http://www.lasvegassun.com/news/2009/may/11/room-rates-rise-rock-bottom/
That comment strikes me as snooty & somewhat arrogant.
Cameron
Then why buy a hotel that is (in the current market ) a $50 product? I
usually stay at Treasure Island. I like it for a lot of reasons. But when
I can get the Bellagio for less than Treasure Island why would I do that?
Same for the V and Wynn?
With this type of attitude I'll probably be taking my $$ elsewhere. See Mr.
Ruffin I can afford to stay where I want but I prefer to feel like I am
getting a good value for my money, too. Don't see that happening with you
at this point.
Margaret
mrs.fine@comcast,net
I didn't even finish reading this article before coming back here to
comment.
The obvious retort is: IT'S TREASURE ISLAND - and, quite frankly, who
really gives a crap about TI? Sure it's nice enough and has some
fairly decent dining options but this property rivals Monte Carlo for
the title of "Most Generic Mega Resort".
I'm not really sure who the "$50 customer" is exactly but if TI is
planning on increasing their room rates at a percentage that doesn't
match with the other resorts on the Strip, people are going to take a
pass.
Furthermore, I don't buy the claim that the Sirens show has a 40%
capture rate for the casino - it's a mega resort, I'm sure most
people are walking inside to check it out regardless of the fact there
are half naked pirates dancing around outside.
I thought Ruffin's acquisition of TI was going to be a good thing for
the property, and it could be, but this attitude is rather off putting.
I can see his argument, but the problem is TI is a second-tier three
plus-star Strip resort (I'd consider Mirage to be a true four-star),
and there's still a ton of four and five star capacity out there
that's coming online over the next 12 months. I think the ability of
the second-tier resorts to get a lot of traction in a bumpy economy
(even if we're bouncing off the bottom) is going to be difficult. That
being said, TI can probably keep their room rates over $50- I just
don't see them being able to take things north of $100 for quite some
time.
Also, I seriously doubt that Ruffin is going to do much but milk TI
for cash until he can sell it to someone who will demolish it for the
next Strip megaresort. Basically, I see him doing what he did with the
New Frontier- watching it slowly decay until someone offers a stupid
amount of cash for the property during the next Vegas bubble.
Rob "Fancypants" Taylor
Yeah, I don't think any of the casino operators in Las Vegas are in
any position to be so dismissive of the "$50 customer". I'm sure most
of them will be more than happy to take the gamblers Ruffin doesn't
want. Doesn't he realize that the $50 gambler may drop $3K or $4K in
the casino, because that's where they'd rather drop their dough? I
don't know if it's as common nowadays, but I used to hears stories of
guys from the midwest & east coast coming to Las Vegas for big-time
gambling trips, for weeks at a time, staying at places like the
Westward Ho, but gambling big dough. They would stay at the $29/night
joints, eat at the snack bars & coffee shops, but burn thru $5K in an
all-night craps session or a weekend in the sportsbook.
Cameron
> Yeah, I don't think any of the casino operators in Las Vegas are in
> any position to be so dismissive of the "$50 customer". I'm sure most
> of them will be more than happy to take the gamblers Ruffin doesn't
> want. Doesn't he realize that the $50 gambler may drop $3K or $4K in
> the casino, because that's where they'd rather drop their dough? I
> don't know if it's as common nowadays, but I used to hears stories of
> guys from the midwest & east coast coming to Las Vegas for big-time
> gambling trips, for weeks at a time, staying at places like the
> Westward Ho, but gambling big dough. They would stay at the $29/night
> joints, eat at the snack bars & coffee shops, but burn thru $5K in an
> all-night craps session or a weekend in the sportsbook.
Right now, what seems to be happening (as is mentioned in the article)
is Vegas is filling rooms better than a few months ago, but casino
spend and restaurant/etc. spend is down, which sort of goes against
the model you have, Cameron. (Plus any sharp gambler knows that a lot
of the Strip gambling is for suckers: 6/5 single-deck BJ, 3x4x5x craps
instead of 10x, and so on.)
