Station Casinos last week reported record-breaking third quarter revenues, which not only impressed Wall Street analysts, but helped underscore Station’s knack for tapping a thriving locals market in Las Vegas.
"Our seventh consecutive quarter of double-digit, same store revenue growth was driven by the continued strength of the Las Vegas economy," said Lorenzo J. Fertitta, vice chairman and president of Station Casinos. "We have not seen changes in consumer behavior in the Las Vegas locals market.
"All of the key metrics that influence our business were very robust during the third quarter," Fertitta continued, "including population growth, new job creation and extensive commercial and residential construction."
Indeed, those economic factors intrinsically affected Station’s third quarter revenues, which increased 16% over last year’s third quarter.
Equally important has been Station’s ability to market itself, develop new business and retain a solid and loyal customer base.
To do that, Station has developed ongoing promotions through its slot club — Station Rewards — that keep customers interested.
Perhaps the most prominent of Station’s promotions is its Jumbo Jackpot, which Bear Stearns analyst Joe Greff calls "absolutely impressive" and a major contributor to Station’s record 30% increase in EBITDA (earnings before interest, taxes, depreciation and amortization).
The recurring Jumbo Jackpot is up for grabs for slot club players at all Station properties. The pot begins at $100,000 and continues to increase until hit by a lucky slot player (with club card inserted). The random jackpot must be hit before it reaches $150,000.
Typically, the jackpot hits once or twice a month, though it can hit more frequently.
In addition to rewarding a single player with a life-altering jackpot, all Station Casino customers who are playing with their club cards when the jackpot hits win $50 in slot play.
"The last time the jackpot reached the mid-$140,000 range, we had customers vying for open machines," said a floor supervisor at Palace Station. "It was pretty much an around-the-clock thing. It was exciting and, even though only one person could win the big jackpot, most of the players were just as happy to pick up an extra 50 bucks in slot play."
Although Station wouldn’t reveal how many customers picked up an extra $50 the last time the Jumbo Jackpot hit, estimates were in the tens of thousands of club members.
"With those kind of numbers, they’re raking in millions of dollars in slot revenue," said an analyst with CIBC World Markets.
While the Jumbo Jackpot is unquestionably the centerpiece of Station’s club promotions, there are other inducements that have made Station Rewards the No. 1 slot club in the city.
For instance, regular club members are given free dinners every month, as well as free gifts. The gifts can range from the rather mundane, such as car floor mats and a pen set, to decorative kitchenware and leaded crystal.
Depending on the customer’s level of play, Station Rewards also awards hundreds of dollars a month in free slot play, as well as frequent bonus awards (typically once a week) of up to $100 in free slot play.
Slot club points are also very useful to players. Even though they can’t be recycled back into the machines as some clubs allow, Station Rewards points can be redeemed in casino restaurants and retail shops.
In addition to the popular rewards program, Station Casinos offer a range of amenities that appeal to the locals market.
Most of the casinos offer bargain-priced buffets (the Feast) and other specialty restaurants such as Guadalajara (Mexican), Pasta Palace (Italian) and Broiler (steaks and seafood). Recent innovations include more upscale eateries such as Hank’s at Green Valley Ranch Station, and Chang’s at Palace Station.
Some casinos even offer preferred, gated parking for special customers, and even a steam cleaning carwash.
"We try to provide what the local customers want," the floor supervisor said. "Our staff views the customers as their neighbors, so we probably come off as a little friendlier and more personal than some other properties.
"I think those kinds of things go along way with keeping customers satisfied."