Casinos Reporting Consumer Spending is Down
Though the worst part of the recession appears to be in the rearview mirror, it turns out that Americans visiting casinos aren’t quite as profligate about their spending as they were before the bottom went out of the economy more than five years ago.
In a new report published by the Las Vegas Review-Journal, a panel group of five casino heads that convened this week from around the nation are all describing a similar problem – while customers are coming through the doors, they are keeping a much closer eye on their wallets.
Panel highlighted troubles facing industry
At this week’s Global Gaming Expo (G2E), a major industry conference sponsored by the powerful American Gaming Association (AGA), industry leaders from casinos around the United States echoed a similar sentiment: in order to grow their businesses, it is necessary to look beyond their gambling offerings.
According to Anthony Sanfilippo, who is CEO of Pinnacle Entertainment, the operator of casinos in Missouri, Mississippi, Iowa, and Indiana, “Our customers are not just gamers. Customers want a quality experience in the food and beverage, hotel and entertainment offerings.”
One reason that casinos need to be more competitive in terms of providing guests a rich experience that goes beyond the gaming floor is the fact that the market is, in many states, over-saturated. This is a predicament that is unlikely to improve as states around the nation, among them Massachusetts and Pennsylvania, are looking to expand land-based casino gambling in order to attract more tourists and more revenue.
Many casino visitors want more than just gambling
In recent years, casino companies have grown to recognize that diversification is key to not only retaining existing patrons, but also to drawing in new ones who might be interested in something other than the poker room or the blackjack tables.
Proof that not everyone who visits a gambling mecca – or even just a low-key, small town casino – is there to place wagers, can be seen simply by driving around the Las Vegas Strip, where a number of high-profile projects that have very little to do with gambling are currently in the works.
Nearing completion right now is the massive High Roller, a 550-foot Ferris wheel currently rising tall from the Nevada desert. Similar in design to London’s Eye, the finished ride is expected to have 28 dangling passenger cars, giving riders a bird’s eye view of the Strip and the mountains beyond.
Also in the works is a new zip line attraction at the Rio, which will transport brave souls between two towers with a drop of some 30 stories before taking riders back to their original starting point. That project, called the VooDoo Skyline, is only the first of three new zip line rides that are planned for the city.
While of course casinos in Las Vegas, and everywhere else, still rely on gamblers for the bulk of their revenue, the ancillary retail, dining, nightclubs, and other entertainments on offer are capable of luring in customers and taking their dollars, a reality that is not lost on casino operators.
Online gambling may also pose a threat to land-based business
Finding ways to capitalize on non-gambling customers is a new imperative for casinos, particularly as online poker and other regulated online gambling begins to take hold in the United States, says Virginia McDowell, CEO of Isle of Capri Casinos.
The challenge for us right now is the consumer. The consumer is still skittish and trying to protect their pocketbook. We have to figure out how to be profitable when people aren’t spending as much,” McDowell said.
