Las Vegas Casinos Taking Advantage Of Better Economy With Pricing Adjustments
The recession is over in Las Vegas. The Las Vegas Convention and Visitors Authority reported 41.1 million tourists in 2014. That broke the previous record of 39.7 million visitors in 2012.
Las Vegas resorts no longer have to compete solely on rates to help fill hotel rooms. Many operators decided to take advantage of the better economy by discreetly raising prices.
Modest hotel rate increases
Hotel rates in Las Vegas are up marginally from previous years.
The average hotel rate in 2009, the crater of the Great Recession, was $93, according to the Las Vegas Convention and Visitors Authority. That number was $117 in 2014.
The previous peak before the recession was $109 in 2008. While hotel rates are only up 7.3 percent since 2008, resort fees more than make up for it.
Resort fees add to hotel profits
The concept of resort fees picked up steam in the past few years. These hidden charges started out at $5 or $10 per night in the late 2000’s.
Resort fees exploded as high as $30 per night at five-star Las Vegas resorts in the past year. Skift.com reports that some MGM Resorts hotels now charge $30 per night to guarantee room requests that include a smoking, location or bed preference.
Caesars Entertainment once proudly boasted that it was free of resort fees. Caesars joined the resort fee trend in March 2013.
There are still a handful of Las Vegas hotels that do not charge a resort fee. Most notably, Boyd Gaming’s downtown properties still do not charge a resort fee. The only Las Vegas Strip hotel without a resort fee is Casino Royale.
The Cannery, Eastside Cannery, Four Queens and M Resort are among the other major Las Vegas casinos that do not charge a resort fee, according to the last Vegaschatter.com update.
Table game odds reduced
Las Vegas table game odds have dropped considerably in the past few years.
Caesars Entertainment rolled out 6-5 blackjack at tables in higher traffic areas last decade. Most of its properties offer full pay 3-2 games at lower limits for players willing to look for them in lower traffic areas of the casino floor.
In March 2014, Venetian and Palazzo took the bold step of converting all blackjack tables with a minimum bet below $50 to a 6-5 payout on a natural. Competitors took notice as players continued to flock to these tables that offered reduced payouts.
It wasn’t long before MGM Resorts dropped blackjack payouts at games under $25 at Mirage and Mandalay Bay. This policy was instituted at all of its Las Vegas properties by July of this year.
A blackjack survey during July found just three tables at MGM properties that offered a 3-2 payout on a natural with a minimum under $25. Two were at New York-New York. The other was at Mirage.
More than 100 blackjack tables across all MGM properties paid 6-5 on a natural, based on a July survey this author compiled for Wizard of Vegas.
It wasn’t just low limit tables that suffered unfriendly rule changes at casinos under the MGM Resorts umbrella. High limit salon tables at Luxor, New York-New York and Monte Carlo changed from standing on all 17’s to hitting on them, a rule that adds 0.22 percent to the house edge, according to the Wizard of Odds.
These games also saw the minimum bet raised from $50 to $100 during that recent survey.
There is one Las Vegas Strip casino that has resisted the 6-5 blackjack trend. Treasure Island does not spread any 6-5 games at its double deck or shoe games.
The minimum bet is typically $10 for these games. The shoes still offer surrender and re-split aces, player-friendly rules that are hard to find at other blackjack tables on the Strip with a minimum bet below $50.
Wynn and Encore were the latest to lower player returns at table games. Wynn Resorts converted most of its blackjack tables under $25 to a 6-5 payout on a natural. Blackjack wasn’t the only game affected.
Most Las Vegas Strip casinos spread 3-4-5 times craps odds. Wynn Resorts offered the same craps odds until July. Wynn and Encore now cap craps odds at true double, meaning that the maximum allowable win on an odds bet is four times the flat wager, regardless of the point.
The move did not affect high limit craps players that enjoy a table in the salon. The minimum bet there starts at $100 during the week and $1,000 on weekends. High limit craps tables at Wynn still offer 3-4-5 times odds.
Steve Wynn explained the business decision during a July earnings call. “I changed the casino,” Wynn told investors. “In effect, I raised the price.”
“We win more money with (fewer) games now,” Wynn said. “These are some of the reasons why we make more money than anybody else in Las Vegas.”
Wynn expects other Las Vegas casinos to follow his lead. If the history of 6-5 blackjack is any indication, he is correct.
Comps also dropping
Las Vegas casinos are not as generous as they once were with rewarding gaming action.
Caesars Entertainment started charging a resort fee on comped rooms for players that have not achieved the Diamond tier of the Total Rewards program. This policy turns a free room into a $25 per night one.
Las Vegas poker rooms are scaling back comps. Venetian dropped its hourly comp rate from $2 to $1 an hour in August. The Venetian poker room also voided poker comps for any player that failed to give cash game action in the previous 365 days.
This policy now matches its Grazie one that applies to casino players. It is common for players clubs to void points for players that fail to give action in a 12 or 15-month period.
The poker room at Wynn Las Vegas also dropped rewards last month. Poker players now earn $1.50 per hour. The previous rate was $2 per hour.
While reduced from previous levels, poker players in other markets typically receive no more than $1 an hour for comps.
Mirage is experimenting with a new drink comp system at its video poker bars. Players receive a free drink for depositing $20 into a machine. Additional drink tickets are determined by the machine, not bartender discretion, according to a report from Vital Vegas. Historically, Las Vegas casino bartenders issue free drinks discretionarily.
Westgate, formerly LVH and Las Vegas Hilton, recently dropped its longstanding policy of offering free drinks to all race and sports players with a bet ticket in hand. Players must now wager $50 on a sporting event or $10 on a horse race to receive a free drink ticket, according to Kirk Chamberlin.
This puts it in line with other Las Vegas competitors. The previous policy was a perk that bettors enjoyed until this week.
Slots tighter now more than ever
A recent report demonstrates that slot payouts are now tighter more than ever.
The average slot machine in the U.S. across the 12 states surveyed in the report had a 7.7 percent house edge in 2014. Nevada had the lowest slot hold at 6.4 percent, up from 5.72 percent in 2004.
While Nevada holds the honor of hosting the loosest slot machines in the country, the hold is still 12 percent higher than it was in 2004.
Price increases subtle
Tourists may not notice a resort fee of $25 or $30 per night. Gamblers may not immediately realize the difference between winning $12 and $15 on a $10 bet when getting dealt a blackjack.
A four-night comped stay actually costing $100 plus tax may also fly under the radar. These are the bets that Las Vegas casinos are willing to make in an attempt to improve profits in the improving U.S. economy.
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