I think Ruffin is probably on-target for not wanting 100% occupancy at
dirt-cheap rates, though- it increases wear and tear on the physical
plant and crowding in the hotel, it means you have to bump up
staffing, and so on, while not maximizing your potential return.
Ruffin is all about cash flow, and if I had to guess, what he wants is
overflow from conventions at Sands that Venetian can't handle (or who
don't want to pay expensive convention rates) + midlevel Strip
tourists (basically, the same group of customers as the non-Caesars
Harrah's properties + NYNY/Monte Carlo/Luxor). $50 is not where he
wants to be for that- that's more in the Circus Circus/Tropicana/
Riviera realm of budget tourists with coupon books. It's probably a
reasonable goal for a while, until the hotel gets worn out like the
New Frontier did.
Rob "Fancypants" Taylor
> Right now, what seems to be happening (as is mentioned in the article)
> is Vegas is filling rooms better than a few months ago, but casino
> spend and restaurant/etc. spend is down, which sort of goes against
> the model you have, Cameron. (Plus any sharp gambler knows that a lot
> of the Strip gambling is for suckers: 6/5 single-deck BJ, 3x4x5x craps
> instead of 10x, and so on.)
>
> I think Ruffin is probably on-target for not wanting 100% occupancy at
> dirt-cheap rates, though- it increases wear and tear on the physical
> plant and crowding in the hotel, it means you have to bump up
> staffing, and so on, while not maximizing your potential return.
> Ruffin is all about cash flow, and if I had to guess, what he wants is
> overflow from conventions at Sands that Venetian can't handle (or who
> don't want to pay expensive convention rates) + midlevel Strip
> tourists (basically, the same group of customers as the non-Caesars
> Harrah's properties + NYNY/Monte Carlo/Luxor). $50 is not where he
> wants to be for that- that's more in the Circus Circus/Tropicana/
> Riviera realm of budget tourists with coupon books. It's probably a
> reasonable goal for a while, until the hotel gets worn out like the
> New Frontier did.
>
> Rob "Fancypants" Taylor
If he plans to charge substantially higher room rates on average than
NYNY, MC and Luxor, his hotel is going have plenty of rooms
available. With the glut of five star rooms rushing to availability
by the end of the year, I don't really see how Ruffin thinks he has
any leverage to start charging an above average premium for the rooms.
Keeping the place clean and enhancing the overall yuppified aura of
the place will do more to keep the CC crowd north of his joint than
unjustified rate increases.
But Ruffin said he wouldn't do that (rolling eyes).
Walt linked earlier to a Las Vegas Weekly article on Anthony Curtis.
He said the casinos got in trouble when the profit focus drifted away
from the casino & I think I have to agree with him. They spent a lot
of money (money that wasn't theirs or money the didn't have) to build
non-gaming amenities, and those are the first things folks will cut
back on when times are bad. All the hoity-toity clubs, shops, &
restaurants designed to bleed customers are worthless if guests don't
patronize them. So you have a situation where the casino has
gamblers, but none of them are falling for the $18 cocktails, $400
bottle service, & $1200 Gucci handbags.
It's not too late for Boyd to scrap the whole Echelon concept & build
a conventional hotel/casino.
Cameron
I don't think north of $50 is "above average" for those properties
(keeping in mind that weekends usually have good price premiums over
weekdays on the Strip). A 3+ star room for $70-80 a night is actually
a pretty good deal compared to many other places in the US. I think he
wants to have TI's prices at about the same as NYNY, MC and Luxor.
