November 5, 2025 • 43 mins
With traffic down, gambling down, and hotel prices bottoming out, everyone’s asking: Is Las Vegas dead? Nate and Maria wade into the frenzy with some real data and hard-won experience. They talk about why casinos are struggling, what this indicates for the broader economy, and why high-end steak houses are, in fact, a recession indicator.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:15):
Pushkin. Welcome back to Risky Business, a show about making
better decisions. I'm Maria Kanakova.
Speaker 2 (00:31):
And I'm Nate Silver.
Speaker 3 (00:33):
Today in the show, we're talking about a decision that
Maria and I make frequently. In fact, Maria, of course
lives part time in Las Vegas, but that's a visiting
since city. I am about to head to Las Vegas
for my first poker tournaments and some Worldsas of poker,
Marie and I are both playing in the NAPUT North
American Poke Retur exactly. They might let some Euros, although
(00:57):
non North Americans some Brazilians not technically North America, they
might be there too, But November December, I'll be there,
hopefully running deep in some events.
Speaker 2 (01:08):
I'm little rusty. How about you? Have you been playing
much lately or not?
Speaker 1 (01:12):
No, I have not. My last poker stop was ep
TA Barcelona, so the European port Cotur. That was in
August and I haven't played since then. But the napt
obviously we do our disclaimer. I'm a Poker Stars Ambassador,
member of their Team pro. But this is an event
that is really near and dear to my heart. It's
(01:32):
their flagship in the US. And if you remember last
year at night I went incredibly deep final two tables.
I think I finished tenth or eleventh, I don't actually remember,
but it was one of those like really really frustrating
bust outs when like I don't remember how much I
cashed for, like between forty and fifty thousand, and first
place was like a million dollars and I was like, fuck,
you know, it's one of those It's one of those moments.
(01:55):
But yeah, today we'll be talking about the Vegas economy.
I'm actually already in Las Vegas. I'm recording this from
Lovely Resource World, which is where the event is taking place.
I'm in my hotel room there.
Speaker 2 (02:08):
And so why are you in an apartment?
Speaker 1 (02:11):
Because, Nate, when I have to play until very late
and we have to tape and then I have meetings
right after, I need a space that is not twenty
minutes away but actually right here.
Speaker 2 (02:23):
Nice.
Speaker 3 (02:23):
Well, one thing you might notice too, pertain to this
topic is that lately, for people who know what they're doing,
hotel rooms have gotten cheaper in Las Vegas. I was
able to stay at some places in summer for I know,
maybe fifty or seventy five dollars less a night than
I would have expected to pay.
Speaker 1 (02:43):
Hi, it's so funny night. I'm gonna interrupt you for
a second, I thought you were going to end that
sentence at for fifty or seventy five dollars.
Speaker 2 (02:49):
I'm like, whoa, whoa, whoa? Where are you like? I
say like, I say it, I stay, like where you stay?
Speaker 3 (02:54):
I say it the middle plus chier plus right, I'm
not And there are places you can stay, you know,
with comps and stuff for dollars a night, right or less.
In fact, I I was booking hotels for the World Series, right,
and I noticed that there was a lot of availability
(03:17):
at relatively low prices, and so therefore I actually took
some money out of like some small gambling related stocks
and put them in Walmart instead. I'm like, oh, it
seems like the economy is And I don't usually do
that kind of active trading thing, right, but it felt
like this is a pretty unmistakable signal that demand is weakening.
(03:37):
I know those prices well enough where like I want
in particular hotels, but you're getting two hundred and twenty
dollars a night for a luxury hotel without any comps
or discounts, and I'm like, Okay, something is going wrong
in Vegas.
Speaker 1 (03:49):
Yeah, and let's just say that there has been this
news cycle of like, is Vegas dead? And this is
a conversation that comes up every so often. Right, this
is not the first time that people have been having
this conversation, but people have been saying, you know, there
have been a lot of reports say, oh, visitations down,
this is down, this is down, Vegas is dying, Vegas
is over, blah bla bla. So that's kind of framing
(04:11):
the discussion. That's what we're going to be talking about.
Is Vegas actually you know, in a rough spot right now,
and we're going to actually be looking at the data
and using a more risky business lens as opposed to vibes.
And you know, man, the vibes just felt off night.
All right, let's get into some numbers.
Speaker 3 (04:30):
Okay, So according to the Nevada Independent, I am doing,
by the way, Nevada, let's Nevada.
Speaker 1 (04:36):
Let's get you clearnuncing it correctly.
Speaker 2 (04:38):
For Nevada Independent.
Speaker 3 (04:40):
For the Nevada Independent, I'm doing an event by the
way for them, I guess the weekend after next. I'm
a big supporter of their independent journalism. So you'll see
me there at IndieFest.
Speaker 2 (04:51):
I believe it's called.
Speaker 3 (04:52):
However, September saw the Strip record its first monthly gaming
revenue decline since May. But the nearly five point five
percent dip wasn't a surprise Las Vegas Boulevard's two largest
resort operators or shall they spin? Sorry, that last phrase
was mine. You know, a five point five five percent
drop is pretty material. The Gaming Control Board I'm now
(05:15):
cooting it again, said Wednesday that Strip game more when
you fell to six hundred and eighty seven point eight
million last month, not bad, primarily because of a forty
two point seven percent decline in high end baccarat income. Yeah,
so baccarat is a game. Have you played Brocrat?
Speaker 2 (05:29):
Ever?
Speaker 1 (05:30):
No, I've never played baccera. I know a lot about
it because, as you know, I'm working on a book
about cheating, and Baccara is a very popular game to
cheat because it is a game where the casino has
one of the lowest edges and if you are even
if you're not cheating, if you're a skilled baccara player,
it's where you can make the most money technically speaking,
(05:52):
But if you're cheating, then you know sky's the limit.
But this is the game where even though the casino
has the smallest edge, they actually make the most amount
of money because this is what the high rollers come for, right,
the big whales that come from Asia's Baca is their
game of choice. So even though the edges might be
(06:13):
smaller for the house, the total volume makes a huge
difference because when you have people betting, you know, thousands
and tons of thousands and hundreds of thousands of dollars
at hand, Shit gets real.
Speaker 3 (06:25):
No what I mean the house that just like zero
point ninety percent. Baccarat is a funny game. I actually
play in the pits and often maybe maybe maybe twice
a year, there'll be a friend when I'm out in
Biga for something else, like, oh, let's go do this,
and like, you know, you're geting a little expected value,
but you get you get drinks and helps your rewards points.
I think once or twice a year is the optimum outcome,
(06:47):
at least for me.
Speaker 2 (06:47):
Right.
Speaker 3 (06:48):
Bacarat is interesting in that there's no actual decision made
by the player. Whereas craps you roll the dice a blackcheck,
you have decisions to make right. So in principle, if
you're playing those games optimally, the house edge, depending on
the rules set, can be lower. But anytime you give
players a decision, they tend to make bad gambling bets
(07:09):
and or otherwise play non optimally. Whereas Bacarunt, it's just
you know, you slide a lot of money in and
you have a coin flip that slightly waited against you.
Speaker 2 (07:19):
But yeah, it's a.
Speaker 3 (07:20):
Game for pure gambling d Jens pretty much. However, it's
not just a high end that's being affected here again
back to Nevada Independent meanwhile, stripped that volume philt Nevada, Nevada, Nevada,
Sierra Nevada.
Speaker 2 (07:36):
It's a Sierra Nevada mountains.
Speaker 3 (07:38):
Meanwhile, visitor volume fell for the ninth street month according
to Las Vegas Convention, and this is authority declining eight
point eight percent, with justinner three point one million visitors
still a lot coming in September. Through nine months, Las
Vegas visitation is down eight percent from twenty twenty four,
which includes double digit declines in July and June, the
events that we were out there, or I was, at
(07:59):
least for.
Speaker 2 (07:59):
The World Series.
Speaker 1 (08:00):
Yeah, so last week a lot of the gaming companies
reported their quarterly earnings and they didn't.
Speaker 2 (08:09):
Do that well.
Speaker 1 (08:10):
Right, There wasn't good news, especially for Caesar's but also
for MGM, and we see them blaming a lot of things. So,
first of all, the MGM call was among the most
eyebrow raising that I've heard, and didn't listen to the
whole call, but I saw kind of some excerpts and
the transcript, and this is very rare, but the president
(08:34):
and CEO, Bill Hornbuckle, actually said shame on us. This
is a direct quote because he attributed some of their declines.
So some of it He's like, oh, yes, factors, you know,
summer was bad for everyone, all this stuff, blah blah blah.
Spirit Airlines has limited flights, which is true. Visitation is
down ate, as you just said. He said, but he
(08:56):
said that they basically lost the plot on pricing at
MGM properties, and we talked about that on the show
before when we were talking about you know, yes you
can get some room deals. But then there was kind
of an infamous thing at Aria someone posted a twenty
six dollars bottle of Fiji water. When they saw that
(09:19):
they were doing this, like you know, flexible pricing where
there were surge pricing basically at some times of day,
and your bottle of Fiji could actually cost twenty six
dollars apparently at Excalibur. I learned this from the earnings call.
