Back in the Game

As gambling revenues tumble, casino resorts think anew about wooing group business.

By Marc Boisclair

If anyone can appreciate the value of a dollar it’s Marianne Brush. As executive VP of the Massachusetts Society of CPAs, Inc., Brush deals day in and out with people famous for uttering phrases like “bottom line” and “bang for the buck.” When Brush recently wrapped up the group’s management and educational meeting at the MGM Grand Foxwoods in Connecticut, though, she discovered that she’d learned a few things herself.

For starters, “room rates have definitely been slashed a lot,” says Brush. And bigger wasn’t necessarily better, as Brush only booked about 140 attendees for the meeting. “That’s small for a casino resort because they all bill themselves as a national destination,” she says. “But all of a sudden they’re clamoring to get us.” And, another surprise, the CPAs themselves were happy to be meeting at a gaming resort. “We created a buzz about going to a casino for our management meeting, saying it would be fun to see everyone there, and attendance was up,” she says.

Indeed, one needn’t be a CPA to do the math here. With gambling dollars down and casino hotel rooms empty, groups suddenly seem much more attractive as an alternative source of resort revenue. It was not so long ago that planners in search of a gaming destination heard either “Sorry, your business is too small” or nothing at all from resorts. These days it’s a flurry of e-mails, direct mail and “robo” calls touting the marriage of meetings and casinos. The challenge for planners is to entice their attendees, board members and CEOs about the plusses of meeting at a gaming resort while negotiating a good deal before the good times end.

A buyer’s market — for now

Given how the recession has affected the gaming industry it’s no surprise that opportunity now knocks for group business. The big shock, though, is how dire things have gotten for casino resorts. In Nevada, October 2009 gaming revenues plunged almost 12 percent from that month’s 2008 figure, the 22nd month in a row of decline, according to the Nevada Gaming Control Board. The Reno-Sparks area in Northern Nevada showed an almost 14 percent drop in revenue from October 2008 to October 2009, its 28th consecutive month of decline. Las Vegas in particular has felt the economic squeeze on both the leisure and meetings sides, with more than 8 percent fewer conventioneers from the previous October, and a 25 percent drop in meeting attendance for the year to date. And with some 141,000 guestrooms to fill in Sin City (not to mention the spectacular new CityCenter that came on line in December with another 6,000 rooms) October’s average room rates also took a hit, shrinking by almost 14 percent from that month’s 2008 total.

Vegas and Nevada are not alone. Atlantic City’s November gaming revenues dropped 13.4 percent from the previous year, per figures from the New Jersey Casino Control Commission. Nationwide, the dozen states with commercial casinos, Nevada, New Jersey and Illinois among them, showed an average drop of 7.4 percent in gaming revenues in the fiscal year ending June 2009, according to a recent New York Times report.

“They are hurting. I have people calling me constantly,” says Ron Biggs, director of procurement for Hoya Vision Care in Dallas, who has brought several meetings to Loews Lake Las Vegas, an off-the-Strip property, during the past year or so. “It’s just a very opportune time for groups to book Las Vegas,” he says. “They’ll be surprised how far their dollar will go.”

Biggs’ advice is seconded by no less than the director of sales and marketing at the Loews Las Vegas itself. “Believe me, we’re all dying from the downturn in rates and we can’t wait for things to get better,” says the Loews’ Jim Caul. In the meanwhile, though, Caul agrees that planners would be wise to book now before the economy improves. “The advantage is that it’s still competitive and soft from a hotel standpoint, and those hotels are looking to get base business on their books for the future,” says Caul. “Unlike all those groups who signed two years ago and can’t pay the rate now, you’re locking into a structure that will support what your budget will likely be in the future. If you wait and the economy turns around then you could get squeezed out by much higher rates.”

Caul is hardly alone in rolling out the Las Vegas meetings welcome mat. “I can speak for my fellow hoteliers in that we are all doing the same things,” says Mitchell Hirschman, director of sales and marketing for the JW Marriott Las Vegas Resort & Spa at Summerlin. To wit, Hirschman refers to some great rates, incredible concessions and a willingness to work with less than citywide business. “Many properties are going after smaller groups as customers, something they would never have done in the past,” he says. “We’re starting to see a break in that perception and so we’re getting some great pieces of business on the books for 2011.”

And as Marianne Brush discovered, even at the regional casino resorts like Connecticut’s MGM Grand Foxwoods and Mohegan Sun, which tend to weather the economic downturn better than gambling destinations like Nevada, Atlantic City and Mississippi’s Gulf Coast, groups can strike a deal. “We have group bookings all the way into 2013, with associations, corporate business and retreats,” says Monte Hartl, hotel general manager at South Dakota’s new 140-room Lodge @ Deadwood. “We’re soliciting not only regional events but national business to come to Deadwood, as well as overseas business from Japan, Germany and Italy.”

