Re: "I don't want the $50 customer."

On May 11, 2:20 pm, Rob Taylor <robta...@xxxxxxxxx> wrote:

Right now, what seems to be happening (as is mentioned in the article)
is Vegas is filling rooms better than a few months ago, but casino
spend and restaurant/etc. spend is down, which sort of goes against
the model you have, Cameron. (Plus any sharp gambler knows that a lot
of the Strip gambling is for suckers: 6/5 single-deck BJ, 3x4x5x craps
instead of 10x, and so on.)

I think Ruffin is probably on-target for not wanting 100% occupancy at
dirt-cheap rates, though- it increases wear and tear on the physical
plant and crowding in the hotel, it means you have to bump up
staffing, and so on, while not maximizing your potential return.
Ruffin is all about cash flow, and if I had to guess, what he wants is
overflow from conventions at Sands that Venetian can't handle (or who
don't want to pay expensive convention rates) + midlevel Strip
tourists (basically, the same group of customers as the non-Caesars
Harrah's properties + NYNY/Monte Carlo/Luxor). $50 is not where he
wants to be for that- that's more in the Circus Circus/Tropicana/
Riviera realm of budget tourists with coupon books. It's probably a
reasonable goal for a while, until the hotel gets worn out like the
New Frontier did.

Rob "Fancypants" Taylor

If he plans to charge substantially higher room rates on average than
NYNY, MC and Luxor, his hotel is going have plenty of rooms
available. With the glut of five star rooms rushing to availability
by the end of the year, I don't really see how Ruffin thinks he has
any leverage to start charging an above average premium for the rooms.

Keeping the place clean and enhancing the overall yuppified aura of
the place will do more to keep the CC crowd north of his joint than
unjustified rate increases.