Prices are indeed up on the Las Vegas Strip, but by all accounts, we’re still in good shape. We’re slightly down to LY, about 2%, but there’s plenty of time to finish ahead of last year, and last year was a banner year—so the slight anomaly may simply reflect normal fluctuations.
What we’re seeing in pricing is said to be a deliberate strategy shift. Many Strip operators are now aiming to move fully into the luxury space- some say this is to compete with Dubai—in any case, their pricing strategies now align with that market. This isn’t inherently a bad thing. Luxury travelers spend more per visit, and high-end positioning can be incredibly profitable. And I trust our visionaries who built these resort destinations that deliver a customer experience unlike any other. They’re smart, they know their market, and they deserve credit for wanting to ensure the Las Vegas Strip remains the pinnacle for luxury gaming and hospitality.
Good strategy aside, many repeat tourists are venting on social media that they are not happy about the price shift: $9 for a coffee, $33 for a bagel, $26 for bottled water, soaring resort fees, $45–$50 to park a car. Guests are noticing the profit margin more than the latte, and their feedback isn’t shy about it. Since it appears there was not an inflationary impetus to charge $9 for a cup of coffee—it was a strategic decision—this means there’s a whole lot of opportunity for the mid-tier in Las Vegas to scoop up customers who feel they got the shaft amidst the shift.
I recently read that the median income of the Las Vegas strip visitor is about 93k per year. Some in this group may be able to pay certain luxury fees and rates, but I’d be willing to bet that these visitors may be willing to drop a grand at the tables but will walk away from being nickel-and-dimed to the tune of paying $50 to park and buy a bottle of $26 water. They don’t mind spending money on the aspect of the experience they came for, but they likely aren’t willing to blow their trip budget on the more necessity-based aspects like parking and food.
Las Vegas didn’t earn its identity on luxury alone—it was built on making people feel welcome. You stepped into a property and felt like someone special. You didn’t need a million-dollar bankroll to feel like royalty. Even without a high roller label, you were comped, remembered, welcomed. This feeling, which uniquely Vegas gives, is like no other and can still be captured by the mid-tier properties.
Let’s take Station Casinos as an example. With the exception of both of their beautiful properties, Red Rock and Durango, their portfolio of properties caters to the local market. One of the things I’ve admired about Station Casinos and the Fertitta leadership is how deeply they know their customer. They have to, as many of their base are locals. They drive by those properties every day and make the decision: do I turn in, or do I easily find a different venue? That daily choice means Station can’t afford to get out of touch with its customers. And they haven’t. They’ve succeeded through smart strategy and real connection. No parking fees or $33 bagels there, and some of the best hospitality Vegas has to offer. And this philosophy does quite well for them as their revenue numbers are sweet to say the least and reflect performance where it matters most: understanding, meeting, and retaining their core customer. (Red Rock Resorts Investor Relations+1).
The Las Vegas Strip’s strategic shift is the biggest opportunity yet for the rest of all that Las Vegas has to offer to bring in business like never before because there’s a large swath of bona fide customers who we’ve established have both the propensity and ability to game in Vegas — we just need to find them a new home. This is a solvable problem, to say the least. There are many ways to achieve this, but here’s my two cents of advice, focusing on a couple of the most vocal complaints that would have an immediate impact. Taking a chapter from the Stations playbook, these properties as a collective should begin at a minimum for locals, but I dare I say for all: “No more parking fees.” That kind of message could reset the mindset of irritated repeat visitors to still come to Vegas in ways no campaign ever could. Now, if I were a betting gal, I’d be willing to bet that no one’s going to jump in on this idea; the amount of lost revenue this would cause, at least initially, is not lost on me. But since paying for parking appears to rage bait most of our recently displaced visitors, maybe a reduction in parking fees is an option to say, “We hear you.” Eventually, it will all be Uber and autonomously driven cars anyway, which will not have to park at a property that requires payment to park. Maybe get in front of this inevitability over the next few years as a token of goodwill that further solidifies the relationship with the customer.
If parking is not on the table, let’s start simple with coffee. Vegas is everything, all the time, 24×7. A cup of Joe is needed. How about a basic cup of coffee is never more than $4 in Vegas? Or better yet, a nod to the old days, “We’ll cover your coffee when you have breakfast with us.” Beans, filtered water, cup, lid, stirrer, napkin, sugar, to cream on top—you’re still looking at an 80 to 90% margin, and some or potentially all margin lost would be offset by new customers.
I’m not wrong here with the coffee idea.
Here are some free slogans for those who take the challenge. “All the Thrill, Without the Overbill.” “Where the Wins Are Big but Your Tabs Are Small.” “Luxury experience without First Class Prices.” I could go all day; it’s kind of my zone. But I’ll leave you with this thought inspired by similar words from Maya Angelou, adapted for us, as you chart your path:
Vegas is an experience. Visitors don’t just remember what we offer, they remember how we made them feel.
We have another great edition on tap for you, covering every facet –casinos, hospitality, F&B, leisure, and sports–of this amazing industry of ours.
As always, I hope you enjoy this edition, and thanks for welcoming G&L into your home and office this fall.