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Archive for February 2011

Yes I know, I’ve probably already caught some negative attention for making such a bold claim. By now, the majority of people in the US at least have jumped right on the “NO SMOKING” bandwagon. Restaurants are non-smoking, in fact, you can’t even smoke within a certain number of feet within the entrance. I can remember a time when the Reno airport had indoor smoking areas…yes, that means you didn’t have to take a 10 mile hike outside to smoke and then make your way back through the ever-pleasant experience that is airport security. I should also note at this time that I am not now, nor have I ever been a smoker.

Smoking in casinos has been a hot topic for several years now. Casinos are one of the only places left in America in which you can still smoke inside. For the most part, casinos have removed active smoking from restaurants, but you can still smoke almost everywhere else. A new study by the Iowa Tobacco Prevention Alliance was released just days ago and claimed that 63% of Iowans surveyed want smoking banned on the casino floor of neighboring states. I’m sure the stats are similar in most jurisdictions.

So, let me get back to my point. Saying “NO” to no-smoking. Casino operators are fighting smoking bans ferociously. Casinos feel that by banning smoking, they will lose business. And they likely will. Of the gamblers that smoke, many will sit at a table or machine for hours on end, continuously dropping dollars into the machine and chain smoking like a fiend. Consider a smoking ban. Those smokers would now have to leave their machine, which means cashing out and potentially leaving a “hot” machine, and going outside – possibly into the freezing cold weather – to smoke. Well, if that was me, I would probably just head out to my car and head home. That takes my gaming time down from potentially 5-10 hours in some cases to probably around 2 hours. That is a lot of money to be losing.

The casino industry, being in a state of panic due to the current economic conditions, is not in any hurry to lose business, as minimal as it might be. In 2006, the University of Nevada Reno conducted a study showed that the threat of loss of business from smoking bans might not be as extreme as was originally thought. The study showed that 4 out of 5 gamblers are NON-SMOKERS. The original number of gamblers who were thought to be smokers was 70%! That is quite a difference.

So, should casinos now reconsider their activism against smoking bans? It might be time to study the positive effects of smoking bans for the 80% of people who are non-smokers. They were more than willing to advocate for the 70% of customers they thought were smokers, so it only makes sense to look at it from a new perspective. Right?

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I just read about the new promotion, We Love Locals, that was recently launched by Station Casinos in Las Vegas. Customers are able to go to the website each week and vote on a new promotion that will be valid the following week. For example, this week’s offer is a $30 for $60 seafood dining offer. There are three options to vote for next week, including a $25 for $50 steak dinner.

Seeing this promotion got me thinking about how casinos and other tourist related industries should start directing some more of their marketing dollars towards those close to home – locals! People are traveling less now that the economy is in a slump, so rather than traveling, customers will start looking for entertainment and services that they would usually travel for in their own neck of the woods.

Sometimes, casinos who feed from a locals market, similar to the market in Reno, tend to take their local customers for granted. They figure, since the customers are already in town, and are established customers, they will not venture out and spend those valuable dollars elsewhere. The “real” value is in the out-of-towners. They spend the money that directly increases the bottom line. However, taking day to day business for granted in an economy where consumers everywhere are looking for the best deal, is not necessarily the best way to do business.

It’s time to start focusing on the bread and butter of your business again. Start adding more value those who keep the business running and thriving on a daily basis. What do you think are some of the best ways to add value for your local customers?

In 2004, the Hard Rock Casino in Las Vegas came under fire from the Gaming Control Board because of their racy marketing campaigns, alleged drug use/sales in the nightclubs, and allegations that the casino/nightclub executives facilitated sexual encounters in hotel rooms for guests. In a town best known for the slogan, “what happens here, stays here,” it is a bit of a contradiction that a property would get in so much trouble for selling the “image” that Vegas has been trying to sell for so long.

Convention and Visitors Authority Logo for What Happens Here, Stays Here

So, let’s examine what got the Hard Rock in trouble. The following advertisement was released about 7 years ago by the Hard Rock Hotel.

