Vegas Gang #93 – August 9th, 2013

This time on the show:

– Our short conversation with Derek Stevens, CEO of The D and Golden Gate, on the topic of resort fees.

After our conversation, Derek emailed to make sure he had the market caps straight that he rattled off at the end of the show. The numbers may vary a little bit from his memory but the point stands – the OTAs are pretty massive.

[… and yes, I’m counting this as an episode – I want to get to 100! We’ll have another episode for August, #94]

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6 thoughts on “Vegas Gang #93 – August 9th, 2013

  1. Appreciate the interview, but one thing I’d like to point out, Caesars never claimed that resort fee was to get their rates lower on the 3rd party provided sites, and I’m not sure “the D” was showing up on page 2 of most hotel sites for lower price.

    Having said that, I don’t fault “the D” for implementing a fee. I do like that they made it a flat $20 and that they did lower most of their prices as they said they would. I also appreciate the fact that they are clear in not charging it for a comp room.

  2. Hey Jinx,

    Thanks for the comment, though I’m not totally sure I’m following the first paragraph.

    Did someone say that Caesars claimed they would lower rates? Also, do you not believe that people sort hotel results by price and thus find that rationale unbelievable?

    I feel like I’m not getting what you’re trying to say. It could be me, I’m kinda dense sometimes. Cheers.

  3. I wonder if Jinx brings up Caesars b/c Derek mentioned CZR adding a resort fee as sort of being a ‘game changer’ within the industry. But, to the above point, if Caesars added the fees at their properties, but didn’t lower the room rates, how would that hurt Derek’s hotel? His rates were still below the CZR properties. Maybe I’m off though. If anything, CZR adding resort fees simply increased the out-of-pocket expenses of customers whereas Derek claims that won’t be happening (although it absolutely will on weekend stays).

  4. Ah, so my understanding of what he was saying was that Caesars, with their resort fees, did indeed manipulate/change rates, especially midweek for some Strip hotels putting them far closer to Fremont hotels, at least in terms of the non-resort fee portion… and when customers see Strip and Fremont hotels at basically the same prices… well…

    That’s what I took away from it, though I don’t have any data to verify if that’s actually the case.

  5. That actually makes a lot more sense. Certainly, the Quad and probably Flamingo/Bally’s could appear to be priced competitively mid-week if the addition of a resort fee allowed CZR to manipulate prices, I could see that.

  6. Sorry, yes, I wasn’t clear. My point was that much of the explanation at the beginning of the interview was that the D needed to be lower on the OTA site, but in reality they weren’t very far down the list anyway, and I’d find it unlikely that they were behind most if not all strip properties.

    I do think the most crucial point of the discussion was that the OTAs don’t get any of the resort fee revenue. While the taxes are different, there is a monetary benefit to classifying these fees as resort fee. (Beyond the obvious, nightly fee).

    I also think that Derek clarifying up front that comp rooms will not be charged it is a positive. One of the things that I think was most frustrating with MGM was that there never seemed to be a consistency.

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