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With economic woes hitting every corner of our country, the gambling and tourism industries are no exceptions. Two widely known Las Vegas hotel and casino resorts, The Venetian and Palazzo, both owned by the Las Vegas Sands Corp., have found a new way to try and cut costs in departments and raise revenue.
In a conference call with Wall Street analysts on Feb. 3, Sands chairman and CEO Sheldon Adelson, reportedly announced, "We've essentially cut all of our comps except our most highly-rated players. No more comped rooms. No food and beverage. No showroom credits. We're selling rooms. We see it's resulting in a substantial increase in cash income."
The days when being a gold or platinum players club member would secure you a room or a few show tickets have all but disappeared at The Venetian and Palazzo. This has turned into a $30 million jump in cash flow from the fourth quarter of 2010.
With everyone feeling the pain of the down economy, one could see this change of policy as a business trying to do anything it can to maintain profits and keep its doors open. Unfortunately, while the Venetian and Palazzo have done this, they also have burned quite a few of their gamblers in the process.
The Sands began calling customers with reserved comped rooms to inform them, sometimes with little notice, that the free rooms were being revoked. According to The Palazzo's and Venetian's Facebook pages, guests started speaking out against the Sands' decision in the beginning of February. A response from the properties' social media marketing personnel was slow in coming but did appear on March 2:
Thank you for your continued support of The Venetian and Palazzo. As you are aware Las Vegas was hard hit by the economic recession and continues to be impacted by its lingering effects. With this in mind, we conducted a thorough review of our comp policy and have subsequently made changes to it. We appreciate your understanding and continued loyalty and we look forward to seeing you at The Venetian and Palazzo in the very near future.
Players have taken to Facebook, creating a page to urge people to boycott the properties.
Other establishments in Vegas have noticed the uproar, and in some cases, are offering these players deals with rates and other specials to entice them into spending their money with them, instead. According to the administrator of BoycottPalazzo on Facebook, Bellagio is offering disgruntled Sands customers half-off room rates, and after ensuring the guests are gambling, will provide further discounts and comps. And, Myra Lynn Alicea, regional director for Caesars Entertainment, posted on The Palazzo's Facebook page that her company stood ready to offer players the treatment they are used to.
If there's one lesson everyone can take from this is that social media has given power to consumers to not only vent frustrations but also to band together, and if not effect change then at least to discover other opportunities. It's a valuable realization for businesses, as well.
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