I didn't know because I haven't been an Excalibur for
a while. I have been there for events, and I've
been there for what's what's it called that dinner with
like the fighting, you know, the where you with your hands,
(09:42):
whatever it's called. Anyways, I've been to Excalver for those things,
but I've never had Starbucks there. And apparently the coffee
at Starbucks was started at twelve dollars anyway, So he
said that they have now tried to price correct because
I'm quoting now quoting Hornbuckle quote, we should have been
more sensitive to the overall experience. And then he continues,
(10:06):
you can't have a twenty nine dollar room and at
twelve dollars coffee. We lost control of the narrative over
the summer. I think we would all agree to that
in hindsight. Now, in the moment people were trying to
tell them right, there was no in hindsight, like these
things were going viral. People were saying the prices on
the strip have become outrageous. Now I am a Las
(10:27):
Vegas resident. You know, I don't.
Speaker 2 (10:29):
Call a vegan.
Speaker 1 (10:30):
I'm a vegan. I'm a vegan baby spelled the same
way as vegan, except with a capital letter, which is
very confusing to me. But so as a resident, I don't,
you know, I don't feel it as much because I
don't really go to the strip for stuff. Right, I'm
on the strip when I'm playing poker, and that's it, right,
I don't. I don't actually do that much here. But
even for me, like I realized that a lot of
(10:52):
the garages have stopped offering free parking, which means that,
you know, I won't go there for dinner anymore. Usually
there's like, oh, if you're a Nevada resident, you get
like two hours free or something like that. But come on, guys, right,
that's something, but it's still kind of annoying. So there
are things that even affect locals. And I think people's
(11:13):
habits started changing and people got really mad, and there
was a segment of the population that was like, you know,
fuck you, Like I don't want to. And I think
this is crucial because sure, like you come to Vegas. Like,
you know, you're kind of a sucker when you're gambling,
but you have fun. You don't want to be treated
like a sucker. You want to be treated like a
(11:35):
human being who has a functioning mind and understands when
they're being taken advantage of. It's a horrible feeling, that
feeling of like knowing that you're being taken advantage of,
you're like, you know what, fuck you don't do that
to me.
Speaker 3 (11:48):
No, And look, if you're an experienced traveler, then there
are various things you can do. Right number one, if
you're in the I don't want to sound like a shill.
If you're in these casino comp programs, even at the
lowest tier, they typically give you lower rates. Also, my
finding is that like Vegas, hotel prices are quite spiky
(12:09):
based on conventions or the events that are held near
the major properties.
Speaker 2 (12:14):
Right.
Speaker 3 (12:14):
If there's something big Allegiance Stadium, Ortemobile Arena right, that
might affect like Mandelaid Bay prices across the bridge from
the Raiders' games, right, Or if there's a big conference
at Venetian it might be more expensive. So my recommendation
is that like you know, you price shot pretty aggressively.
Don't just have like one property or loyal to you
can usually find good deals at least some options, you know.
(12:38):
But also like, yeah, there are little hacks where like
you will notice sometimes experienced Vegas travelers the day they
get in will come in with giant twenty four packs
of water and twenty four packs of Modello beer and
snacks and whatever else, right, because the Walgreens on the
step have relatively normal prices or whatever, right, whereas in
(13:00):
the casinos it's a lot more right, they're even like
little miniacs. If you feel like just walking around, maybe
you're waiting for a poker tablet, get up and have
a drink or something. You can go to like the
little kiosks where they sell supplies, right, and those are
like a little bit cheap, and if you go to
the bar, right, but just for little supplies and stuff.
Speaker 2 (13:20):
Right.
Speaker 3 (13:20):
You know, I'm person who's definitely of means, right, but
like it's almost a matter of spite. Sure, let's say
I need some fucking like socks because I'd never be
enough socks, oh ya. And the Vegas trips always stay
longer than I thought, And I go through the socks.
Speaker 1 (13:33):
Right, you know that's really funny, Nate, I'm learning something
new about you.
Speaker 2 (13:37):
I need to get this.
Speaker 3 (13:39):
I'm just gonna go across the street to the Target
or walk Greens and buy socks because even though if
I'm like being hyper rational about like, yes, it's probably
worth it paying fucking thirty bucks for a pair of
socks in the gift shop, like it just defends.
Speaker 2 (13:50):
Me, of course on some level.
Speaker 3 (13:51):
And you know, look, the notion of Vegas is to
some extent like the easy life. Right, things are easy
and you're feeling good and casual about things, and that
might let you you spend a little bit more on
indulgences like gambling for example, or certainly you know, if
you go to like the high limit somewhere, they may
compt your drink because you're gambling big. But if not
(14:12):
the price of wine there's going to be a little
bit more expensive potentially. But like the the notion is
like kind of lower tier of like, oh, I can
have a room for fifty bucks. Yeah, if you're if
you're if you're paying every type of resort fee and
every water or beer costs a lot, you know, the
the load to middle end restaurants on the Strip are
(14:34):
are getting cycled out in favor of kind of high
end concepts.
Speaker 2 (14:40):
And things like that. Right, there are options off.
Speaker 1 (14:42):
The strip that by the way, Nate, that's another that's
another recession indicator, both in Vegas and in New York
when you see like all of these incredibly high end
steakhouses open and you're like, uh uh, you know we're
heading for a crush.
Speaker 3 (14:57):
No, but like it partly reflects like some degree of
greed where you're optimized. You know, people a lot of
people roughly speaking, have like fixed budgets for expenses. I'm
gambling it they're going to spend in Las Vegas. Right,
maybe you have one big night out that you put
in a credit card, but like, you know, I feel
like I can afford to lose five hundred bucks on
(15:17):
blackjack and maybe you know you're probably gonna lose most
of the time, or bucca ut whatever else. Right, and
you're paying like thirteen dollars for a bottle of Fiji
and then and then your dinner, you're paying you know,
New York prices plus thirty percent. Again another hack if
you know it is like the ubers are pretty cheap
in Las Vegas. If you don't have a car, go
off strip. The food can be remarkably good and remarkably cheap, right,
(15:39):
But like, but you're not creating this ease of like
I'm going to have a place to place and there's
some good deals and I'm having fun.
Speaker 2 (15:45):
Just the whole attitude seems kind of short sighted.
Speaker 1 (15:47):
It's incredibly short sighted. And I think that all of
these you know, corporations are looking to maximize revenue, right,
and they sometimes will become short sighted to do that.
And I think that for Vegas, there was a really
important inflection point during COVID, right where Vegas shut down,
(16:08):
the strip shut down, properties cut staffing by huge amounts, right,
there was no room service for a long time, but
they even cut you know, valet, they cut everything, and
all of a sudden, their profit margins were much better,
and they were like, oh, this is good, this is
actually great. And then they're like, wait, maybe we can
keep doing this. And then also during the pandemic, when
(16:30):
they were when occupancy was like really really low, they
cut rates and they saw something they didn't like. So
what happened at properties like Caesar's and this is something
you know, I was here if you remember, for about
six months when Vegas was fully reopening, to report on that,
and so I learned kind of a lot about what
(16:51):
was going on on the ground and what we saw
in places like Caesar's. And I'm quoting Caesar's because I
actually had I talked to a lot of people at
Caesar's who described this to me. By people, I mean
staff like dealers, et cetera, they had very negative experiences
because the prices had gotten so low that they were
getting a customer that they didn't want right. They were
(17:13):
getting people who were mistreating the dealers, who were not
treating hotel rooms correctly, who were causing disturbances, who weren't
tipping like it was not the experience that they wanted.
And so there were two things that happened right at
the same time. We had the staffing meaning you know,
higher margins, staffing reductions meaning higher margins. And then we
(17:35):
also had this, uh oh, like if we reduce room
prices too much, things are starting to get bad. So
what ends up happening They start raising prices on rooms
and on other things so that they can get their
quote unquote target customers. Right, we don't want the rebel rousers.
We don't want the people who are you know, who
are yelling at the dealer and throwing things. We want
(17:58):
a slightly higher caliber of clientele. And at first kind
of that that works, right, they actually get exactly what
they want, and occupancy rates are going up because people
have been cooped up during COVID, and so it's this
amazing rebound mountain because everyone wants to come and gamble
and socialize in all of these things. But crucially, they
don't staff back up. And now I'm talking about all
(18:20):
of the properties because they're like, wait, we can operate
with fewer people. And so I don't actually know if
the numbers are one hundred percent accurate here, but my
feeling is that no properties actually went back to pre
COVID staffing even today, that everyone that even as they
ramped back up, it's still not at one hundred percent
(18:41):
of what it was. I might be wrong. I'm saying
this is what I think based on kind of the
research I've done. I know that this is true at
some properties. When you say all, you know, that's that
kind of sweeping statement might be incorrect. So this is
why I'm caveating it. But in general properties have not
staffed back up to the same levels, and then what
(19:01):
ends up happening is they try to They're like, ooh,
it worked, like we have high occupancy and we raise prices.
