We recently learned that Orlando had a record-breaking 75 million tourists visiting the area in 2018. This is an increase of 4.2 percent from 2017, solidifying Orlando as the top tourist destination in America. While there is a lot to crow about what’s going right in Central Florida, today we want to focus on a city that seems to be losing their grip on tourism dollars: Las Vegas.
According to the Las Vegas Convention and Visitors Authority, total tourism numbers in the city actually peaked in 2016. Since then, visitor numbers continue to fall year after year. While the drop isn’t substantial (less than half a million per year), the fact that there is a drop at all is telling.
In a time where the economy is doing well and tourism numbers are up at other major tourist destinations like New York City, the Las Vegas visitor decline can be puzzling. However, many have seen this coming for several years.
Back in 2015, resorts along the Las Vegas strip systematically began charging for both valet and self-parking. One of the benefits of driving up and down the strip (prior to the fees) was being able to park or valet at any of the major hotels. Guests could pop in and see a show, grab a drink and plop some money into a few one-arm bandits.
Now, if you want to visit most of the hotels along the strip “resort hopping” via car is no longer an option. You’ll pay anywhere from $10 to $20 just to park your car for a few hours. If you’re staying overnight, expect to fork over up to $30 a night depending on the resort.
Even gift shops are starting to use surge pricing. Yes, according to reports the 24/7 sundries shop in the Excalibur hotel has no prices on items like aspirin, sunscreen, and sodas. Instead, prices are updated daily in the register that reflects the occupancy rates at the hotel. You won’t find prices on any items in the shop, instead, you find out when you ring them up. We aren’t kidding.
This trend isn’t anything new, as Vegas phased out the cheap food, drink and hotel stays decades ago. Instead, resorts started to brand themselves as premium destinations with exclusive food, drinks and shows. The idea was to bring in higher-income guests while leaving out lower-income folks entirely.
This can be seen in a multitude of ways. Anything from the exorbitant rising resort fees guests have to pay at any hotel along the strip to even having to pay for a glass of tap water at some restaurants. The idea to squeak out as much profit as possible, even at the point of price-gouging, is slowly backfiring.
Back in March 2019, we ran a story discussing the restructuring of Cirque du Soleil out in Las Vegas. It included layoffs of several top executives and word on the street that numbers are down at their anchor shows on the strip.
As it turns out, this was the tip of the iceberg. A month later, employees at MGM Resorts in Las Vegas received the above letter. As of the day it was distributed, 254 positions were eliminated. It also stated that within the next few weeks, more positions will be eliminated and they have.
This isn’t to say that Vegas isn’t investing in order to drive future growth. Both the MGM properties as well as the Wynn hotel are plotting major expansions. However, the reality is they seem to be in denial about how the perception of price-gouging has hurt the image of the Las Vegas Strip.
If there is any good news to come of this, the Wynn resort has recently reversed their parking fee rule. It is the first of any casino who started charging a parking fee to eliminate it entirely over the last few years. Could other major players step up and do the same? Time will tell.
Vegas has had many identity crises over the years and has managed to successfully reinvent or rebrand its image every time. The question is, will they realize that they can’t cater exclusively to affluent players and reduce the price-gouging that seems to be running rampant within recent years? We shall see. Your thoughts?
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