The hottest Las Vegas trend, the sprouting of high-rise condos on the Strip, received an overwhelming endorsement from leading casino executives in the preliminary results of a survey released at last week’s G2E.
The executives also predicted that non-gaming amenities will continue to play an increasing role in generating revenue for casinos in Las Vegas, and they expect other gaming jurisdictions to follow the trend.
The annual research survey — G2E’s Future Watch Series — typically examines current and future trends in the casino industry through in-depth surveys of 19 leading casino industry executives and analysts.
The majority of those surveyed have been working in the industry for more than a decade, and many are CEOs or presidents of their respective companies.
"The survey indicates the next transformation of the casino industry won’t be on the casino floor, but in everything else the gaming entertainment industry has to offer," said Frank J. Fahrenkopf Jr., president and CEO of the American Gaming Association (AGA). "The increased diversification in amenities has turned Las Vegas into a major entertainment and shopping destination, and we’re beginning to see these same changes in other gaming communities. This survey anticipates some exciting developments in the industry across the nation."
Fully 95 percent of the executives surveyed think condos will either "definitely" (42 percent) or "probably" (53 percent) have a positive impact on the industry.
There is, however, some concern that the availability of condos and timeshares might adversely affect hotel room rates. Twenty-six percent of those surveyed expressed such a concern.
As a percentage of overall revenue, 58 percent of respondents expect the importance of non-gaming amenities to increase, with an additional 42 percent saying they expect that increase to be significant in future years.
Moreover, not a single respondent expects a decrease anytime soon. All agree that Broadway productions will become a permanent part of the Las Vegas entertainment landscape. At the same time, 90 percent indicate there always will be a place in Las Vegas for the one-person headliner.
In addition, 47 percent feel that in coming years, markets outside of Las Vegas will narrow the gap in terms of quality and diversity of amenity offerings.
Of the amenities most likely to expand outside of Las Vegas into other jurisdictions, an overwhelming 95 percent of executives expect to see full-service spas sprout in places such as Atlantic City within five to 10 years, while 53 percent predict signature restaurants, and 26 percent expect trendy nightclubs will make major appearances in other markets.
Of all the various amenities currently being offered, the majority of executives (58 percent) rank restaurants as either first or second in terms of impacting customers’ decisions about where to stay when visiting casinos.
Restaurants also lead the list in terms of their ability to generate revenue, with 68 percent of execs ranking them either first or second.
However, the survey revealed that, other than restaurants, gamers think the amenities that generate revenue for the resort are not the same as those that attract overnight visitors. Specifically, well-designed business amenities, such as ample convention space, are executives’ No. 2 revenue generator (42 percent ranked it first or second), but such amenities received not a single vote for encouraging customers to stay.
Similarly, having first-rate technology was not seen as important in generating overnight stays (11 percent), but was given more significance in generating revenue (26 percent).
While amenities are generally lauded as enhancing the casino experience, some executives believe there’s a risk to them becoming too expensive or extravagant. Fully 21 percent of respondents think this is "very much" something that casinos ought to be concerned about, while another 37 percent think that is should be "somewhat" of a concern.
Most of the concerns of executives focused on the possibility that ever-more exclusive amenties, such as high-end restaurants, spas and nightclubs, might price the traditional casino customers right out of the market.
To supplement the initial findings of the G2E Future Watch Series, the same survey was conducted among conventioneers at last week’s expo. Those results will be made available later this fall.