Let's raise prices a little more. Oh, you're telling us
that we shouldn't do this, that people are feeling exploited,
but they're still coming. Well, there's a lag right, there's
a lagging effect. And this is where the short sighted
this comes in, Like people will tolerate it for a
little bit, but then you start putting prices up even more,
(19:23):
being like, oh, where's you know, maybe they're totally priced
and sensitive. Hahaha, let's do this, let's do that. And
then suddenly it's like you know, the frog and the
boiling water, right, you're raising the heat a little bit,
and all of a sudden, your customers are like, what
the hell, right, look at my room rates, look at
my water, look at my coffee, and you're not treating
(19:45):
me as well. But because you don't have I have
to wait ten minutes at the valet, because you didn't
hire back an fla like, the experience is worse too,
what the fuck? And that is an appropriate reaction. So
I think that's what we're now saying.
Speaker 2 (20:00):
And we'll be right back after this break.
Speaker 1 (20:17):
Now, you know, in terms of Vegas as a kind
of barometer for the rest of the country, because it
often is, right like when there are bubbles, when we're
about to hit a recession, like when when things are
starting to get out of hand, Vegas is often the
place where you start feeling some of those things first.
(20:37):
It's human driven, right, It's a service economy, and it's
driven by kind of trends in general in individual habits. Right,
how are people traveling, what are they spending their money on,
what are they spending discretionary income on, how are they
kind of spending their leisure time? All of these things,
Vegas will start feeling that first. And so you know,
(20:58):
at the beginning of this episode, I've kind of made
a joke about high end steakhouses being a recession indicator.
It's not really a joke, right, There are things like
that where you're like, oh, you know, too many, too
many things like we're hitting peak right and you're going
to you're gonna see that fall off soon. I remember
a number of years ago going to Miami when Miami
(21:21):
was going through this was like maybe twenty two thousand
and nine, like post recession, and like really back when
I could stay at the Satai for like two hundred
dollars a night and this is a tie by the way,
is a hotel that's like over a thousand dollars a night.
But yeah, so Miami wasn't doing well and I just
(21:41):
saw abandoned luxury construction projects everywhere, right, Like it was
just it was just a graveyard for cranes and like
these half finished high rises. That was one of my
first real world experiences where I was like, oh, right,
when you see something like this, like that was probably
a sign beforehand that there was kind of a real
(22:02):
estate bubble. So since, you know, thinking about the economy
more broadly, there are certain things that we talked about
today that are Vegas specific, but then there are other
things that I don't think are like the Vegas is
dead narrative, but more of a Hey, there are some
troubling signs right in consumer sentiment and in the way
that consumers are feeling right now in this part of
(22:24):
the economic cycle.
Speaker 3 (22:26):
Yeah, it can be a leading indicator, right of consumer optimism,
although weirdly so it's a little weird.
Speaker 2 (22:33):
It's a live by modal where like.
Speaker 3 (22:37):
You know, in general, people feel like, I have money,
look to go and spend a bunch of money on
a Vegas trip, and then also to spend money gambling, and.
Speaker 2 (22:43):
They want you to do both. Right.
Speaker 3 (22:45):
No longer true that unless you're a VIP who is
guaranteed to gamble a lot. The hotels restaurants are no
longer just a loss leader.
Speaker 2 (22:52):
Right, But.
Speaker 3 (22:54):
You have to be feeling pretty optimistic about the state
of things to say I'm gonna go and have a
big boy's weekend or girls weekend, gotchelor at weekend in Vegas, right,
especially if it develops a reputation for no longer being
a budget destination but a luxury destination. That's part of it, right,
I mean, ironically, like some sin stocks and sin activities, cigarettes, booze,
(23:16):
dambling can go up when conditions are really bad because
people feel like fuck it, fuck it, you know, the
world's coming to an end, and will blow it in Vegas.
But we're kind of in this stagnation area where there's
been a lot of consumer pessimism for a long period
of time.
Speaker 2 (23:31):
Right.
Speaker 3 (23:32):
There is from some countries declining international travel too. You know,
I think poker players or at least some people I
knew that didn't want the experience of like going in
the United States and maybe being harassed by an immigration
officer set carrying all these I guess you probably wouldn't
cary that much cash.
Speaker 1 (23:49):
Right, No, but there but the visa, the more stringent
visa requirements, how long you're supposed to stay, like having
to check in the fact that people were being detained
and sent away like it was. Yeah, it's something that
does deter people from coming.
Speaker 3 (24:03):
Yeah, and that can be like a little bit precious, Right,
But you're relying on these vtps, let's be honest, you know,
East Asian countries and in particular for the most part, right.
Speaker 1 (24:13):
Yeah, especially since baccaras you're leading revenue source.
Speaker 2 (24:16):
Right.
Speaker 1 (24:16):
The reason that the revenue growth that was seen in
Vegas over the last several months, not talking about these
reports that we were talking about there were bad but
before that we had some great growth and they were
all driven by Bacara, Right, And now we have a
bad month, and it's because Baccara is down. Like there
are certain things that you know, you you do need
(24:38):
to be you don't want friction, right, and we are
seeing things that are adding friction to the experience for
a lot of people. And I think that's true not
just to Vegas, but a visitation. You know, that's something
I think everywhere saw a decreased tourism numbers. New York
did like that, I know, but a lot of a
lot of places all over the country definitely felt.
Speaker 3 (24:59):
The companies also struggle a lot with like pricing. So
these resort fees for example, right, God, yeah, I actually
the last time I student the WIN, I had some.
Speaker 2 (25:10):
Promotion where there weren't resort fees.
Speaker 3 (25:14):
But then you go to the gym and it's like
twenty bucks to use a gym, and there's like a
psychological thing where it's like, I mean, what was a reserve?
You probably forty nine bucks? Right, Like that was the
only thing I was using. I was doing it every
other day, right, So like it's actually a good deal,
but you feel like you feel like Nicola dimd And
then you know, shifting those equilibriums away where prices seem
more it's hard because like if most people are not
(25:36):
sweating the small details, right, they have some notion that
like there's always tacked on expenses and in veguess I
know those are particularly bad, right, But like you know,
if you're listed at two hundred and ten dollars a
night on Expedia and the other property is two hundred
and fifty and they're all inclusive, and you have fifty
six dollars in fees, you're actually more expensive. But maybe
you kind of prick people a little bit when they're
(25:58):
signing up, right, I mean that's kind of one aspect
of it. This is actually a place where like legislation
could do well, right, where it's like, okay, we can
break that eyqulibrium by saying you need to have more
transparency whenever you're selling an experience, right, that there are
not add on fees that are as are a default
are tacked on for for every customer.
Speaker 2 (26:15):
I mean you have us with sports.
Speaker 3 (26:16):
Tickets and and lots of other things too, right, And
like you know, you could have that better default. There's
a such general sense of like I remember like going
like Gibson Steakhouse in Chicago, right, and the steaks are
expensive by Chicago standards. Their wine list is not particularly
marked up. There's actually some good deals on the wineless.
(26:36):
I know it's like sounds like a stupid example. There's
like there's like an old school mentality of like you
are paying a lot to have a good experience and
to get in, right, and and you're paying a lot
for the steak and we're not going to nickel and
dimee you for for other stuff, right, You're paying a
lot for the good, high quality stuff.
Speaker 2 (26:53):
Right, But like it's not you know, it's some I went.
Speaker 3 (26:56):
To Carnegie Hall the other day and there the concession
prices are like not as marked up as at other
venues because and it just di it's like like it's
a classic experience, right, and like if I went a
little prosecco at intermission, generous nack of peanuts or something, right,
I'm still paying twice as much as I should, right,
but like not four times as much. And it's just
like the constant small irritation if you never feel like
(27:20):
you're getting like tweeted you know, well, you know, hey,
look these guys.
Speaker 2 (27:24):
Give me a break.
Speaker 3 (27:25):
I'm never I could have they could have charged me more,
would have paid more, but I'm paying a lot for
the experience. It's just I don't know, I it's exactly
the kind of stuff that you think would have like
a short term spreadsheet maximizing quality to it, that that
would have effects that accumulate over two, three, five, ten years.
Speaker 2 (27:41):
Right, yep.
Speaker 1 (27:42):
I think that's I think that's absolutely right.
Speaker 3 (27:44):
Also, like all these interlocking rewards programs, on the one hand,
they can incentivize some consumers to gamble more or spend
more in the resort or whatever else. Right on the
other hand, like it can be frustrating.
Speaker 2 (27:59):
When you're in line for an.
Speaker 3 (28:02):
Overpriced brunch or something and then there's another line of
Diamond seven stars and another line and of super whatever, right,
Like that experience can be a bit frustrating. Steve win
at The Wind famously or not famously when I talk
to people for the book, right, he always thought, you
want to if you're coming to a luxury property like
the Wind, everybody should be treated like a VIP yep, Right,
(28:25):
And we understand that, like, yes, there's probably some tower
suite for the true Bacara degenerate VIP, but we don't
want too much tearing. And by the way, the Wind
is a place where like they seem to go the
extra mile for staffing.
