Jan Jones Q&A: "Recession-Proof" Las Vegas and the Recession
Las Vegas, previously thought recession-proof by many, is now facing declining occupancy and tourism. Jan Jones, vice president of communications and government relations for Harrah's Entertainment, the Las Vegas-based parent company of Caesar's Palace, Bally's, Paris and the Rio, reveals more.
BNET: With visitor volume and hotel occupancy down 4.3 and 2.4 percent respectively from August 2007, there has been a lot of controversy within the hospitality industry about dropping rates on hotel rooms to attract tourists. Has that affected business at Harrah's?
Jan Jones: Well, our room rates are still holding around 90 percent average daily room rate . . . although our occupancy has dropped. There has been a downward pressure on room rates, but it's not as much of an issue at the high-end properties, or even the low-end, budget properties. It's all the properties in the middle -- and everyone's moving towards bottom.
BNET: Conventions are the lifeblood of the hospitality industry. How has the convention business changed?
JJ: Fingers crossed, but our convention activity was slightly up over last year. . . . Marketing still has to take place but it has to be cost-efficient and venue-efficient, so we're doing a lot more online advertising and directing to our Web site.
BNET: What is Harrah's doing to attract visitors?JJ: Harrah's started an integrated loyalty program, Total Rewards. But there are more activities in Las Vegas now than just gambling -- like spas, shopping and dining that appeal to younger visitors. So we also expanded the program to include Total Rewards Nongaming because people wanted the entertainment component.
BNET: With airline tickets so high, many hotels are finding they have to take up the slack in a traveler's budget. How is Harrah's handling this?
JJ: Customers are paying around 30 percent more for plane tickets and looking how to manage a vacation on the same amount of money. So if that means taking a cheaper room or package, then that's what they are going to do.
People are still coming to Las Vegas, but now it's on a budget. They have a comfort level with [pre-priced packages] because they know what it's going to cost and they know it's paying for their room, food and a round of golf. As a consequence of customers sticking to a budget, hotels and resorts are responding by offering these "bundled" packages with amenities built in the room price. It's a smart way to do business.
Photo courtesy of Harrah's International