Hard Rock Advertisement

There are several things to note about this ad. First, the tagline, “there’s always a temptation to cheat.” This could imply that the man is cheating on his wife/girlfriend or vice versa, or that the couple is cheating at the blackjack table. The ad also features several vices: drinking, smoking, sex, and gambling. Part of the issue the GCB had with this ad was that it was borderline pornography. You also are not allowed to advertise illegal activity, ie, cheating at gambling – whether that is actually what is being portrayed here or not. So, “what happens here stays here” clearly does not apply in this case. Let’s look at another Hard Rock ad:

Hard Rock Billboard

The tagline in this ad is, “get ready to buck all night.”  This ad was intended to target the National Rodeo Finals visitors, instead it attracted negative attention from regulators. This is clearly a racy ad, however once again, in a town that has built their reputation on “what happens here stays here” it seems contradictory to come down so hard against the Hard Rock in this instance. I think in the end it was the collection of advertisements that got them in trouble, along with the allegations of inappropriate sexual activity and drug use. The Gaming Commission agreed, and rejected the suit by the GCB. The issue was more regarding free speech than it was about obscenity. I tend to agree with the Commission. Unless there is outright nudity being shown, it is difficult to argue against this kind of image portrayal. Illegal activities such as illicit sexual activity and drug use should be dealt with as a separate matter than R-rated advertisements.

Hard Rock’s response to the suits:

Bravo Hard Rock, Bravo.

Today is the Chinese New Year Party at work celebrating the Year of the Rabbit, so I thought I’d take a moment to do a little research and find out what the history and significance of the Chinese Calendar and the Year of the Rabbit is.

The Chinese Calendar predates the International Calendar, so it has been in use for centuries. The actual Chinese New Year was celebrated in 2011 on February 3, however, most casinos traditionally hold their celebrations in the weeks following. The Chinese New  Year can be named in three different ways: by an animal (Rabbit), by it’s formal name (2011 is XinMao) and by the actual year (2011 is year 4708).

The Year of the Rabbit includes people born in the years 1915, 1927, 1929, 1951, 1963, 1975, 1987, 1999 and 2011. People born in the Year of the Rabbit are catagorized by the following characteristics: articulate, talented, ambitious, lucky with money, fond of gossib, cool tempered, good gamblers because of the ability to choose the right thing – however they seldom gamble because they are conservative and wise. Compatible signs: Sheep, Pig and Dog.

My Chinese Zodiac sign is the Pig (Boar). According to the zodiac, I am supposed to be chivalrous, honest, have few friends but have them for life, have a great thirst for knowledge and are quick tempered. Most compatible with Rabbits and Sheep. I feel that is pretty close to my personality. It is true that I have few friends but they usually tend to be very close friends. I am studying for my MBA, so I clearly have a thirst for knowledge.

What is your Chinese Zodiac sign?

Information for this article was found at the following addresses: www.chinapage.com/newyear; www.c-c-c.org/chineseculture/zodiac/Rabbit

Still snowing and no signs of stopping here in Reno, Nevada.

View from my balcony

While trying to maneuver my rear wheel drive Mustang to work this morning with several inches of snow and all of the fantastic (not!) Reno drivers out on the road, I was listening to a morning show on ESPN radio and they were talking about how successful NFL teams always have a front office that respects and takes care of their staff. Teams like the Colts, Steelers and Packers all have front office management that takes care of their staff very well, and that’s not just the players. They treat everyone well from the coaches to assistant coaches to people who work in the offices. Teams like the Cardinals and Texans do not have the reputation for taking care of staffers. And it shows. Look at the records of those teams over the past however many years. The Texans have had a decent start the past few years, but they always end up falling apart mid-to-late in the season. It’s no coincidence that the Colts, Steelers and Packers usually have very successful seasons.

The same can be said for business. Companies on the top of the Fortune 500 Best Companies List all share qualities that have to do with taking care of employees. SAS has been at or near the top of the list for numerous years. They offer employees on site child care, health care and a gym for employees to name a few. Employees at that company feel that they are cared for and held at a high level by the company, so in turn, they are more productive and care more about the work they do.

Casinos are notorious for cutting the perks out of jobs. Many health plans are less than amazing, cafeterias serve what can only be seen as buffet leftovers, and most have completely eliminated perks such as 401K matching. Now, I understand that the economy is suffering at this time, but it would do these casinos well to start appreciating their employees. If you appreciate your employees and they can see the effort, you will see an equal effort, if not a better one, from your employees. And in terms of differentiation from other properties, sometimes customer service is the only leg you can stand on. Slot machines, free play and table games can be found anywhere, but a positive guest experience by way of good customer service can truly set you apart from your competitors.