Speaker 2 (28:38):
Not that I've never had a problem there. I stay
these places so much.
Speaker 3 (28:41):
I've had a bat experience at every Vegas retort at
some point, right, But you notice a consistently higher effort.
Speaker 2 (28:48):
From staff, and you feel like.
Speaker 3 (28:50):
Oh, yeah, this is this is a luxury that that
I'm being promised.
Speaker 1 (28:54):
Right, Yeah, there's you know, it's psychologically. I just want
to pause here for one second. It's really interesting because
there's one school of thought which is like, oh, make
everyone see, you know, the seventh star diamond line, so
that they have they aspire to it, right, Like see
that if you like pay, if you play here more,
you get to cut the line. On the other hand,
(29:16):
like if you're waiting incessantly, it's really annoying to see
people who keep on cutting you, right, and it can
it can backfire. What the Wind does is actually, yes
they have exclusive, like incredibly high roller experiences, but you
don't really see it, right, Like there are suites that
are like it's their own check it, it's their own area, like,
it's their own everything. The really nice ones that are
(29:36):
on the golf course with the outdoor space, like that's
a it's a whole different thing, right, So yeah, it's
like it's a whole different part of the resort, so
when you go there, you do feel like a VIP.
By the way, Wind Resorts their properties in Macau saw
a revenue up nineteen percent from twenty twenty three to
twenty twenty four. And it's Vegas ones also group from
(29:59):
twenty twenty three to twenty twenty four, but less so
three point seven percent. But Wind was has been showing
actually kind of more more positive results. And I think
that those counter examples, including Macaw, by the way, it's
a chink in the narrative. A lot of people are saying, oh, well,
you know Vegas is dead and dying because of all
(30:20):
of you can now sports, but from everywhere, like online gambling,
et cetera. But that's I don't I don't think that
that's actually true, because we see that McCaw revenues are
actually like up for everything, for for all properties like
people are people are gambling in person like none other.
And regional casino revenue so that you're talking about someone
el et cetera, et cetera, regional properties are actually doing
(30:40):
really really well right like those those revenues are going up.
So even within Vegas, there are very different stories of
what's happening on the strip downtown and in casinos that
are locals, casinos that are you know, just you know,
scattered throughout Las Vegas. So we see very different revenue patterns.
But I just want to say that to the first one.
(31:02):
You know, psychologically speaking, you have to be careful, Like
there's a fine line between showing people something aspirational and
making them feel like you're treating them poorly and letting
other people get in front of them and you know,
really ruining their experience, and especially if you're paying a
lot already, then you want to be treated well, you
(31:23):
want to be treated like a VIP.
Speaker 2 (31:26):
Yeah. There's basically three markets in Vegas. Right.
Speaker 3 (31:29):
There's like the locals market, which is almost entirely all
striped and like it sounds like maybe some budget travelers,
but people who were in and around Las Vegas probably
lived there.
Speaker 2 (31:39):
Right.
Speaker 3 (31:40):
There's, on the other hand, the high end luxury market,
which has you know, wasn't as much of a thing
twenty years ago. Like people like Steve Wing have a
lot of responsibility for this. Uh, you know, you can
kind of subpure that into like you know, rich domestic
people who like to gamble and have fun, but also internationally,
(32:03):
you know, if there are options and the things like
international relations.
Speaker 2 (32:06):
And how is the to get your money in and out?
Speaker 3 (32:08):
If you're gaping a lot of money and you're like
a Chinese national, i' going to have a hard time
at a border.
Speaker 2 (32:14):
Right.
Speaker 3 (32:15):
Macaw goes through cycles where China seems to be encouraging
or discouraging more money to flow through there for different
actual or rumored reasons. Right, So that's part of it.
But like kind of this middle market has gotten squeezed
a little bit, and like, you know, if a friend
were to recommend, oh, I want a nice baseline experience
(32:37):
in Vegas where I don't feel nickel and dime, and
then I might indulge in a few things, Like I'm
not sure i'd have like a great propperty to recommend
them necessarily.
Speaker 2 (32:48):
I don't know, I don't maybe, I don't know.
Speaker 1 (32:50):
Yeah, I'd probably, I mean, i'd probably steer them downtown. Honestly,
I'd probably steer them to one of the newer or
remodeled properties downtown, like a you know, like a Serco
type of place that has a really nice sportsbook, that
has new restaurants. By the way, we mentioned this few
months back, but the Rio, you know, under new leadership,
(33:14):
has actually invested in renovating and has some like hot
happening restaurants and people like for the first time, Yeah,
for the first time. The Rio is you know, it's
been a joke. You know, we're we're poker players and
the Rio has you know, always been kind of a
dump when it comes to like the World Series and
all of that. Everyone was really happy when the World
(33:36):
Series left the Rio. There was an outbreak. I remember,
I think my first or second year playing poker, when
I was just starting to you know, when I was
researching the Biggest Bluff, there was a Lesionnaire's disease outbreak
for people staying at the hotel like bad, right, bad, Yeah, robberies,
but robberies happen on strip too, like man robberies. I know,
(33:57):
people who've been robbed in their hotel rooms at properties
as nice as the Blagio, like just just to be
to be perfectly candid like that. It can happen anywhere.
But yeah, but the Rio was especially bad. But now
people I think because they were trying to turn it around.
They started trying to make people feel better, right and
give them a better experience, and a little goes a
(34:20):
long way, right if you start doing a tiered service
of room service, like MGM properties did at some point
this year, I don't think. I don't know if Bill
Hornbook specifically mentioned this in his call, I don't remember,
but this is one of those like what were you
thinking missteps where they started having tiered room service where
(34:40):
if you wanted actual like plates and silverware and like
the stuff that you normally want when you order room service,
you had to order premium room service for like an
additional I don't remember twenty thirty forty dollars, and the
basic room service just came in takeout containers, and come on,
you're already paying ridiculous amounts for this room service. Like
that would make me feel like shit, right as someone's
(35:02):
staying there, and so a little goes a long way.
Just don't do that, right, Like you're actually, over the
long term going to have higher margins. Which is all
to say that those problems, though, are easily fixable, I think.
But for your friend who's looking at middle tier properties, yeah,
that's that's why I would say, like, maybe don't even
go on strip because it's really hard to find, like
(35:24):
a good experience where you feel good and unless like
you've found good rates, like it's possible, you know sometimes midweek,
like some really nice hotels, even like the Wind will
have rates that are really nice and you're like, whoa,
I can stay at the Wind for like one hundred
and something dollars a night, yes, please, right, but like
(35:46):
absent that like your baseline rates. Yeah, it's it's really
really tough and we'll be back right after this, okay.
Speaker 3 (36:12):
I mean we mentioned the pandemic in passing. I do think,
in fact, I kind of had this thesis in my
book that there was like a lot of pent up
demand for bad quote unquote behavior and for risk taking
behavior and for socialization, like the scenes in Vegas in
(36:32):
like summer going into fall twenty twenty one. I mean,
there was one time when I, like I nearly thought
was going to get like there might have been a
crush on one of those pedestrian bridges right like Vegas
kind of swinging together back into life faster than their
places was like, it was a lot of fun for
a period of time, but things were also a little
bit a bit cheaper than right the long term trends.
Speaker 2 (36:50):
I mean, you know since the pandemic. I mean, you
know there are things like, for example, people.
Speaker 3 (36:59):
Are taking ozempic more. Yeah, that can reduce the desires to.
Speaker 1 (37:05):
Hut and drinks and gamble.
Speaker 3 (37:07):
Anyway and gamble a little bit, right there is I
would argue, like a little bit of a wave of
like prudishness. I mean, look, things are always sensitive at
the high end to like the crypto economy a little bit,
which has been good lately. Actually maybe that contradicts the trend.
But like, but you know, the preferences of like people
of means and you know, maybe that Vegas trip becomes
(37:31):
a ski trip because they're being a little bit more
health conscious or something like that, right, or maybe they
feel like you know, Vegas always struggle between do we
want to be family inclusive and gender inclusive? Or is
this for the bros? You know they struggle with that
a little bit. But you know, you know a problem
in lots of businesses is like you know, as a
(37:53):
middle aged forty something guy, right, like, you know, they're
kind of doing a good job to hold on to
those customers. But yet young people are different, The zoomers
are different. They may not be you know, first of all,
they're less sociable. In general, if you do not like
people they're in Las Vegas is not a good place, right,
and the whole mass of humanity. I mean, part of
why I like Vegas is because you get like a
(38:14):
real cross section. You do all types of contexts from
different people. I enjoy indoses the people watching in Vegas,
but like, but if you're a little bit agoraphobic, then
then that's not going to be the best experience.
Speaker 2 (38:27):
And so.
