It used to be that, for the most part, Las Vegas ran on the profits made by the casinos and the ancillary services – hotels, restaurants, entertainment venues, etc. Then, some companies decided they needed to start taking a bigger slice. They began chipping away at certain fundamentals, such as free parking, and started tacking on new charges, such as the so-called “resort fee.” To no one’s surprise, except to those who are oblivious to the operations they’re actually tasked to run, the extra charges and removal of normal perks are beginning to keep gamblers away from Vegas.
According to Dr. Stephen Miller, who leads the Center for Business and Economic Research at the University of Nevada Las Vegas (UNLV), all of the changes casinos implemented in hopes of boosting revenue will hurt them in the long run. He sees these alterations as a hindrance to Vegas attracting gamblers from places like Southern California.
Miller pointed out the obvious when he spoke at the Las Vegas Global Economic Alliance this past Tuesday. Overall, according to Las Vegas official data, visitation is up 0.5% this year through October; however, it isn’t because of California. The same data shows that there has been a drop of 1.1% in vehicle traffic at the border between the Golden and Silver States, which constitutes a drop of about 500 vehicles each day.
The issue of resort fees came to a head this year, as attorneys general from different states began to seek legal action against companies and the hidden fees. It has gotten so far out of control that the federal government has also been involved, reviewing a bill that would prevent hospitality from tacking on any fees to the end of pricing schemes. Instead, they would have to be listed with the publicized price of the accommodation.
Certain venues, most notably, MGM and Caesars, have started to charge for parking. Many resorts in Vegas expect guests to pay up to $50 each day, which they assert is to cover things like maintenance, Internet access, business fax services, etc. Those services have always either been included in a hotel’s price, or billed separately on a per-guest basis.
There are now also service fees included in some resort bars. Again, these are being billed as “maintenance necessities,” even though maintenance is the venue’s responsibility, not the patron’s.
Miller adds, “That has got to be the answer. The question is whether that is parking fees and resort fees. That may play into it but whether it’s big enough to keep the visitor volume soft, I don’t know.”
There has been talk in the past that Vegas has lost its luster. That appears to be true to a certain extent, at least from the viewpoint of Californians. If the Golden State pushes forward with casino and sports gambling expansion, both of which are on the table, then Vegas could take an even bigger hit. All because certain casino companies felt they needed to reach deeper into the pockets of those that keep them running.
