Last week, the governor of Nevada presented his “Road to Recovery” plan and announced that Las Vegas casinos will not be reopening until, at the earliest, late June or July. This estimate seems wildly optimistic and would mark approximately four months of closure. While politicians try to ease the panic and attempt to offer a positive spin, the reality is far more bleak. Las Vegas faces the steepest and most difficult climb back to normalcy of any city in America. And even when Vegas does “re-open,” the town we once knew will likely never be the same.
While opening the casinos may be welcomed by the local gamblers craving for some action, it will not signal recovery. The reality is that twenty years ago, Vegas was THE place to gamble – only a few states had casinos and nothing could match the action and excitement Vegas provided. Fast forward to 2020 and nearly every American can get to a casino with three hour drive or less. Large, well-funded properties are popping up in states across the country and with sports books slowly being added to the menu, the need to fly to the desert is diminishing.
It’s no longer a secret that Las Vegas now relies on conventions and non-gaming revenue to survive. In fact, the new Resorts World mega-property under construction on the Strip projects that 75% of its income will be from non-gaming sources. How long will it truly be before the shows, nightclubs, fine dining, and spas are back in action? It probably will be a year before you can even go to the pool to look at all the beautiful women that are out of your league. What high (or even low) roller in their right mind is getting on a plane and flying to Vegas? What is the allure?
For the first time in a quite a while, the casinos are going to have to buy business. And I’m not just talking about the standard catering to the big-money player and whales that casinos are accustomed to. Casino marketing teams will have to step it up across the board to compete for the regular gambler’s business. The casinos that understand the pulse of the gambler and the competitive nature of the business will survive by slowly winning back customers and implementing savvy retention programs. Bonuses, comps, free plays, etc. will have to become the norm. Any casino that believes in the “if you build it they will come” mantra that led to the two-decade Strip explosion are in for a rude awakening.
I hope they figure it out before it’s too late to save the town that I love and call home. Just last week, a friend of mine who is a well-respected casino host with an extensive customer book lost his job. His personal relationships built over the years are invaluable, well beyond the action he brings in the door any given week – and now more so than ever. However, the “powers that be” have used the current conditions as a pretext to get rid of him and dozens of others just like him. These types of near-term decisions will cost casinos millions of dollars over time and cripple their chances of surviving.
My crystal ball tells me that when this pandemic fades and the casino industry restarts, places like Atlantic City and other “day trip” markets will increasingly start to eat away at the Vegas Strip casino profits every month. It was already happening and the fallout from COVID will only accelerate the trend. Disposable income will be more valued, driving will trump flying, and added travel safety concerns will offset the temporary high visitors feel from landing in Las Vegas and placing that first wager.
They say the world will never be the same. I don’t know if I agree with that. Time will tell, but I think people will move onward and upward for the most part. That said, the fact remains this pandemic only sped up the process of what already was coming down the tracks: Las Vegas dominance as America’s go-to gambling spot is quickly becoming a thing of the past. It is up to the executives at these corporate behemoths to figure out how to get the masses back to the desert. The clock is ticking.
If a tree falls in the woods and no one is there to hear it, does it make a sound? That philosophical question on observation and perception come to mind this past week as I was reflecting on the...