Speaker 3 (38:29):
Yeah, look, every business has to worry about about churn
or not acquiring enough new customers because a lot of
times you look at traffic to something and it's steady
and looks like all the same people are coming, right,
what's really happening into the surface is that like maybe
you have twenty percent new customers over six month period,
but twenty percent leave, right, and you tend to steady
(38:51):
state most of the time. Right, If one of those
two numbers gets off, right, and I haven't looked in
the details as much as it is, it is it
loyal customers not coming back, or my guess as it
might be more intimidating to like to new customers potentially
because if you're loyal in Vegas, then A you probably
have status, and b just this like street smart, so
like how to navigate and find the better experiences.
Speaker 2 (39:14):
And the better deals.
Speaker 3 (39:14):
Right, Like if I were your garde to Vegas, certainly,
if you were Marie, I'd be like, here are the
shows you should go to good absence, for example, here
are the restaurants should go to, most of which are
off strip yep. Here little hacks you can buy socks
and water and beer for cheaper than in the little
thing they have in the casino, right, and do these
four things and keep your points, and then that's great,
But like it's a little bit intimidating to new visitors.
Speaker 1 (39:37):
Absolutely absolutely, And if you are someone who's kind of
young and planning, you know, a fun birthday, weekend, bachelor party,
whatever it is. In the past, you might have just
default said, oh, Vegas, right, that's the best place for it,
and now you might you might actually think twice and
actually look at other look at other things. So just
(39:58):
to kind of sum up everything we've been talking about,
let's answer the micro and the macro questions. First like
is Vegas dead? And second like, is what's happening in
Vegas an indication that kind of we should be worried
about broader economic health right now.
Speaker 3 (40:19):
Like I said, I thought it was an interesting indicator
back in the spring and when consumer settlement really started
to go down, right, I think now that's more well
established across a wide brand new beta. Look, some of
it is cyclical. Vegas has always been highly cyclical, right,
this is like nothing new, And ironically Vegas a very
cyclical decisions to build these high end resorts. They might
(40:40):
take five or ten years to build and thirty years
to realize a profit.
Speaker 1 (40:42):
I got a fun time blow. It was just a
was just a absolute cursed property. The number of years
it took to finally open was just mind numbing.
Speaker 3 (40:52):
No, it's pretty hard to anticipate long term kind of
secular trends and desires for gambling and entertainment. But yeah, look,
I mean the look the younger generation is kind of
nitty and they're kind of introverted. Actually, and those epic
I think is material for some categories, like like restaurants
and booze related businesses, right like, And that's that all
(41:14):
seems like material to Vegas's bottom line and long run,
it is quite international, maybe not as much as some
American cities. But if the US becomes a less desirable destination,
I think there are some actual headwinds here.
Speaker 1 (41:30):
Yeah, I would say that there are some troubling indicators.
I don't think Vegas is dead. I don't think Vegas
is dying. I think that Vegas needs to change some
of its habits if it wants to have long term
appeal and sustainability and be able to capture that demographic
that may want to just have a nice experience. But yes,
(41:52):
they're a kind of younger generation that has different habits, right,
and different points of oh, this is what makes me
want to go somewhere and actually spend money on a trip.
By the way, you know, in the past, we've had
these like Vegas is dying, et cetera, et cetera, and
we've had amazing innovators who've reinvented Vegas, you know, like
(42:13):
Steve Wynn most recently, who you know, realized that, oh,
you know, the old way of building casinos is wrong, right,
We're actually going to like let in light and like
do all these different things and change the way that
we make people feel. And it worked, right, and it
actually people who go to Vegas today don't realize like
what a huge change that was and how much it
(42:34):
changed the face of the strip. And so maybe you know,
there's someone coming up right now who will figure out
a way to really capture a lot of this younger
demographic in the meantime, I don't, you know, I don't
think it's dying, but I do think that there are
some troubling into kators throughout the entire US ecotomy and
especially in Vegas, like you got to treat people well.
(43:04):
Let us know what you think of the show.
Speaker 2 (43:05):
Reach out to.
Speaker 1 (43:06):
Us at Risky Business at pushkin dot FM. Risky Business
is hosted by me Maria Kanakova.
Speaker 2 (43:12):
And by me Nate Silver.
Speaker 3 (43:14):
The show was a cool production of Pushing Industries and iHeartMedia.
This episode was produced by Isaac Carter. Our associate producer
is Sonya gerwit Lydia, Jean Kott and Daphney Chen are
our editors, and our executive producer is Jacob Goldstein. Mixing
by Sarah Bruger.
Speaker 1 (43:31):
If you like the show, please rate and review us
so other people can find us too, But once again,
only if you like us. We don't want those bad
reviews out there. Thanks for tuning in.
Pushkin. Welcome back to Risky Business, a show about making
better decisions. I'm Maria Kanakova.
Speaker 2 (00:31):
And I'm Nate Silver.
Speaker 3 (00:33):
Today in the show, we're talking about a decision that
Maria and I make frequently. In fact, Maria, of course
lives part time in Las Vegas, but that's a visiting
since city. I am about to head to Las Vegas
for my first poker tournaments and some Worldsas of poker,
Marie and I are both playing in the NAPUT North
American Poke Retur exactly. They might let some Euros, although
(00:57):
non North Americans some Brazilians not technically North America, they
might be there too, But November December, I'll be there,
hopefully running deep in some events.
Speaker 2 (01:08):
I'm little rusty. How about you? Have you been playing
much lately or not?
Speaker 1 (01:12):
No, I have not. My last poker stop was ep
TA Barcelona, so the European port Cotur. That was in
August and I haven't played since then. But the napt
obviously we do our disclaimer. I'm a Poker Stars Ambassador,
member of their Team pro. But this is an event
that is really near and dear to my heart. It's
(01:32):
their flagship in the US. And if you remember last
year at night I went incredibly deep final two tables.
I think I finished tenth or eleventh, I don't actually remember,
but it was one of those like really really frustrating
bust outs when like I don't remember how much I
cashed for, like between forty and fifty thousand, and first
place was like a million dollars and I was like, fuck,
you know, it's one of those It's one of those moments.
(01:55):
But yeah, today we'll be talking about the Vegas economy.
I'm actually already in Las Vegas. I'm recording this from
Lovely Resource World, which is where the event is taking place.
I'm in my hotel room there.
Speaker 2 (02:08):
And so why are you in an apartment?
Speaker 1 (02:11):
Because, Nate, when I have to play until very late
and we have to tape and then I have meetings
right after, I need a space that is not twenty
minutes away but actually right here.
Speaker 2 (02:23):
Nice.
Speaker 3 (02:23):
Well, one thing you might notice too, pertain to this
topic is that lately, for people who know what they're doing,
hotel rooms have gotten cheaper in Las Vegas. I was
able to stay at some places in summer for I know,
maybe fifty or seventy five dollars less a night than
I would have expected to pay.
Speaker 1 (02:43):
Hi, it's so funny night. I'm gonna interrupt you for
a second, I thought you were going to end that
sentence at for fifty or seventy five dollars.
Speaker 2 (02:49):
I'm like, whoa, whoa, whoa? Where are you like? I
say like, I say it, I stay, like where you stay?
Speaker 3 (02:54):
I say it the middle plus chier plus right, I'm
not And there are places you can stay, you know,
with comps and stuff for dollars a night, right or less.
In fact, I I was booking hotels for the World Series, right,
and I noticed that there was a lot of availability
(03:17):
at relatively low prices, and so therefore I actually took
some money out of like some small gambling related stocks
and put them in Walmart instead. I'm like, oh, it
seems like the economy is And I don't usually do
that kind of active trading thing, right, but it felt
like this is a pretty unmistakable signal that demand is weakening.
(03:37):
I know those prices well enough where like I want
in particular hotels, but you're getting two hundred and twenty
dollars a night for a luxury hotel without any comps
or discounts, and I'm like, Okay, something is going wrong
in Vegas.
Speaker 1 (03:49):
Yeah, and let's just say that there has been this
news cycle of like, is Vegas dead? And this is
a conversation that comes up every so often. Right, this
is not the first time that people have been having
this conversation, but people have been saying, you know, there
have been a lot of reports say, oh, visitations down,
this is down, this is down, Vegas is dying, Vegas
is over, blah bla bla. So that's kind of framing
(04:11):
the discussion. That's what we're going to be talking about.
Is Vegas actually you know, in a rough spot right now,
and we're going to actually be looking at the data
and using a more risky business lens as opposed to vibes.
And you know, man, the vibes just felt off night.
All right, let's get into some numbers.
Speaker 3 (04:30):
Okay, So according to the Nevada Independent, I am doing,
by the way, Nevada, let's Nevada.
Speaker 1 (04:36):
Let's get you clearnuncing it correctly.
Speaker 2 (04:38):
For Nevada Independent.
Speaker 3 (04:40):
For the Nevada Independent, I'm doing an event by the
way for them, I guess the weekend after next. I'm
a big supporter of their independent journalism. So you'll see
me there at IndieFest.
Speaker 2 (04:51):
I believe it's called.