“We are not in the same boat as Vegas and we exist predominately off the regional market,” says Chris Perry, the Mohegan Sun’s VP of hotel sales and marketing. Perry adds that while room nights dropped 30 percent and room rates fell 10 percent in the past fiscal year, the outlook for next year appears better. “The group market has a place here,” he says, and deals can be had, especially on shorter-term bookings.

The JW Marriot’s Hirschmann cautions, though, that while casino resorts may be amenable to a deal for now, their memory may prove short once the economy heals. “There’s a concern that we will forget about the way we’re currently doing business and go back to some of the practices we have had,” he says, in which case “locking in business for the future now is the way to go.”

Gaming done right

Given the current détente between groups and gaming resorts, the timing would seem ideal to move forward on a casino meeting, but with some planning caveats in mind. First off, be doubly sure that your group even wants to meet at a gaming resort before committing, and then promote the event accordingly. “It helps to build in a little social atmosphere beforehand,” says Marianne Brush. “Leverage the fact that there’s fun to be had at a casino and go in with the attitude of ‘let’s work hard but play hard’ and enjoy the surroundings.”

It also helps to educate your attendees about what to expect in a gaming environment, even those who’ve experienced a casino resort meeting beforehand. One of the biggest challenges is making attendees aware of whom they’ll run into on the game floor and why. “There are a lot of gamblers out there who are getting special prices from a casino and you can’t compare their situation with your own,” says Steven Ledewitz of Cajun Group & Convention Travel in Boynton Beach, Fla. In 2008 Ledewitz booked about 350 attendees into the Foxwoods Resort & Casino in Connecticut. “This group was unique in that they were all professionals and understand casino marketing,” he says. “A group I’d booked a few years before in Vegas was not as understanding, would meet people in the casino who were paying half their room price and thought that the association was pocketing the difference.”

Another headache worth avoiding is what could be loosely termed the “time and space” issue. Planners receive numerous complaints about losing attendees to the casino, some of whom just can’t resist sitting down with a one-armed bandit. But in many cases those defections aren’t necessarily intentional: The attendees simply got lost. After all, a resort with 3,000 guestrooms, 12 restaurants, 10,000 square feet of retail and a 100,000-sq.-ft. casino is anything but boutique, with the trip from a 30th-floor bedroom to a seminar or exhibit hall taking 15 minutes or more, including elevator wait time. Prepare attendees early on with a floor plan and time-saving directions, noting breakout rooms and exhibit floors.

If the resort’s own staffers don’t know the lay of their land, however, then moving on may be the best option. Hannah Greenberg, CMP, is director of conference services for Maverick Meeting in Cherry Hill, N.J., just a short trip from Atlantic City. When a meeting client turned down one of AC’s chicest resorts recently in favor of a more modest property it had nothing to do with room rates or catering costs. “The resort was willing to do anything for the client, including meet the menu prices of the other, much lower hotel,” says Greenberg. “The problem lay in the site: The sales person didn’t do his homework and map out the property before conducting our visit. The client walked so far and out of order that they felt the attendees would also be confused.”

Planners should also be wary of the potential disconnect between their convention services department and the property’s front desk and casino staff. Greenberg recalls a nightmare scenario, literally, for one business group in Atlantic City. “Because it’s a casino there’s often no night or day to some of those who work there,” she says. “I had VIPs in from Japan and we had amenities scheduled to go to their rooms.” Timing, in this case, was everything. “At 3 a.m. all three of these men got knocks on their door and the ‘room service’ announcement while sound asleep,” she says. When two of the men didn’t answer, the front desk called to say that someone was at their door trying to deliver a room amenity. “The third guy didn’t hear the knock and what woke him up was someone coming into the room — he hadn’t chained his door,” says Greenberg. “He was so frightened he rolled out of bed and hit the floor. They saw the conference service manager in the morning and he was just appalled.”

Gifts in hand

Finally, when sitting down with the casino resort team, ask for what you want and you just might receive it. “Right now and for the next six months will be one of the best times ever to sign a hotel contract with these folks,” says Timothy Arnold, CMP, VP of national accounts for Hospitality Performance Network in Dallas. His take on the mood in Vegas and elsewhere is that while hoteliers will have learned some humility from this economic downturn, the yard sale won’t last forever. “They won’t be as easy on attrition or other aspects of a contract as they are now,” he says. “Right now they are very client-driven. If you say ‘I want this concession’ then they will likely give it to you. Don’t be afraid to ask for additional things — spa passes, show tickets, preferred status for clients — because the worst they can do is say no. And don’t wait. If you’re looking at Vegas for 2013 or 2014, get the RFP out there because it’s prime time to sign.”