It’s snowing outside in lovely Reno, Nevada, so what better way to spend the evening than blogging about lessons we can learn from Las Vegas. The 90s were categorized in Las Vegas by a building boom. It all started in 1989 with the grand opening of the Mirage. This was followed over the next ten years with the openings of Treasure Island, Luxor, MGM Grand, Stratosphere, Monte Carlo, Bellagio, Venetian, Paris and Mandalay Bay. Steve Wynn was the pioneer of the mega resort in Las Vegas and the period from 1989 until basically the end of 2006 showed tremendous growth in Las Vegas. Housing boomed. Casinos boomed. And with that, construction boomed.

The Great Recession that started in 2007 crashed the entire market in Las Vegas. The crash was widely unexpected and many mega-resorts in Las Vegas were in the works of being created. This is more of what you will see in Las Vegas these days:

Note the cranes. The center photo is of unfinished construction in Las Vegas. You can read on the steel “Sin City Iron Workers Local 433.” There are structures in various states of finish all up and down the strip which include CityCentre, which has only caused MGM heartache since it’s inception, as well as Fontainebleau, and Echelon – neither of which have ever seen their grand openings. The really unfortunate part is that most of these structures that have exposed steel, like the center photo above, will never see the light of day. The steel is weathering due to elements and will likely have to be scrapped at some point.

So, the real question is, could we see this coming for Las Vegas? Perhaps the financial crisis could have been seen; after all the housing bubble was never going to be sustained, but Las Vegas should have seen that it could not just grow and grow and never see a decline in gaming revenues. The gaming industry in Nevada has defied most principles of the business life cycle, and has seen a period of industry growth that has rivaled even the most successful industries. But all industries must see a period of maturity and decline, and we are beginning to see that maturity and decline taking its toll in the face of the worst financial crisis since the Great Depression.

Suggestions for the survivors?

One of the cornerstones of casino marketing, as well as marketing in other industries, is brand recognition. Your brand is your identity as a company. Take for example the following:

Which soda would you choose?

VS.

If I’m venturing a guess, I would think at least 9/10 people, if not more would identify more with the lower image (Coca-Cola) rather than the upper image (generic grocery brand). Some people might prefer the generic cola simply because they prefer the taste, but if you put these two photos in front of a person from any country on Earth, they could most likely identify the bottom photo as Coca-Cola. The point is, Coca-Cola has spent a lot of time and money developing their brand as recognizable and reliable.

The same is true for casinos. Note the following brands:

VS.

Most could clearly recognize the Wynn brand as a pinnacle of quality and luxury in Las Vegas, while the Hilton brand can be associated with hotels and/or casinos. Steve Wynn has spent many years building his brand in Las Vegas, and it paid off when he expanded his brand into Macau, China. There were only a few casino licenses handed out in this lucrative gaming region, and Steve Wynn won one of the licenses. Even today in Macau, the Wynn resort is one of the most popular due to the brand recognition worldwide.

When building your brand recognition, there are a few important guidelines to follow. The first is brand promise vs. brand performance. The promise must meet performance. If you preach excellence, and then do not deliver, your brand will not be strong. If you walked into the Wynn Las Vegas, you’d expect the sights, sounds and experience to match your vision of what you thought you would see. If you walked into your room in the Wynn Las Vegas and the paint was visually unappealing, the food was less than delicious, and it smelled like a cheap Motel 6, then I think Wynn must not have delivered performance that matched the promise he made to consumers when marketing his brand. Another thing to keep in mind is tangible vs. intangible assets. It is far more difficult to imitate intangible assets, and therefore, these are the assets that must be marketed more heavily when building a strong brand. Coca-Cola is a master when it comes to marketing intangible assets. During Christmas-time, Coca-Cola launches a campaign each year that focuses on Santa and polar bears and penguins. Most are very cute and have a retro-feel, and they focus more on snow and the holidays and polar bears sharing Coke with the penguins or Santa. I ask you, what does this have to do with Cola? Does this make the consumer know how the Cola will taste? No. Instead, they are marketing a feeling. The feeling a consumer will get when they drink a Coca-Cola. This is the object of brand recognition marketing.

Image Credit – IGA Cola

Image Credit – Coca-Cola

Image Credit – Hilton

Image Credit – Wynn


About Me

This blog is devoted to the gaming industry news and information - keeping you up to date on the happenings in the gaming world. My personal expertise lies in event planning and entertainment in casinos.

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