Speaker 3 (04:52):
However, September saw the Strip record its first monthly gaming
revenue decline since May. But the nearly five point five
percent dip wasn't a surprise Las Vegas Boulevard's two largest
resort operators or shall they spin? Sorry, that last phrase
was mine. You know, a five point five five percent
drop is pretty material. The Gaming Control Board I'm now
(05:15):
cooting it again, said Wednesday that Strip game more when
you fell to six hundred and eighty seven point eight
million last month, not bad, primarily because of a forty
two point seven percent decline in high end baccarat income. Yeah,
so baccarat is a game. Have you played Brocrat?
Speaker 2 (05:29):
Ever?
Speaker 1 (05:30):
No, I've never played baccera. I know a lot about
it because, as you know, I'm working on a book
about cheating, and Baccara is a very popular game to
cheat because it is a game where the casino has
one of the lowest edges and if you are even
if you're not cheating, if you're a skilled baccara player,
it's where you can make the most money technically speaking,
(05:52):
But if you're cheating, then you know sky's the limit.
But this is the game where even though the casino
has the smallest edge, they actually make the most amount
of money because this is what the high rollers come for, right,
the big whales that come from Asia's Baca is their
game of choice. So even though the edges might be
(06:13):
smaller for the house, the total volume makes a huge
difference because when you have people betting, you know, thousands
and tons of thousands and hundreds of thousands of dollars
at hand, Shit gets real.
Speaker 3 (06:25):
No what I mean the house that just like zero
point ninety percent. Baccarat is a funny game. I actually
play in the pits and often maybe maybe maybe twice
a year, there'll be a friend when I'm out in
Biga for something else, like, oh, let's go do this,
and like, you know, you're geting a little expected value,
but you get you get drinks and helps your rewards points.
I think once or twice a year is the optimum outcome,
(06:47):
at least for me.
Speaker 2 (06:47):
Right.
Speaker 3 (06:48):
Bacarat is interesting in that there's no actual decision made
by the player. Whereas craps you roll the dice a blackcheck,
you have decisions to make right. So in principle, if
you're playing those games optimally, the house edge, depending on
the rules set, can be lower. But anytime you give
players a decision, they tend to make bad gambling bets
(07:09):
and or otherwise play non optimally. Whereas Bacarunt, it's just
you know, you slide a lot of money in and
you have a coin flip that slightly waited against you.
Speaker 2 (07:19):
But yeah, it's a.
Speaker 3 (07:20):
Game for pure gambling d Jens pretty much. However, it's
not just a high end that's being affected here again
back to Nevada Independent meanwhile, stripped that volume philt Nevada, Nevada, Nevada,
Sierra Nevada.
Speaker 2 (07:36):
It's a Sierra Nevada mountains.
Speaker 3 (07:38):
Meanwhile, visitor volume fell for the ninth street month according
to Las Vegas Convention, and this is authority declining eight
point eight percent, with justinner three point one million visitors
still a lot coming in September. Through nine months, Las
Vegas visitation is down eight percent from twenty twenty four,
which includes double digit declines in July and June, the
events that we were out there, or I was, at
(07:59):
least for.
Speaker 2 (07:59):
The World Series.
Speaker 1 (08:00):
Yeah, so last week a lot of the gaming companies
reported their quarterly earnings and they didn't.
Speaker 2 (08:09):
Do that well.
Speaker 1 (08:10):
Right, There wasn't good news, especially for Caesar's but also
for MGM, and we see them blaming a lot of things. So,
first of all, the MGM call was among the most
eyebrow raising that I've heard, and didn't listen to the
whole call, but I saw kind of some excerpts and
the transcript, and this is very rare, but the president
(08:34):
and CEO, Bill Hornbuckle, actually said shame on us. This
is a direct quote because he attributed some of their declines.
So some of it He's like, oh, yes, factors, you know,
summer was bad for everyone, all this stuff, blah blah blah.
Spirit Airlines has limited flights, which is true. Visitation is
down ate, as you just said. He said, but he
(08:56):
said that they basically lost the plot on pricing at
MGM properties, and we talked about that on the show
before when we were talking about you know, yes you
can get some room deals. But then there was kind
of an infamous thing at Aria someone posted a twenty
six dollars bottle of Fiji water. When they saw that
(09:19):
they were doing this, like you know, flexible pricing where
there were surge pricing basically at some times of day,
and your bottle of Fiji could actually cost twenty six
dollars apparently at Excalibur. I learned this from the earnings call.
I didn't know because I haven't been an Excalibur for
a while. I have been there for events, and I've
been there for what's what's it called that dinner with
like the fighting, you know, the where you with your hands,
(09:42):
whatever it's called. Anyways, I've been to Excalver for those things,
but I've never had Starbucks there. And apparently the coffee
at Starbucks was started at twelve dollars anyway, So he
said that they have now tried to price correct because
I'm quoting now quoting Hornbuckle quote, we should have been
more sensitive to the overall experience. And then he continues,
(10:06):
you can't have a twenty nine dollar room and at
twelve dollars coffee. We lost control of the narrative over
the summer. I think we would all agree to that
in hindsight. Now, in the moment people were trying to
tell them right, there was no in hindsight, like these
things were going viral. People were saying the prices on
the strip have become outrageous. Now I am a Las
(10:27):
Vegas resident. You know, I don't.
Speaker 2 (10:29):
Call a vegan.
Speaker 1 (10:30):
I'm a vegan. I'm a vegan baby spelled the same
way as vegan, except with a capital letter, which is
very confusing to me. But so as a resident, I don't,
you know, I don't feel it as much because I
don't really go to the strip for stuff. Right, I'm
on the strip when I'm playing poker, and that's it, right,
I don't. I don't actually do that much here. But
even for me, like I realized that a lot of
(10:52):
the garages have stopped offering free parking, which means that,
you know, I won't go there for dinner anymore. Usually
there's like, oh, if you're a Nevada resident, you get
like two hours free or something like that. But come on, guys, right,
that's something, but it's still kind of annoying. So there
are things that even affect locals. And I think people's
(11:13):
habits started changing and people got really mad, and there
was a segment of the population that was like, you know,
fuck you, Like I don't want to. And I think
this is crucial because sure, like you come to Vegas. Like,
you know, you're kind of a sucker when you're gambling,
but you have fun. You don't want to be treated
like a sucker. You want to be treated like a
(11:35):
human being who has a functioning mind and understands when
they're being taken advantage of. It's a horrible feeling, that
feeling of like knowing that you're being taken advantage of,
you're like, you know what, fuck you don't do that
to me.
Speaker 3 (11:48):
No, And look, if you're an experienced traveler, then there
are various things you can do. Right number one, if
you're in the I don't want to sound like a shill.
If you're in these casino comp programs, even at the
lowest tier, they typically give you lower rates. Also, my
finding is that like Vegas, hotel prices are quite spiky
(12:09):
based on conventions or the events that are held near
the major properties.
Speaker 2 (12:14):
Right.
Speaker 3 (12:14):
If there's something big Allegiance Stadium, Ortemobile Arena right, that
might affect like Mandelaid Bay prices across the bridge from
the Raiders' games, right, Or if there's a big conference
at Venetian it might be more expensive. So my recommendation
is that like you know, you price shot pretty aggressively.
Don't just have like one property or loyal to you
can usually find good deals at least some options, you know.
(12:38):
But also like, yeah, there are little hacks where like
you will notice sometimes experienced Vegas travelers the day they
get in will come in with giant twenty four packs
of water and twenty four packs of Modello beer and
snacks and whatever else, right, because the Walgreens on the
step have relatively normal prices or whatever, right, whereas in
(13:00):
the casinos it's a lot more right, they're even like
little miniacs. If you feel like just walking around, maybe
you're waiting for a poker tablet, get up and have
a drink or something. You can go to like the
little kiosks where they sell supplies, right, and those are
like a little bit cheap, and if you go to
the bar, right, but just for little supplies and stuff.
Speaker 2 (13:20):
Right.
Speaker 3 (13:20):
You know, I'm person who's definitely of means, right, but
like it's almost a matter of spite. Sure, let's say
I need some fucking like socks because I'd never be
enough socks, oh ya. And the Vegas trips always stay
longer than I thought, And I go through the socks.
Speaker 1 (13:33):
Right, you know that's really funny, Nate, I'm learning something
new about you.
Speaker 2 (13:37):
I need to get this.
Speaker 3 (13:39):
I'm just gonna go across the street to the Target
or walk Greens and buy socks because even though if
I'm like being hyper rational about like, yes, it's probably
worth it paying fucking thirty bucks for a pair of
socks in the gift shop, like it just defends.
Speaker 2 (13:50):
Me, of course on some level.
Speaker 3 (13:51):
And you know, look, the notion of Vegas is to
some extent like the easy life. Right, things are easy
and you're feeling good and casual about things, and that
might let you you spend a little bit more on
indulgences like gambling for example, or certainly you know, if
you go to like the high limit somewhere, they may
compt your drink because you're gambling big. But if not
(14:12):
the price of wine there's going to be a little
bit more expensive potentially. But like the the notion is
like kind of lower tier of like, oh, I can
have a room for fifty bucks. Yeah, if you're if
you're if you're paying every type of resort fee and
every water or beer costs a lot, you know, the
the load to middle end restaurants on the Strip are
(14:34):
are getting cycled out in favor of kind of high
end concepts.
