I'm pissed at paying $11 for a draft Yuengling beer at the Boardwalk Bar in Atlantic City. Thanks to being tone deaf towards customers and competitors in AC, their numbers are going down at a higher rate compared to the market. Cue @EzE for a graphic.
I'd say it didn't. MGM massively overspent on CityCenter, his flagship property, and took an enormous loss on it. The sale and leasebacks now add a substantial expense for the next economic downturn, leaving the company vulnerable.
Agreed. In today’s environment, I’m sure they are quietly satisfied, if not thrilled, with selling rooms to micro rollers at Flamingo/Harrahs/Linq for $0 room rate and $45 resort fee.
The downturn was tough but they also had Dubai eating half of the CityCenter problem - they found some inexperienced money and had them hold the bag. Murren consolidated the operations into one MGM and left them in a position to own 30% of the Strip. He never let their assets decline the way Caesars did. They never went bankrupt. MGM was in a much better place in 2017 than Caesars was, and it's still paying off today The sale and leasebacks are everywhere at this point; the public cos believe in the tax structuring and that the vulnerability is off in the REITs
They never went bankrupt because Kerkorian bailed them out, and they had significantly less debt to begin with. That doesn't have anything to do with Murren. Doesn't matter if they're everywhere. It's irresponsible to sell off all of your physical assets, send half of their earnings to a REIT and then use the proceeds to buy back stock. There's a reason MGM's share price hasn't gone anywhere in almost a decade.
Boyd doesn't charge resort fees on comped rooms. At CET, I'm Diamond through Wyndham matching so I pay no resort fee. Just $69 for 6 nights and they give me a $100 celebration dinner. I also have 25,000 rewards credits from the Wyndham Business Earner Card + another 20,000 from Caesar's Rewards Credit Card spend. And I don't actually...you know...gamble there. So, for me at least, they may be losing money. But my point was the actual rate did decline by 37% and Boyd did offer to comp me the first time in 5 years....There has to be more behind that than just trying to squeeze me for the resort fees I don't pay. Both outfits are obviously making a push to get warm bodies in the door, and if they're showing me love, they aren't being picky. My hypothesis is new competition and the consumer being more cost conscious.is showing up in higher vacancy rates than they anticipated, and they've determined that it's better to fill the place up with lower margin guests than to have it go empty. Who knows? It could just be an anomaly or a 1 quarter problem Only time will tell.
Caesars are making significant money from your spend. They earn a 2% CC Fee from your spend. The points are worth a fraction of that. You'd be better off spending on a standard 2% Cashback card.
I do it often but at the time I was with friends at the Wild Wild West during March Madness. I still remember when the Mountain Bar had $3 beers. BTW, at Caesars there is VP at the Toga Bar and Hell's Kitchen but the latter is open just during dinner service (with bad pay tables). There are a few VP machines at the Sports Book at Wild Wild West, but drinks are not comped.
To the point of a 2% cash back card being a better deal for me, you're probably right on the Ceasars Card. Only thing in my defense is that those charges are all charges for my business, so I don't technically pay for them, my wife, the CFO does.....and the rewards points are now an important part of my hidden Vegas slush fund.
that price reduction shows how it might not be working. They want to charge more for rooms, but no matter what the CEO is trying to do, if there still lots of open rooms, revenue mgmt will lower the price to fill them up. High end hotels do not do those super discounts to get people in.
Preach! I'm shocked MGM managed to get north of $1B for the operations of Mirage. Imagine how much it could have gone for if they actually owned the property. Selling off all of their physical assets is going to come back to bite them later. They also have much higher brand standards. If an individual property doesn't abide by those standards or consistently makes the overall brand look worse, that property will have to fix the issue immediately or risk losing the flag. CET does not seem to have those standards. Just check YouTube for absolutely filthy rooms at Flamingo and Harrah's. Most of their rooms show particularly bad wear and tear. They seem to be more concerned with squeezing in another room or two per housekeeper shift or delaying a renovation or refresh than they are with providing a higher end product.
I'm a middle customer and yes I am pissed. When Harrahs ran CET they actually seemed like they cared about people. I don't get that at all with Eldo. I've been Diamond Elite for years and dropping that to Diamond Plus. Our gambling has dropped way back. It's not the fun it used to be.
Along with the Monte Carlo to Park MGM transition that was a mess, the MGM 2020 Plan, the construction of MGM Springfield and MGM National Harbor, and letting Sibella pull off his shady stuff at Mirage and MGM Grand. The only thing Murrien did right was building T-Mobile Arena, but there was no way he could mess that up with the NHL, UFC, and Bill Foley involved. When you read the MGM 2020 plan press release, you see the same verbage being currently used by Tom Reeg: https://investors.mgmresorts.com/investors/news-releases/press-release-details/2019/MGM-Resorts-International-Announces-MGM-2020-Plan/default.aspx
I’m in no doubt about what Tom Reeg said regarding his intentions for the Caesars portfolio. Whether there has been any actual success in achieving these lofty stated aims is an entirely different question.
I really don't think of any CET property as being close to high end. I've stayed in pretty much every possible room over the years, and even their flagship multi-bedroom suites are pretty run down. I like to gamble at Caesars, and used to love it, but that has wained heavily over the years. I've been Seven Stars for a little over 12 years now, since I was 24, and they have just given up on everything. It used to be a rewards system that really took care of high end players, with a lot of benefits and nice rooms. Now it's just a lot of low end rooms and no benefits. Whenever I describe Caesars properties to people, I always tell them that they are, in general, the lowest tier properties on the strip, that focus on selling cheap rooms to people planning on killing a 30 rack in their room. I feel like Caesars is really just pushing to be the Motel 6 of the Las Vegas strip. It's cheap. There is some old furniture and a bed. Half of the elevators might work at any given time. They just don't have the customer service of Motel 6. Granted. I love my host. She's probably the only reason I still play at Caesars properties, and damn sure the only reason I played enough to have over 100k in W2's last year. I'm even having dinner with her Saturday. If she left for somewhere else, I'd just do 10 days of play a year to maintain Seven Stars so I can always book free rooms when friends visit me that would feel out of place at higher end properties.
