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Is Las Vegas Distressed
or Blessed?
Photo by Geri Kodey, ’86
Las Vegas has been tested before, and has proven to the world its ability to adapt,
recreate, and reinvent the product visitors seek to experience in this desert paradise.
Is this time any different? Well, just a bit. The economy has reached depths of
historic proportions, stressing even the most stable and promising corporations in
the world. As the saying goes, when the tide goes out, we will see who is wearing
a swimsuit. Well, the tide has certainly gone out, and many naked companies are
scrambling to get dressed. The shift in gaming (35 percent) and nongaming (65
percent) revenue, although a comfortable and multi-dimensional approach to a
well-rounded gaming business, proved to be a crumbling model under this economic distress.
Does this mean hope is dwindling for recovery and Las Vegas as we know it? Absolutely not!
It does mean we must depend on the experience, resiliency, and determination of the current
employees and executives who have been fortunate enough to survive the drastic layoffs and
cutbacks around the world. The financial freefall must first find a resting spot comfortable enough to
begin the recovery period, either through bankruptcy, lender negotiations, deadline extensions, sales,
or simply displaying the ability to find that silver lining while not reducing and sacrificing a guest’s Las
Vegas experience.
Is there a silver lining worth pursuing? The Las Vegas experience 50 years ago was once based
on value and relationships rarely seen in a hospitality venue. One was able to pay a very reasonable
price far below industry average while receiving service and an experience that provided guests
with $1.50 worth of experience for every $1.00 spent. Oh yes, and they knew the guest by name,
not number. The burden had shifted from the operator’s responsibility to work diligently to establish
relationships, to the guest’s responsibility to just show up and be loyal.
Loyalty is transient now, and the Las Vegas scene remains hypercompetitive with enormous
amounts of debt steering the ship. Where do we go from here? Well, we cannot remove the billion
dollar structures or ignore the debt, so the silver lining lies somewhere in between.
The gaming operator’s previous excessive spending resulted in one-of-a-kind products that also
translated into high prices for the consumer and a level of corporate greed that eventually stressed
and deteriorated the overall guest experience. Las Vegas for years has successfully tested the theory
of ‘build it and they will come,” going back to the 1950’s. The cover of Time magazine in 1955 asks
the same question we are asking today, is Las Vegas overextended? Maybe overextended and
overcommitted—time will tell.
Jeff L. Voyles
U N LV Hotel College, Faculty in Residence
Now, where is the silver lining? We talked about the distressed part; let’s talk about the blessed
part. Las Vegas has some of the most qualified, experienced, and talented staff in the world. And for
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PREMIER ≤ SPRING 2009