Speaker 2 (14:40):
And things like that. Right, there are options off.
Speaker 1 (14:42):
The strip that by the way, Nate, that's another that's
another recession indicator, both in Vegas and in New York
when you see like all of these incredibly high end
steakhouses open and you're like, uh uh, you know we're
heading for a crush.
Speaker 3 (14:57):
No, but like it partly reflects like some degree of
greed where you're optimized. You know, people a lot of
people roughly speaking, have like fixed budgets for expenses. I'm
gambling it they're going to spend in Las Vegas. Right,
maybe you have one big night out that you put
in a credit card, but like, you know, I feel
like I can afford to lose five hundred bucks on
(15:17):
blackjack and maybe you know you're probably gonna lose most
of the time, or bucca ut whatever else. Right, and
you're paying like thirteen dollars for a bottle of Fiji
and then and then your dinner, you're paying you know,
New York prices plus thirty percent. Again another hack if
you know it is like the ubers are pretty cheap
in Las Vegas. If you don't have a car, go
off strip. The food can be remarkably good and remarkably cheap, right,
(15:39):
But like, but you're not creating this ease of like
I'm going to have a place to place and there's
some good deals and I'm having fun.
Speaker 2 (15:45):
Just the whole attitude seems kind of short sighted.
Speaker 1 (15:47):
It's incredibly short sighted. And I think that all of
these you know, corporations are looking to maximize revenue, right,
and they sometimes will become short sighted to do that.
And I think that for Vegas, there was a really
important inflection point during COVID, right where Vegas shut down,
(16:08):
the strip shut down, properties cut staffing by huge amounts, right,
there was no room service for a long time, but
they even cut you know, valet, they cut everything, and
all of a sudden, their profit margins were much better,
and they were like, oh, this is good, this is
actually great. And then they're like, wait, maybe we can
keep doing this. And then also during the pandemic, when
(16:30):
they were when occupancy was like really really low, they
cut rates and they saw something they didn't like. So
what happened at properties like Caesar's and this is something
you know, I was here if you remember, for about
six months when Vegas was fully reopening, to report on that,
and so I learned kind of a lot about what
(16:51):
was going on on the ground and what we saw
in places like Caesar's. And I'm quoting Caesar's because I
actually had I talked to a lot of people at
Caesar's who described this to me. By people, I mean
staff like dealers, et cetera, they had very negative experiences
because the prices had gotten so low that they were
getting a customer that they didn't want right. They were
(17:13):
getting people who were mistreating the dealers, who were not
treating hotel rooms correctly, who were causing disturbances, who weren't
tipping like it was not the experience that they wanted.
And so there were two things that happened right at
the same time. We had the staffing meaning you know,
higher margins, staffing reductions meaning higher margins. And then we
(17:35):
also had this, uh oh, like if we reduce room
prices too much, things are starting to get bad. So
what ends up happening They start raising prices on rooms
and on other things so that they can get their
quote unquote target customers. Right, we don't want the rebel rousers.
We don't want the people who are you know, who
are yelling at the dealer and throwing things. We want
(17:58):
a slightly higher caliber of clientele. And at first kind
of that that works, right, they actually get exactly what
they want, and occupancy rates are going up because people
have been cooped up during COVID, and so it's this
amazing rebound mountain because everyone wants to come and gamble
and socialize in all of these things. But crucially, they
don't staff back up. And now I'm talking about all
(18:20):
of the properties because they're like, wait, we can operate
with fewer people. And so I don't actually know if
the numbers are one hundred percent accurate here, but my
feeling is that no properties actually went back to pre
COVID staffing even today, that everyone that even as they
ramped back up, it's still not at one hundred percent
(18:41):
of what it was. I might be wrong. I'm saying
this is what I think based on kind of the
research I've done. I know that this is true at
some properties. When you say all, you know, that's that
kind of sweeping statement might be incorrect. So this is
why I'm caveating it. But in general properties have not
staffed back up to the same levels, and then what
(19:01):
ends up happening is they try to They're like, ooh,
it worked, like we have high occupancy and we raise prices.
Let's raise prices a little more. Oh, you're telling us
that we shouldn't do this, that people are feeling exploited,
but they're still coming. Well, there's a lag right, there's
a lagging effect. And this is where the short sighted
this comes in, Like people will tolerate it for a
little bit, but then you start putting prices up even more,
(19:23):
being like, oh, where's you know, maybe they're totally priced
and sensitive. Hahaha, let's do this, let's do that. And
then suddenly it's like you know, the frog and the
boiling water, right, you're raising the heat a little bit,
and all of a sudden, your customers are like, what
the hell, right, look at my room rates, look at
my water, look at my coffee, and you're not treating
(19:45):
me as well. But because you don't have I have
to wait ten minutes at the valet, because you didn't
hire back an fla like, the experience is worse too,
what the fuck? And that is an appropriate reaction. So
I think that's what we're now saying.
Speaker 2 (20:00):
And we'll be right back after this break.
Speaker 1 (20:17):
Now, you know, in terms of Vegas as a kind
of barometer for the rest of the country, because it
often is, right like when there are bubbles, when we're
about to hit a recession, like when when things are
starting to get out of hand, Vegas is often the
place where you start feeling some of those things first.
(20:37):
It's human driven, right, It's a service economy, and it's
driven by kind of trends in general in individual habits. Right,
how are people traveling, what are they spending their money on,
what are they spending discretionary income on, how are they
kind of spending their leisure time? All of these things,
Vegas will start feeling that first. And so you know,
(20:58):
at the beginning of this episode, I've kind of made
a joke about high end steakhouses being a recession indicator.
It's not really a joke, right, There are things like
that where you're like, oh, you know, too many, too
many things like we're hitting peak right and you're going
to you're gonna see that fall off soon. I remember
a number of years ago going to Miami when Miami
(21:21):
was going through this was like maybe twenty two thousand
and nine, like post recession, and like really back when
I could stay at the Satai for like two hundred
dollars a night and this is a tie by the way,
is a hotel that's like over a thousand dollars a night.
But yeah, so Miami wasn't doing well and I just
(21:41):
saw abandoned luxury construction projects everywhere, right, Like it was
just it was just a graveyard for cranes and like
these half finished high rises. That was one of my
first real world experiences where I was like, oh, right,
when you see something like this, like that was probably
a sign beforehand that there was kind of a real
(22:02):
estate bubble. So since, you know, thinking about the economy
more broadly, there are certain things that we talked about
today that are Vegas specific, but then there are other
things that I don't think are like the Vegas is
dead narrative, but more of a Hey, there are some
troubling signs right in consumer sentiment and in the way
that consumers are feeling right now in this part of
(22:24):
the economic cycle.
Speaker 3 (22:26):
Yeah, it can be a leading indicator, right of consumer optimism,
although weirdly so it's a little weird.
Speaker 2 (22:33):
It's a live by modal where like.
Speaker 3 (22:37):
You know, in general, people feel like, I have money,
look to go and spend a bunch of money on
a Vegas trip, and then also to spend money gambling, and.
Speaker 2 (22:43):
They want you to do both. Right.
Speaker 3 (22:45):
No longer true that unless you're a VIP who is
guaranteed to gamble a lot. The hotels restaurants are no
longer just a loss leader.
Speaker 2 (22:52):
Right, But.
Speaker 3 (22:54):
You have to be feeling pretty optimistic about the state
of things to say I'm gonna go and have a
big boy's weekend or girls weekend, gotchelor at weekend in Vegas, right,
especially if it develops a reputation for no longer being
a budget destination but a luxury destination. That's part of it, right,
I mean, ironically, like some sin stocks and sin activities, cigarettes, booze,
(23:16):
dambling can go up when conditions are really bad because
people feel like fuck it, fuck it, you know, the
world's coming to an end, and will blow it in Vegas.
But we're kind of in this stagnation area where there's
been a lot of consumer pessimism for a long period
of time.
Speaker 2 (23:31):
Right.
Speaker 3 (23:32):
There is from some countries declining international travel too. You know,
I think poker players or at least some people I
knew that didn't want the experience of like going in
the United States and maybe being harassed by an immigration
officer set carrying all these I guess you probably wouldn't
cary that much cash.
Speaker 1 (23:49):
Right, No, but there but the visa, the more stringent
visa requirements, how long you're supposed to stay, like having
to check in the fact that people were being detained
and sent away like it was. Yeah, it's something that
does deter people from coming.
Speaker 3 (24:03):
Yeah, and that can be like a little bit precious, Right,
But you're relying on these vtps, let's be honest, you know,
East Asian countries and in particular for the most part, right.
Speaker 1 (24:13):
Yeah, especially since baccaras you're leading revenue source.
Speaker 2 (24:16):
Right.
