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Las Vegas Sands cuts comps for average gambler
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LAS VEGAS REVIEW-JOURNAL
Las Vegas Sands Corp. has eliminated free hotel rooms and other complimentary offerings for middle-tier customers at its two Strip resorts, a move one gambling expert called "a terrible thing."
High-end gamblers still receive benefits, such as show tickets and meals.
Company officials said the move was taken to drive the bookings of hotel rooms through group sales and Las Vegas Sands' alliance with InterContinental Hotels, which began marketing The Venetian and Palazzo through its 52 million-member rewards program last fall.
During Las Vegas Sands' fourth-quarter earnings conference call, company Chairman Sheldon Adelson said the elimination of comps has helped sell hotel rooms at The Venetian and Palazzo, resulting in a substantial increase in cash income.
"We know that the subject of comps has been played out all across Las Vegas, but we've taken a different position," Adelson said. "We've essentially cut out all our accounts except the most highly rated players. No more packaging deals to try to be competitive with others. There's no more comp rooms given out. There's no more food and beverage. There's no shopping credits. There's no restaurant credits. There's no showroom credits."
Gambling expert Anthony Curtis, who operates the Las Vegas Advisor website, said he heard rumblings over the past few weeks about the Sands' new comp policy. He said what was unclear is where the company was drawing the cut-off point.
"What happens to your slot club?" Curtis said. "The comp system is a very vast network. I've never heard of not comping the middle market. This could be a terrible thing."
Neither Curtis nor Union Gaming Group principal Bill Lerner had heard of other casino operators on the Strip instituting drastic changes in their complimentary systems.
"If they have, it's been much more quietly done," Lerner said.
Las Vegas Sands grew net revenues at The Venetian and Palazzo by 16.5 percent in the fourth quarter to $310.6 million, which was just 15 percent of the company's overall $2.02 billion in revenues during the period that ended Dec. 31.
The company said its adjusted cash flow in Las Vegas during the quarter was $80.6 million, an increase of 41.7 percent from a year ago. Las Vegas Sands officials said operating efficiencies and the reduction of comps contributed to an adjusted property cash flow margin of 25.9 percent.
Lerner said casino operators have tightened their promotional offerings over the past few years as a cost-cutting measure to deal with down revenues brought about by the economy.
The actions by Las Vegas Sands show the influence hotel operations have in the company's management structure. The shift toward group bookings helped Las Vegas Sands book 90,000 hotel room nights in January at The Venetian and Palazzo, which have a combined 7,000 rooms.
"There are more hotel guys in the organization than in the past," Lerner said. "The place is being run differently than it was in the past."
The 10-year deal between Las Vegas Sands and InterContinental also influenced the changes. The hotel company doesn't have a property in Las Vegas and the corporation's president said the Strip is the No. 1 requested destination by InterContinental customers.
"Our expectations for our InterContinental alliance are very high," Las Vegas Sands President Michael Leven said. "We're working hard on it, particularly on the technology side. We think that will fill a lot of the voids in the competitive environment and with probably the transient part of the marketplace."
Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.
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I count myself as a mid to high slot player. I budget for a loss of $2000 per day, but gamble up to $10,000 per day of my money. If i lose more than $5000 in one day , i call it quits for that day and usually take the next day off as well , and try again the following day to see if i can get a good one.
I have not gambled at the Beligio for almost two years now and i still get free rooms and cah every month in the mail. my last offer for march is 3 nights in a suite and $350 cash for walking in. Aria three nights in a suite and $500 cash, the riveria gave me 5 nights in a suite and $750 cash for march.
Comp rooms need to be given to people ahead of time , who have shown past results, as long as a person gambles double the room cost per day i think the room should be comped.
The sands is not the only casino and vegas has lots of places to stay and play, and other gambling towns are more than happy to offer free and almost free rooms to get you there. vote with your wallet, stay at places that treat you good, gamble there and spread the word.
Wow, looks of good info in these posts. I can see where certain playes would really be upset. I think Casinos should be bending over backwards to get guests and players to stay at their hotels. But, they need to make money. Good Info!
I just got the dreaded phone call today from the Venetian cancelling my comped trip in less than 2 weeks. I hope they go
broke! Luckily I was able to call a host at the wynn who took care of me even though he was home with pneumonia! Thats
the service that will keep us coming back to a property. Going back on a promise is the worst kind of business. I consider myself an upper mid level player and they wont see a dime from me, not gaming, not restaraunts, nothing.
I was also a (former) loyal guest of Venetian /Palazzo and I do hope this new policy fails miserably.