Picking a week in July on Orbitz for a weeklong stay, I got this as
the per-night cost:
Bally's $87 a night
Luxor: $90
MC: $92
Paris: $104
TI: $107
Hard Rock: $126
NYNY: $132
Mirage: $142
Caesars: $161
MB: $164
MGM: $166
A little higher than I expected (however, this includes weekend nights
as part of the stay, plus it's far enough out that if room demand is
soft, prices might go down a bit), but the tiering is pretty dead on
to where I suspected it would be- TI is maybe at the high end of the
midrange Strip properties, a little, but well below the Mirage/Hard
Rock/MBCaesars tier of properties.
FWIW, here's the hotels around $50 during that same week: the IP at
$44, Circus Circus at $45, the Strat at $47, Excalibur at $57,Trop at
$58. Ruffin doesn't want to stick his property in THAT tier at all,
for good reasons, because you're in the budget traveler region (Excal
and CC), or ones that are just waiting to be torn down and in serious
dump-hood (Trop, IP), or hotels that are barely "Strip" hotels
(Strat).
Rob "Fancypants" Taylor
> But Ruffin said he wouldn't do that (rolling eyes).
Riiight. ;)
>
> Walt linked earlier to a Las Vegas Weekly article on Anthony Curtis.
> He said the casinos got in trouble when the profit focus drifted away
> from the casino & I think I have to agree with him. They spent a lot
> of money (money that wasn't theirs or money the didn't have) to build
> non-gaming amenities, and those are the first things folks will cut
> back on when times are bad. All the hoity-toity clubs, shops, &
> restaurants designed to bleed customers are worthless if guests don't
> patronize them. So you have a situation where the casino has
> gamblers, but none of them are falling for the $18 cocktails, $400
> bottle service, & $1200 Gucci handbags.
Right, but what makes you think customers who are feeling the pinch of
today's economy won't start betting red chips instead of green ones,
if they are downscaling their other expenditures as well? The gambling
take downtown is down, too (along with the room rates), and I don't
see that they've upscaled much of downtown compared to what they've
done on the Strip. I'm really skeptical that "gambling" is considered
a different part of the budget than "food" or "entertainment". In the
end, it all comes out of the same bankroll. I think the bottom line is
the niche of "wants to stay in cheap clean room like low-roller,
gambles above their weight" may not be one that's very lucrative for
Strip properties (it's a much better demographic for downtown, I
think).
There's also the counterpoint that the operator who's arguably best-
positioned for weathering all of this (in terms of financials) is
Steve Wynn, who is the archetype of "build a casino with attached
shopping mall, gewgaws and high-end rooms for snootybuckets with loads
of disposable cash, and give them every possible opportunity to
dispose of it". (I think Curtis would probably say that Wynn does know
how to run a casino, and was careful not to spend stupid amounts of
cash he didn't really have, though).
> It's not too late for Boyd to scrap the whole Echelon concept & build
> a conventional hotel/casino.
To be honest, what I think is going to happen over the next 12-18
months is people will step in with capital for places like Echelon,
Fontainebleu and so on, and get some Strip real estate at good prices,
on the grounds that they want to be in on the next boom. I think we
MIGHT be hitting bottom, but the overleveraged Strip operators are
going to have to have a bit of a fire sale to fix their balance sheets
before too long.
Rob "Fancypants" Taylor
Don't get me wrong, $50 is remarkably inexpensive for that property
and I wouldn't expect to pay that rate on a regular basis (if at
all). Those numbers you posted seem high I must admit - but if rates
are on the upswing perhaps those numbers are a reflection of the
increase.
While I don't know what constitutes a $50 customer per se, I do
understand the concept of value, and dismissing a customer base
because they've been simply taking advantage of the historic rates
seems ignorant.
Two years ago during a Vegas trip I was a $140 customer at Paris, last
year I was a $70 customer at Monte Carlo and a $80 customer at
Flamingo - this June I'm going to be a $89 customer at MGM Grand, and
while the hotel rates change - my gambling budget usually remains the
same.
