Is Las Vegas a Market Leader or Playing Follow the Leader?

There are easily defined patterns in Las Vegas' storied history. To recap a few of the more modern trends:
  • Themed hotels to attract families (Mirage 1989 ~ Paris 1999) 
  • Free shows at hotels (volcanoes, indoor rain, street performers, lions)
  • High end hotels and condos (these projects started popping up behind properties on the Strip)
  • Frozen drink stands (they are everywhere these days)
  • Party pits in the casino (scantily-clad go-go dancers, complete with poles, right behind pit bosses)
And the list goes on. Once one casino opens a door to these trends, every one of them on the Strip and downtown follow suit. In a way it is easy to get a sense of "the next big thing" in Las Vegas because there is a copycat effect.

Las Vegas was in serious trouble after the economic collapse of 2008. But it bounced back, and now it is on the verge of hosting 40 million people this year. The current trend is to market to millennials, those young folks (mostly from California, in this case) with a lot of money and a penchant for looking for a good time.

This strategy seems to be working… sort of. People see the posh, luxurious hotels, clubs and restaurants and think "wow, Vegas is hopping!" And it is, if you look at raw numbers of visitors. But at the same time, many of the hotel/casino entities in Las Vegas are having a hard time turning those numbers in to stellar profits.

Caesars Entertainment Corp (CEC) is famously and publicly having financial problems, and while some of those problems are due to the fact that they are a HUGE company with about a million initiatives, part of the investment strategy is following entertainment trends in Las Vegas. For evidence, all you have to do is look at the giant High Roller wheel and the corresponding LINQ shopping venues behind Flamingo.

As another example that things may not be so good, SLS is starting to lay off its workforce. How could the hippest, newest casino in Las Vegas be in trouble already?

I wonder how many top Vegas properties are doing serious market research and finding out what sticks. These trends make the short-term money, much like a fad (think Personal Digital Assistants, or PDAs, of the 1980s) instead of the long-term ideas that have lasting effects (think smart phones).

The focus on trends is one of the reasons many Las Vegas hotels have put gaming on the back burner, a secondary "oh by the way" feature, and are spending their time and money on entertainment. Experts will argue that, regardless of the reasons for this (and there are many), that this is a good strategy for Las Vegas proprietors. I wonder… other than visitation numbers and the "if you build it they will come" mantra, where is the proof that this is a good long-term strategy? It's not in the numbers. What happens in a few years when the millennials start getting older and don't want to party at clubs and topless pools anymore? Las Vegas will have to reinvent itself again.

And I'm not saying that's necessarily a bad thing. Change is good. Be nimble to adapt to an ever-changing market and you have a better chance of being successful. I get that. But there are certainly long-term marketing strategies that hotels and casinos can also implement that will lead to financial stability. After all, I'm sure they get tired of chasing down the next big thing.

Viva,
Mike