Harrah’s, post merger

Jun 28, 2005 3:06 AM

 

With its acquisition of Caesars Entertainment completed, Harrah’s is turning its attention to what it intends do with the largest gaming company in the world.

Although company officials haven’t committed to definitive plans, there’s no question that expanding its preferred customer program is near the top of the list.

With the addition of four new properties on the Las Vegas Strip (Caesars Palace, Bally’s, Paris and the Flamingo), Harrah’s Chairman and CEO Gary Loveman expects to ultimately boost membership in the company’s Total Rewards program.

"Getting the next group is harder and ever harder," Loveman told the Associated Press. "So the growth rate will slow as we’re reaching the boundaries of people who are active gamers and not already a member of the program. But, nonetheless, we’ll do things to ensure growth."

With 40 million members, Harrah’s Total Rewards program is the industry’s largest and most successful. The program allows players to earn credits that can be redeemed for comps at Harrah’s casinos nationwide. In addition to comps, benefits include priority service (no waiting) at restaurants, shows and hotel front desks.

The four newly-acquired resorts join Harrah’s on the Strip and the Rio just two blocks west of the Strip on Flamingo Road.

Loveman said that internal polls suggest that thousands of Harrah’s loyalists often stayed at non-Harrah’s properties when they came to Las Vegas.

"We missed them for two basic reasons," Loveman said. "The first was we didn’t have something luxurious enough to suit them, so Caesars would speak to that. Caesars was the most popular place for Harrah’s customers not staying at Harrah’s."

The second reason, Loveman continued, was that some customers simply couldn’t afford to stay at the Rio or Harrah’s. That’s where Bally’s and the Flamingo came in — both offer relatively inexpensive rooms on the Strip.

Speaking of Bally’s, Loveman said that changes at the venerable resort are high on Harrah’s priority list. Two options include a name change and/or renovation, from the ground up.

"We wouldn’t do one without the other," he said. "Whether it’s renovation or complete renewal, I don’t know yet. Something significant will happen to Bally’s."

Las Vegas is just a slice — albeit a juicy one — of Harrah’s new pie. The company now operates more than 40 casinos in 12 states and three countries.

Loveman said there will be property enhancements and rebranding (using the "Caesars" and "Horseshoe" brand acquired last year) at the company’s Atlantic City casinos as well as others throughout the country.

Although the merger left Harrah’s as the world’s largest gambling company with nearly 100,000 employees and $8.75 billion in revenues, the company still trails MGM Mirage in number of Las Vegas resorts (11 hotel/casinos) on the Strip.

"I think that being the best at something is always more important than being the biggest at something," Loveman said. "Being the biggest for the sake of being the biggest is not something we aspire to."