> Don't get me wrong, $50 is remarkably inexpensive for that property
> and I wouldn't expect to pay that rate on a regular basis (if at
> all). Those numbers you posted seem high I must admit - but if rates
> are on the upswing perhaps those numbers are a reflection of the
> increase.
>
> While I don't know what constitutes a $50 customer per se, I do
> understand the concept of value, and dismissing a customer base
> because they've been simply taking advantage of the historic rates
> seems ignorant.
>
> Two years ago during a Vegas trip I was a $140 customer at Paris, last
> year I was a $70 customer at Monte Carlo and a $80 customer at
> Flamingo - this June I'm going to be a $89 customer at MGM Grand, and
> while the hotel rates change - my gambling budget usually remains the
> same.
Well- I've stayed at Palms twice in the last two years at $50 a night.
Of course, that's in mid-December (post-NFR) when Vegas is basically
dying for customers. ;)
And generally, I read Ruffin's comments as "I don't want to chase
Circus Circus motel room customers by making my room rates extremely
low and filling the hotel 24/7/365". If he's aiming for mid-tier Strip
rates and sacrificing some occupancy, he's doing the right thing,
probably.
Rob "Fancypants" Taylor
> And generally, I read Ruffin's comments as "I don't want to chase
> Circus Circus motel room customers by making my room rates extremely
> low and filling the hotel 24/7/365". If he's aiming for mid-tier Strip
> rates and sacrificing some occupancy, he's doing the right thing,
> probably.
>
> Rob "Fancypants" Taylor
My only counter argument is that he'd be enticing people to stay at TI
at a cheap rate, therefore making a distinction between his property
and the other 3-3.5 star places.
Just to use myself as an example for convenience, there would have to
be an attractor to get me to stay at TI (cheaper than average room
rate) as I don't particularly care for the place or the location. At
the same time, I'd never consider staying at Circus Circus.
I don't know, call me crazy but I tend to think the Circus Circus
crowd is the CC crowd because they genuinely enjoy what the place has
to offer (cheap rooms, cheap gambling, cheap food, cheap daycare
etc..) In other words, I don't see Danny and Tammy and their 8 kids
rolling up to TI in the El Camino just because the room rates
dropped. Maybe I'm wrong.
> But Ruffin said he wouldn't do that (rolling eyes).
What I find humorous is the fact he said this...
"Ruffin said he will not be lowering rates to achieve as close to 100
percent capacity as possible.
“I’m not going to give rooms away. That’s a heads-in-beds philosophy,”
Ruffin said. “I don’t want the $50 customer.”
...then said this...
"Getting customers inside the hotel is not a problem, Ruffin said,
because the property’s Strip-facing pirate show gathers thousands of
passers-by, with as many as 40 percent of those people gravitating
inside.
“It’s free – and people like free,”
...in the same article.
> It's not too late for Boyd to scrap the whole Echelon concept & build
> a conventional hotel/casino.
Maybe they can call it the Stardust.
--EE--
Whereas, say, someone who wanted to be close to Fashion Show Mall, or
is trying to save some $ by not staying at Venetian/Palazzo during a
convention over at Sands would plotz over the location- plus it's more
affordable than a lot of other options in that general location
(everything but Casino Royale and maybe Harrah's).
> I don't know, call me crazy but I tend to think the Circus Circus
> crowd is the CC crowd because they genuinely enjoy what the place has
> to offer (cheap rooms, cheap gambling, cheap food, cheap daycare
> etc..) In other words, I don't see Danny and Tammy and their 8 kids
> rolling up to TI in the El Camino just because the room rates
> dropped. Maybe I'm wrong.
I tend to think bargain hunters only care about the $ when they bring
the place up on Expedia/Orbitz/Kayak. It's why you see places like
Stations have $15-25 "resort fees", and why airlines are now adding
fees for everything under the sun- so they can show up as the lowest
price on an online search. (This ignores the people with comps and
particular loyalty to a particular place.)
