More options, younger demo bring in bucks
Has Las Vegas gotten its groove back?
The gaming and entertainment mecca, which went through something of an identity crisis before the recession knocked it for a loop at the end of the last decade, has gained back a good bit of traction over the past several months
Visitor volume and gambling revs are growing again. Hotel occupancy, which had fallen to a generational low of 81%, has crept up each of the past five months, as have prices for tickets for shows like Garth Brooks’ Wynn Las Vegas stand — hiked by $100 earlier this year due to increased demand.
Celine Dion’s return to the Colosseum at Caesars Palace has generated strong interest. Caesars president Gary Selesner says that ticket sales for Dion’s stand have been about 25% ahead of what the venue had moved before the opening of her previous show, “A New Day,” while receipts so far have hit the $10 million mark for the first set of shows that kicked off March 15 and end April 17.
Still, Vegas is finding that a move toward a greater array of entertainment options, including individual events, nightclub acts and non-personality-driven entertainment — and away from expensive, long-running shows dominated by big-name talent — is proving lucrative.
For instance, Caesar’s also has been offering a less traditional spectacle, “Absinthe,” an adults-only show produced by Speigelworld, which has been delivering its 19th-century take on the traveling vaudeville/burlesque tradition to auds from New York to Miami to Australia.
“We’re looking to provide entertainment for people who want something other than the standard casino experience,” says Selesner, who positions the risque show inside the Spiegeltent as “anti-Cirque.”
Newer types of entertainment have proven eminently marketable, given the hype over DJ-focused rooms like the Sugar Factory and Chateau at the Paris and the Bond at the Cosmopolitan (the latter hotel being one of the largest new openings of the past several years).
“In the big picture, there’s been a shift in attendance toward a younger demographic, and that has a lot to do with the increased popularity of celebrity hosts and DJ culture,” says Stephen Brown, director of the Vegas-based Center for Business and Economic Research. “Cirque has seven shows running, the Blue Man Group has a broad appeal and Crazy Girls is still there for the frat boys, but the money seems to be in the nightclub scene — which explains the number of celebrities paid simply to make appearances.”
That concept is far from new: Former heavyweight boxing champ Joe Louis was paid a considerable sums to lend his presence to Caesar’s Palace as a greeter nearly a half-century ago, with similar marquee names following suit until Hall of Famers Willie Mays and Mickey Mantle were handed hefty fines by Major League Baseball for associating with the “unsavory” clientele of late-’70s Vegas.
In recent years, the booking of celebrity appearances has expanded as rapidly as the definition of celebrity itself. Paris Hilton became the first non-performer to crack the six-figure mark for merely lending her presence to a party, opening the door for a slew of next-generation reality show personalities like Kim Kardashian (whose presence demands somewhere in the neighborhood of $50,000) and Jersey Shore’s cast members (that show’s Pauly D recently scored a regular DJ gig at the Palms).
“There’s a real effort to target a younger crowd, especially those who’ve just turned 21 and are new to Las Vegas-styled experiences,” says Brown. “At one point, the thought was that younger consumers didn’t have as much disposable income, but with parental contributions, it turns out that they have a considerable amount.”
The prevailing wisdom is that they’re more impulsive in spending it. While cover charges are generally much lower for a DJ night at a venue like Lax or Pure than a standard show, one former Wynn exec notes that it’s not uncommon to up the prices of seating in, or proximity to, the VIP area where a particularly hot celeb is holding court. Bottle service is also boosted in the atmosphere.
“If your outlay is $50,000, but you bring in another 500 people spending $200-$300 apiece, the arrangement makes perfect sense,” says the insider, who declined to be identified. “With this scenario, the perception is that anything can happen; anyone might show up. A younger audience prefers something more interactive than just sitting and watching a show.”
Expanding a brand through youth celebrity culture doesn’t always pan out, of course — as borne out by the woes of the Hard Rock, which offset some of its recession-caused deficit through the Tru-TV reality series “Rehab: Party at the Hard Rock Hotel.” The cash flow proved short lived when the show was canceled in the wake of a lawsuit filed by Hard Rock against the hotel’s operators — who licensed the name from Hard Rock Intl.
Over at the Cosmopolitan, diversification has turned out to be part of a winning formula. The hotel has three separate, concurrently running stages — including an outdoor pool deck that employs a Jumbotron to bring high-end suites into the viewing experience.
“More than a specific demographic, I like to say that we’re targeting ‘the curious class,’ ” says Lisa Marchese, senior VP of brand marketing at the Cosmopolitan. “We look at this as an experience for people who share a perspective — people who are looking for new experiences, rather than experiences where they already know what to expect.”
To that end, the Cosmopolitan — which launched on New Year’s Eve with a perf by unlikely allies Coldplay and Jay-Z — is concentrating on individual events, rather than long-running traditional shows. In addition to a musical roster that includes recent Grammy telecast faves Mumford & Sons and Swedish diva Robyn, the property has expanded its menu to include a Friday night fight event that Marchese describes as “a mash-up between a boxing card and a club night.” The program is televised on ESPN 2.
“The increased variety of offerings is helping draw more people back to Las Vegas,” says Brown, who foresees a 3%-4% increase in tourist revenue for 2011. “And while there’s certainly been a move away from the family atmosphere to some degree, there’s a greater mix of choices right now than there has been in a long while — and that indicates to me that there’s a light at the end of the tunnel.”