Giving Away Vegas To Get Traffic in Vegas (WYNN, LVS, MGM)

If you have ever stayed at the Wynn resort or the even newer Encore in Las Vegas, you will know that calling either a high-end resort and casino destination may represent an understatement of the year.  Wynn Resorts Ltd. (NASDAQ: WYNN) has not been immune to the woes of Las Vegas despite the stock more than doubling from recent lows.  Las Vegas Sands Corp. (NYSE: LVS) is also in this boat along with every other casino operator.  But if you are one of the 90.8% of the employed and are one of the privileged consumers who has escaped the recession without much damage, the summer deals in Vegas are almost too good to be true. There are similar deals being offered by the Las Vegas Sands Corp. (NYSE: LVS) and by MGM Mirage (NYSE: MGM).  If you are unencumbered by the economy, Vegas is almost free right now.

I keep receiving offers for summer rates from Wynn (and competitors) that sound too good to be true.  Yet they are real and the giveaways actually don’t have an endless number of asterisks behind them at the Wynn or Encore resorts.  Some nights can be had for $109.00 per night, particularly if you can travel and stay there during the week.  And to top it off, some guests are getting a $50 resort credit and in some cases are getting gambling credits for multi-night stays.

Just to show how cheap this is, a couple that my wife and I enjoy traveling with are heading there at the end of this month.  A four-night stay at the new Encore and inclusive of the airfare is barely over $1,000.00.  Plus the giveaways are included.  The price for this in good times is normally twice that amount, or more.  Some of the weekend rates are even only $159.00.  While not having stayed at the Encore, I can only speculate about the comparison to the ‘old’ Wynn.  But after staying at the Wynn when the Encore was under construction, it feels like a riskless statement to say that this is far superior to any $109/night hotels.  In normal times, the rates are twice or thrice that rate.

MGM Mirage’s (NYSE: MGM) Bellagio and The Venetian from Las Vegas Sands (NYSE: LVS) offer deals that also have room rates that start or get close that $109, although there are more date and price fluctuations in the promotions we have seen there.

The casinos and Vegas have also suffered now that corporations have been bashed by politicians for having “plush getaways” for key personnel or for rainmakers in the companies.  So now it seems that the major casinos are willing to almost give away the nights and somewhat even on the airfares to get people to show up.  The obvious hope here is that when you get there you will buy more than a hamburger and one beer, and the hopes are that you’ll gamble at least some or a bit more than you would have planned on.

You could always argue that the rates are so cheap because the summer heat is so high.  I have been so hot there that I felt like a satellite was magnifying and reflecting direct rays of sunlight to vaporize unsuspecting people in the heat.  But in good times, that city was packed with travelers.

The casinos have been able to win over the decades because travelers typically spend more than they budgeted for in Vegas.  The only risk is that people will take the dirt cheap rates and will only go do the free or cheap things.  That isn’t the norm, but we are not in normal times as the economy is weak and so many of the employed are now helping to support the army of unemployed.  Maybe there is a risk that too many people with mullet haircuts will flood the city, but last time anyone checked their money spends the same as the money from anyone else.

The new slogan for Vegas to replace “What Happens in Vegas, Stays in Vegas” might become “Giving Away Vegas To Save Vegas.”

Jon C. Ogg
June 18, 2009