years we owned the geography of the southwest," Cavileer said. "The strategy became, 'How do we protect our database with the M opening?' The economy is worsening. The customers are still going to be out there. They may be playing less and spending less money, but they're still out there making choices."

    The troubled economy and the decline in casino customers and spending by customers keeps Cavileer busy working on new marketing ideas. He estimates he spends as much as 90 percent of time on that effort.

    Today's bad economy isn't the first time the Silverton has had to overcome problems, though.

    When owner Ed Roski Jr. took over the Boomtown in July 1997 the property was struggling financially.

    The $70 million Boomtown had been a partnership between Roski's Majestic Realty Co. and Boomtown Inc., a Northern Nevada casino company that owned a similarly named property near Reno.

    The remote location at the corner of Blue Diamond Road and Interstate 15 was one of the property's biggest issues. Cavileer said Boomtown also suffered by poor management before Roski took over.

    One of the Silverton's early challenges after Roski bought the property was to bring staffing levels down from 1,400 employees to nearly 900, a level that is maintained to this day even though the property has quadrupled in size.

    "They didn't know how to operate a business, so they kept staffing it and staffing it thinking that would solve problems," Cavileer, who took over as property president in January 1998, said. "(That) is one of the reasons they were going out of business. They had a staffing model that was challenging to say the least in terms of labor cost."

    Although Roski has taken the property from what Cavileer described as a "roadside truck stop casino" to a resort with all the amenities, the owners still see more to do, Cavileer said.

    "The path was not too far off from what we expected," Cavileer said. "If there is a surprise, the surprise would be we haven't added the rooms that would make this a complete resort. We don't have enough rooms to really drive the out-of-town business on weekends that we'd like to."

    Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.

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    Thankfully employed wrote on July 19, 2009 12:24 AM: ex gambler - you're right, it is wrong for owners to buy multi-million dollar homes while their casinos are facing bankruptcy. The article you attached talks about the Fertitta family who own Station Casinos. Silverton is owned by Ed Roski as stated in the article above. The last time I checked, Mr. Roski still owns the same home he has lived in for about 20 years.


    ex gambler wrote on July 18, 2009 02:48 PM: Thankfully employed- There is nothing wrong with cutting back on benefits until this crisis has passed. What is wrong is when the owners are still reaping in millions and buying multi- million dollar homes whilst their employees are suffering the consequences of managements bad decisions.

    http://southcoasthomes.freedomblogging.com/2009/06/26/vegas-tycoon-buys-emerald-bay-home-for-28-million/


    Thankfully employed wrote on July 18, 2009 12:52 PM: Dan – with the current unemployment rate at 12% I’m sure people would rather work 10 hours than not work at all. Also, if you were an employee of the Silverton you would know that this was only in effect for a short time and only to salaried team members. Salaried people know that you are expected to work more than 8 hours a day if needed. Sure, the Silverton cut some benefits back, but I guess I’ll take that over being laid off. These are tough times we live in, and I’m just thankful I am still employed by a casino that is avoiding bankruptcy, unlike some of our competition.


    Dan wrote on July 17, 2009 04:59 PM: Please...let's not forget how well they treat the employees...NOT ! Work 10 hous a day and get paid for 8..The benefits are horrible..but who cares about any of that as long as they are making millions ! Don't print any of the truth though...because nobody wants to hear that !


    Ken wrote on July 17, 2009 02:03 PM: Ralph -- I'm not looking at their books so you could be right, or not.

    But you do realize that casinos are making money. The reason MGM/Harrah's/Stations are in such bad shape still is because of their debt service. It is still a profitable industry.

    My impression, from the article, is that the writer wanted to get across the point that Silverton was forward thinking when they cancelled their new tower. Unlike some of the other companites that kept building as storm clouds were headed our way, they reacted in a positive way. So, between that wise decision and their marketing, they are making money, albeit not as much as in a healthy economy.

    I'm not going to nitpick this one. As I said, you may be right. But it is not far-fetched to think they could actually be turning a profit.


    ChicaVegas wrote on July 17, 2009 01:19 PM: As a long-time resident, I think the Silverton offers some great deals. You don't have to deal with the crowds found at The Strip. And if you follow directions, you can wind up with a lot of cool free stuff.


    American Gaming Guru wrote on July 17, 2009 12:23 PM: As someone who knows the business but has never been to the Silverton, I appreciated the article. BTW...no mention of the mistake called Paula Abdul :)


    ralph wrote on July 17, 2009 11:55 AM: Ken, I have no problem with puff pieces per se. It's the "this place is thriving" baloney. It's not. You know it, I know it, and the American people know it. So therefore report it. To say this place is thriving is a lie.


    lodge fan wrote on July 17, 2009 11:09 AM: I don't see why some people are complaining. Every offer in the world has the caveat "some restrictions apply." And as for someone who was mad they had to wait for free food, I would gladly wait an hour for a free meal at Twin Creeks (and I'd do it wearing the free Snuggie I got at Silverton for my slot play). Silverton has some great offers, you just need to read the fine print to know how to use them.


    kenodave wrote on July 17, 2009 11:03 AM: Boomtown didn't thrive in Las Vegas because they didn't understand the competitive market in Las Vegas. Boomtown is a mid sized casino on the California/Nevada border with no direct competition for 10 miles. They literally had no competition. They came in with the same business model as they utilized in Verdi (outside Reno) and it did not go over.


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