I know that in my case, my "loyalty" to the Palms for the last couple
of December trips isn't exactly that great- if I saw Mandalay Bay
rooms for $50 sometime in December (and cheaper than Palms), I'd
probably jump. It's more "four star room in Vegas for what I'd pay for
a Motel 6 in Seattle or almost anywhere else" when I'm looking for
rooms in Vegas in December- and realistically, the only reason why you
see those prices at that time of year is it's Vegas's dead period.
If my guess is right, in about five or ten years when TI is running
down and starting to resemble the New Frontier, THEN I would expect to
see it go all IP/Trop and start offering cheap rooms and a minimum of
anything else, and marketing to the budget traveler. Given their
location (near FSM, Wynn, Venetian/Palazzo, Mirage), it's a lead-pipe
cinch that it will be redeveloped into a snootybuckets place at some
point, and I suspect Ruffin will cash out at that point having made
another mint.
Rob "Fancypants" Taylor
> If my guess is right, in about five or ten years when TI is running
> down and starting to resemble the New Frontier, THEN I would expect to
> see it go all IP/Trop and start offering cheap rooms and a minimum of
> anything else, and marketing to the budget traveler. Given their
> location (near FSM, Wynn, Venetian/Palazzo, Mirage), it's a lead-pipe
> cinch that it will be redeveloped into a snootybuckets place at some
> point, and I suspect Ruffin will cash out at that point having made
> another mint.
You would think that a guy in his 70's with a wife in her 20's like
this former Miss Ukraine...
http://www.life.com/image/53228495
http://www.life.com/image/52829630
... wouldn't be much interested in doing mundane stuff like running a
hotel. But I guess billionaires are different from you and me.
--- Walt
>
> You would think that a guy in his 70's with a wife in her 20's like
> this former Miss Ukraine...
>
> http://www.life.com/image/53228495
>
> http://www.life.com/image/52829630
>
> ... wouldn't be much interested in doing mundane stuff like running a
> hotel. But I guess billionaires are different from you and me.
>
> --- Walt
Well, according to wikipedia, he's used to running hotels...
http://en.wikipedia.org/wiki/Phil_Ruffin
"Ruffin's Hotel Group division owns and operates 13 hotels under the
Marriott Hotels, Fairfield Inn and Courtyard by Marriott brands in
Oklahoma, Kansas, California, Texas and Alabama."
Rob "Fancypants" Taylor
> Well, according to wikipedia, he's used to running hotels...
And he was great when he was with The Temptations, and then that big solo
hit 'What Becomes Of The Broken-hearted'.
Ian
"The Ukraine girls really knock me out. They leave The West behind."
John Lennon
Kiev is one of my favorite European cities. The woman are as pretty and
well dressed as their counterparts in Moscow, but MUCH friendlier.
--flip,
Right now, what seems to be happening (as is mentioned in the article)
is Vegas is filling rooms better than a few months ago, but casino
spend and restaurant/etc. spend is down, which sort of goes against
the model you have, Cameron. (Plus any sharp gambler knows that a lot
of the Strip gambling is for suckers: 6/5 single-deck BJ, 3x4x5x craps
instead of 10x, and so on.)
========
3-4-5 craps odds are in no way comparable to 6/5 blackjack. And if those
thousandths of a percent (even with high rollers) are going to make or break
a casino, then it is operating on very thin ice--and in the middle of the
dessert at that.
This is not a direct responce to your remarks Cam, but
just some generalizations about Ruffin.
Last week I heard a long interview with him on the radio.
He knows the hotel business as he owns five other
non gaming hotels around the country, he also owns
a manufacturing company.
He said the TI Pirate show runs about $6 million
dollars a year to produce and he estimates it brings
in about 30% of his walk in business.
He also said Kirk K. of the MGM spent about
$80 million upgrading the rooms before
he bought the place.
I think the man is smart and practical. He said
with the sale proceeds of the New Frontier,
he tried putting money in the market and did
not do well.