While they are within their rights to tighten comps as they see fit, what they are doing RIGHT NOW, calling guests that booked rooms on offers MONTHS ago and telling them that their comped stay is no longer comped, is TERRIBLE CUSTOMER SERVICE!!!
SHAME ON THEM!!!
I am doing my best to spread the news of this complete lack of consideration for their customers.
At the strip property I worked at, we did something similar for a year. We deducted comp offers from your available comp dollars. Needless to say, many guests were outraged. Shocking, gets comps and deducting them from your comp dollars.
What guests didn't understand, is that your offers to "invite" you to return, was we were already giving you all your comps up front based on your average play expected. Then what would happen is, you would also earn comp$ during your play and max them out, then go to the host and request items, at the end of the day, a large percentage were getting more comp dollars than their play warranted. Special Events were losing money.
What I realized while managing this, is that regardless of the offer and how rich it was, you were coming when you were coming. More offers or more value weren't increasing your frequency or spending, rather spreading the same amount just over more trips. So you were getting more, but the casino wasn't.
why do casino players play? They play to win, they play for the thrill, they play for fun, it's an additive habit. Just like smoking. Increase the price, warn them to death about the danger, increase taxes on it....they keep buy the cigs at the same rate.
The competition on the Strip is not just property to property. Rather, department to department within a casino. Each department working to get the max dollar from a guest. The story about the hotel is very true. Departments trying to charge others to "inflate" their line. It use to be other departments are there as services for the casino. Now, it's every man for himself. Whatever gets you here, gaming, dining, room, entertainment.
To the supposed "dealer" at Venetian, if you are a dealer you sound like a disgruntled one. Using terms like "its a ghosttown"? Really? Revenues this quarter INCREASED 16.5%. So what was it before that? A really, really, ghosttown? Please. I was there last month and the place was extremely busy. The comp situation may help them. Giving out 4 free nights worth $1000 (these are not $29 Hooter's rooms), plus freeplay and meals to people who don't play enough to warrant the actual dollar value of the comp, does not make sense. It takes a heck of a lot more play to be comped at the higher level properties(Venetian,Palazzo,Wynn,Encore) than it does at Hooters or ElCortez.Last month on the way out after my trip was finished, my host comped the 4 nights plus what I had in food charged to the room. So if you play at a level that warrants the comps, you will still be comped. I think Adelson's comment about comping only the "highly rated" players translates to "those players that play enough to cover what we're comping". In the past, this wasn't the case. They gave out comps like candy, (places like Wynn NEVER comped like Venetian did) and it proved to be a mistake.
Don't underestimate Sheldon and his train of thought - most of the tourists coming to Las Vegas over the past couple of years have essentially been "purchased" - with free rooms, free slot play, free meals, etc. and have very little disposable income and hence very little of their own money to add to the bottom line. I think many of the upper tier operators will (or already have) follow suit.
I am a dealer at the venetian/palazzo. The place is already a ghosttown, Everyone just got greedy.Anyone dealer hired in the last 2 years was a non-english speaking asian who had to pay for their job until the management was busted for their scam a couple months ago.All the dealers tried to leave for the cosmopolitian but an executive who left for cosmo signed a noncompete clause and was not allowed to hire from venetian/palazzo so no dealer got hired. Adelson is just going to milk all the money from existing contracts with covention business then dump the place to the highest bidder. So if you want to play where you get no comps at all,very very quiet ghosttown place where the dealers outnumber the players then venetian/palazzo is your place!!!!
I spent $40-50K per year at the Hard Rock until they started playing games with their comp system and I dumped them. I spent 40-50 days per year at the HRH and booked all my business meetings there (I work in the sports biz). I had 15 to 20 rooms at a time and suddenly, 2 or so years ago, their comps program went to hell.
I switched to the Venetian and now they have decided to crush the frequent gamer. Absolutely stupid. Look at where the Hard Rock is today. I think the Venetian/Palazzo will go this way very soon.
The marketing people in Vegas simply do not understand THEIR customers. Too many accountants, not enough marketing people of quality.
Mike
I am a Canadian gold member of the Venetian/Palazzo slot club and have maintained that status for the last couple of years. I wondered why my offers suddenly dried up at the beginning of this year and now I know! Thank goodness I still have great offers from Wynn,Treasure Island,M Resort,Gold Coast to use instead and that is precisely what I shall do when I come in next week. I shall avoid Venetian and Palazzo until I see the same level of offer re-appear as my play warranted as before. My play has not changed so why would they downgrade their bread and butter customers?