Fremont St. a Mecca for low rollers

May 23, 2006 3:38 AM

 

A few weeks ago, in a story about how the Las Vegas Strip is pricing itself out of the budget-tourists’ market, a New York Times headline begged the question: Whatever happened to cheap shrimp cocktails?

Of course, the answer is clear and simple: They’re alive and well and swimming in cocktail sauce in downtown Las Vegas.

But perhaps the more poignant question should have been: How large has the gap grown between downtown and the Strip, and what can the downtown operators do about it?

Over the last few years, the Strip has targeted high-end customers with upscale amenities such as flat-panel TVs, fancy shower soaps, Kobe rib-eye steaks, and $150-a-seat production shows like Cirque du Soleil’s "O."

The campaign to redefine itself has been fueled by an influx of deep-pocketed tourists, and convention-going business travelers who don’t flinch at high, mid-week room costs.

And the trend should continue as new developments come on line: MGM’s $7 billion Project CityCenter on the site of the old Boardwalk; Boyd’s $4 billion Echelon Place on land now occupied by the Stardust; the upscale Palazzo, under construction next to its sister property, the Venetian; and Steve Wynn’s bookend boutique hotel, Encore, which recently broke ground next to Wynn Las Vegas.

Moreover, aging Strip hotels such as the Tropicana and Riviera have become "antiquated," according to Blake Cumbers, Boyd’s vice president of development, and will eventually be replaced by "sensual, chic and sophisticated" properties that will attract even more upscale travelers.

"There is plenty of money out there," Cumbers said.

As the Strip heralds itself as a diversified destination with superb amenities, the cost of staying on the Strip has increased dramatically in recent years.

Last year, the average cost of a one night’s stay on the Strip was $125.38, a 23 percent increase from two years ago.

Other costs have increased as well. The average expenditure on food in 2005 was $248.40, a 19 percent increase from 2003; shopping costs increased 40 percent from $97.25 in 2003 to $136.60 last year; and the average gambling budget increased 27.6 percent from $490.87 in 2003 to $626.50 in 2005.

Note that these are just averages. Actual costs at say, Wynn Las Vegas, might easily run $300 a night for a room and $68 for a breakfast for two.

The bottom line for budget travelers, who many believe actually helped build Las Vegas, is not encouraging.

"The budget customer is eventually going to get squeezed out" of the Strip," said Jane Pedreira, a casino industry analyst with Lehman Brothers, who added that downtown hotels with their $60 a night rooms and 99¡ shrimp cocktails should be positioning themselves as the Mecca for bargain seekers.

Indeed, downtown has remained a relatively inexpensive destination for travelers, although downtown advocates seem intent on pushing "redevelopment" as the area’s savior.

"The mayor and others who claim they have downtown’s interest at heart are always promoting something — a downtown convention center, a downtown sports stadium, a downtown entertainment district," said a Fremont Street casino manager who asked that her name be withheld. "All these lofty projects have price tags in the hundreds of millions, which no one is willing to spend on downtown.

"More importantly," she continued, " The downtown hotel owners should do a better job of promoting themselves and what they have to offer the middle-market tourists."

The current "revitalization project" for downtown involves building new hotel casinos, offices and condominiums on the Union Park site.

Like proposals before it — a new hospital or sports stadium, for example — there has been little interest shown by existing casino companies and developers in general.

"Remember when Barrick announced their grandiose proposals to upgrade the properties it bought from Jackie Gaughan?" said the Fremont Street manager. "Nothing came of those plans — no new hotels, no Hispanic casino, nothing.

"The problem here is we have several different operators who are interested in only optimizing their own casino profits, but want little do with their neighbors," she said. "The Fremont Street Experience was supposed to be a consortium, but it’s only a metal canopy. If the downtown operators can ever sit still long enough to market themselves collectively, we might have something here."

Whether or not downtown needs a "hook" in the form of a stadium, entertainment district or international furniture marketplace, is up for debate.

But the people who visit downtown regularly point out what they would like to make their trips more palatable:

”¡ Parking: It has become too difficult. It’s inconvenient to always park in a five-story garage and with all the costs and parking meters it’s too expensive. The popularity of places like Palace Station, Gold Coast and The Orleans is enhanced by the open and easy parking lots.

”¡ Fremont Street Experience: The biggest complaint is the lack of benches. Even without the overhead light show, the "walking mall" section of Fremont Street should have areas in which visitors and can sit and relax.

”¡ More small shops and boutiques: Downtown used to be a joy to explore, with its Indian shops, funky used jewelry stores and the like. Unfortunately, many of these shops have been driven out by higher costs and lack of support. The city should have gone out of its way to lure more of these shops into downtown, including a proposed pinball museum and store that would have become a major tourist attraction.