These other places seem to micro manage
their places and as soon as they raise their
prices people will be looking elsewhere.
The TI is one of the few places I've never been in.
dr. Baf
I can see his argument, but the problem is TI is a second-tier three
plus-star Strip resort
Rob "Fancypants" Taylor
Circus Circus is a three star hotel. So, are you saying that TI is worse
than CC?
Visaman
>> I can see his argument, but the problem is TI is a second-tier three
>> plus-star Strip resort
>>
>> Rob "Fancypants" Taylor
>
> Circus Circus is a three star hotel. So, are you saying that TI is worse
> than CC?
>
> Visaman
"Three plus" > "three". :)
On Orbitz, TI is classed as a four star. I would call it three and a
half, myself. Mirage, MGM, Mandalay Bay and Caesars are more the four
star class of Strip property in my book, with TI in a lower tier with
NYNY, Monte Carlo and, say, Bally's.
Rob "Fancypants" Taylor
For you locals, what's the word, if any, around town about Mr. Ruffin's
comments? Does anyone in Las Vegas care?
Cameron
Oh, the irony. Getting a free room @ T.I. is OK, but if you're paying
$50/night, your not wanted.
I know, Phil Ruffin wants to generate more income by raising room
rates, which I can understand. However, that crack about not wanting
$50 customers was a dumb thing to say. Doesn't a guy that rich have
handlers on the payroll to advise him against saying such things?
Cameron
When Phil ran the "New" Frontier he had no problem booking cheap $25
customers--like me.
http://www.treasureislandcasino.com/
Right now ol' Phil is running a $104 special on the frontpage of his
web site with $50 free play-which ends up being $54 a night.
Hmmmmm.
Missed this. Add in "two dinner buffets, $30 food coupon, one hour of
bowling, $10 arcade card".
Hey Phil-that $50 bucks looks a whole lot better, huh?
Now what did you do with my Sigma Derby game!
I think he's having an identity crisis.
Cameron
>Well, Phil Ruffin needn't ever worry about getting my paltry $50:
>
>http://www.lasvegassun.com/news/2009/may/11/room-rates-rise-rock-bottom/
>
>That comment strikes me as snooty & somewhat arrogant.
>
>Cameron
I've been staying at TI for 5 years or so once or twice a year.
They've been ok with the comps. Just booked first week in Aug.
$79 for the weeknites and $129 for the Saturday. It's closer to the
convention center, or I'd just as soon stay at Ballys (like the craps
there)
Luca
We went over to Mirage and hooked up with a host who, after checking our
play comped us dinner and Fader tickets. Sooooooo. We're moving over on our
next trip.
TI's coffee shop is short staffed and the food quality is below par. They
even quit running the Keno game. Other we talked to expressed dismay over
the quality of the buffet as well.
CK
"Luca Brasi" <skee...@aol.com> wrote in message
news:co1s05delbo83ge2i...@4ax.com...
>Luca,
>If you haven't been to TI in a while, you'll notice some major changes
>taking effect.
>If you're used to seeing shows off property on a comp, forget about it
>unless you "drop" $40k. Those were the exact words from my HOST whom I've
>known for a couple of years. In the past we could get comp tickets to any
>MGM/Mirage show. No longer.
>
>We went over to Mirage and hooked up with a host who, after checking our
>play comped us dinner and Fader tickets. Sooooooo. We're moving over on our
>next trip.
>
>TI's coffee shop is short staffed and the food quality is below par. They
>even quit running the Keno game. Other we talked to expressed dismay over
>the quality of the buffet as well.
>CK
>
Comps are a sucker's bet.
Thumper
Apropos the interview: TI is going for $49 on some dates in 2009. Talk
about irony.
Thomas
So, let me get this straight; Phil Ruffin WANTS $49 customers?
Oh, my, I'm so confused!
Cameron