Speaker 1 (24:16):
The reason that the revenue growth that was seen in
Vegas over the last several months, not talking about these
reports that we were talking about there were bad but
before that we had some great growth and they were
all driven by Bacara, Right, And now we have a
bad month, and it's because Baccara is down. Like there
are certain things that you know, you you do need
(24:38):
to be you don't want friction, right, and we are
seeing things that are adding friction to the experience for
a lot of people. And I think that's true not
just to Vegas, but a visitation. You know, that's something
I think everywhere saw a decreased tourism numbers. New York
did like that, I know, but a lot of a
lot of places all over the country definitely felt.
Speaker 3 (24:59):
The companies also struggle a lot with like pricing. So
these resort fees for example, right, God, yeah, I actually
the last time I student the WIN, I had some.
Speaker 2 (25:10):
Promotion where there weren't resort fees.
Speaker 3 (25:14):
But then you go to the gym and it's like
twenty bucks to use a gym, and there's like a
psychological thing where it's like, I mean, what was a reserve?
You probably forty nine bucks? Right, Like that was the
only thing I was using. I was doing it every
other day, right, So like it's actually a good deal,
but you feel like you feel like Nicola dimd And
then you know, shifting those equilibriums away where prices seem
more it's hard because like if most people are not
(25:36):
sweating the small details, right, they have some notion that
like there's always tacked on expenses and in veguess I
know those are particularly bad, right, But like you know,
if you're listed at two hundred and ten dollars a
night on Expedia and the other property is two hundred
and fifty and they're all inclusive, and you have fifty
six dollars in fees, you're actually more expensive. But maybe
you kind of prick people a little bit when they're
(25:58):
signing up, right, I mean that's kind of one aspect
of it. This is actually a place where like legislation
could do well, right, where it's like, okay, we can
break that eyqulibrium by saying you need to have more
transparency whenever you're selling an experience, right, that there are
not add on fees that are as are a default
are tacked on for for every customer.
Speaker 2 (26:15):
I mean you have us with sports.
Speaker 3 (26:16):
Tickets and and lots of other things too, right, And
like you know, you could have that better default. There's
a such general sense of like I remember like going
like Gibson Steakhouse in Chicago, right, and the steaks are
expensive by Chicago standards. Their wine list is not particularly
marked up. There's actually some good deals on the wineless.
(26:36):
I know it's like sounds like a stupid example. There's
like there's like an old school mentality of like you
are paying a lot to have a good experience and
to get in, right, and and you're paying a lot
for the steak and we're not going to nickel and
dimee you for for other stuff, right, You're paying a
lot for the good, high quality stuff.
Speaker 2 (26:53):
Right, But like it's not you know, it's some I went.
Speaker 3 (26:56):
To Carnegie Hall the other day and there the concession
prices are like not as marked up as at other
venues because and it just di it's like like it's
a classic experience, right, and like if I went a
little prosecco at intermission, generous nack of peanuts or something, right,
I'm still paying twice as much as I should, right,
but like not four times as much. And it's just
like the constant small irritation if you never feel like
(27:20):
you're getting like tweeted you know, well, you know, hey,
look these guys.
Speaker 2 (27:24):
Give me a break.
Speaker 3 (27:25):
I'm never I could have they could have charged me more,
would have paid more, but I'm paying a lot for
the experience. It's just I don't know, I it's exactly
the kind of stuff that you think would have like
a short term spreadsheet maximizing quality to it, that that
would have effects that accumulate over two, three, five, ten years.
Speaker 2 (27:41):
Right, yep.
Speaker 1 (27:42):
I think that's I think that's absolutely right.
Speaker 3 (27:44):
Also, like all these interlocking rewards programs, on the one hand,
they can incentivize some consumers to gamble more or spend
more in the resort or whatever else. Right on the
other hand, like it can be frustrating.
Speaker 2 (27:59):
When you're in line for an.
Speaker 3 (28:02):
Overpriced brunch or something and then there's another line of
Diamond seven stars and another line and of super whatever, right,
Like that experience can be a bit frustrating. Steve win
at The Wind famously or not famously when I talk
to people for the book, right, he always thought, you
want to if you're coming to a luxury property like
the Wind, everybody should be treated like a VIP yep, Right,
(28:25):
And we understand that, like, yes, there's probably some tower
suite for the true Bacara degenerate VIP, but we don't
want too much tearing. And by the way, the Wind
is a place where like they seem to go the
extra mile for staffing.
Speaker 2 (28:38):
Not that I've never had a problem there. I stay
these places so much.
Speaker 3 (28:41):
I've had a bat experience at every Vegas retort at
some point, right, But you notice a consistently higher effort.
Speaker 2 (28:48):
From staff, and you feel like.
Speaker 3 (28:50):
Oh, yeah, this is this is a luxury that that
I'm being promised.
Speaker 1 (28:54):
Right, Yeah, there's you know, it's psychologically. I just want
to pause here for one second. It's really interesting because
there's one school of thought which is like, oh, make
everyone see, you know, the seventh star diamond line, so
that they have they aspire to it, right, Like see
that if you like pay, if you play here more,
you get to cut the line. On the other hand,
(29:16):
like if you're waiting incessantly, it's really annoying to see
people who keep on cutting you, right, and it can
it can backfire. What the Wind does is actually, yes
they have exclusive, like incredibly high roller experiences, but you
don't really see it, right, Like there are suites that
are like it's their own check it, it's their own area, like,
it's their own everything. The really nice ones that are
(29:36):
on the golf course with the outdoor space, like that's
a it's a whole different thing, right, So yeah, it's
like it's a whole different part of the resort, so
when you go there, you do feel like a VIP.
By the way, Wind Resorts their properties in Macau saw
a revenue up nineteen percent from twenty twenty three to
twenty twenty four. And it's Vegas ones also group from
(29:59):
twenty twenty three to twenty twenty four, but less so
three point seven percent. But Wind was has been showing
actually kind of more more positive results. And I think
that those counter examples, including Macaw, by the way, it's
a chink in the narrative. A lot of people are saying, oh, well,
you know Vegas is dead and dying because of all
(30:20):
of you can now sports, but from everywhere, like online gambling,
et cetera. But that's I don't I don't think that
that's actually true, because we see that McCaw revenues are
actually like up for everything, for for all properties like
people are people are gambling in person like none other.
And regional casino revenue so that you're talking about someone
el et cetera, et cetera, regional properties are actually doing
(30:40):
really really well right like those those revenues are going up.
So even within Vegas, there are very different stories of
what's happening on the strip downtown and in casinos that
are locals, casinos that are you know, just you know,
scattered throughout Las Vegas. So we see very different revenue patterns.
But I just want to say that to the first one.
(31:02):
You know, psychologically speaking, you have to be careful, Like
there's a fine line between showing people something aspirational and
making them feel like you're treating them poorly and letting
other people get in front of them and you know,
really ruining their experience, and especially if you're paying a
lot already, then you want to be treated well, you
(31:23):
want to be treated like a VIP.
Speaker 2 (31:26):
Yeah. There's basically three markets in Vegas. Right.
Speaker 3 (31:29):
There's like the locals market, which is almost entirely all
striped and like it sounds like maybe some budget travelers,
but people who were in and around Las Vegas probably
lived there.
Speaker 2 (31:39):
Right.
Speaker 3 (31:40):
There's, on the other hand, the high end luxury market,
which has you know, wasn't as much of a thing
twenty years ago. Like people like Steve Wing have a
lot of responsibility for this. Uh, you know, you can
kind of subpure that into like you know, rich domestic
people who like to gamble and have fun, but also internationally,
(32:03):
you know, if there are options and the things like
international relations.
Speaker 2 (32:06):
And how is the to get your money in and out?
Speaker 3 (32:08):
If you're gaping a lot of money and you're like
a Chinese national, i' going to have a hard time
at a border.
Speaker 2 (32:14):
Right.
Speaker 3 (32:15):
Macaw goes through cycles where China seems to be encouraging
or discouraging more money to flow through there for different
actual or rumored reasons. Right, So that's part of it.
But like kind of this middle market has gotten squeezed
a little bit, and like, you know, if a friend
were to recommend, oh, I want a nice baseline experience
(32:37):
in Vegas where I don't feel nickel and dime, and
then I might indulge in a few things, Like I'm
not sure i'd have like a great propperty to recommend
them necessarily.
Speaker 2 (32:48):
I don't know, I don't maybe, I don't know.
Speaker 1 (32:50):
Yeah, I'd probably, I mean, i'd probably steer them downtown. Honestly,
I'd probably steer them to one of the newer or
remodeled properties downtown, like a you know, like a Serco
type of place that has a really nice sportsbook, that
has new restaurants. By the way, we mentioned this few
months back, but the Rio, you know, under new leadership,
(33:14):
has actually invested in renovating and has some like hot
happening restaurants and people like for the first time, Yeah,
for the first time. The Rio is you know, it's
been a joke. You know, we're we're poker players and
the Rio has you know, always been kind of a
dump when it comes to like the World Series and
all of that. Everyone was really happy when the World
(33:36):
Series left the Rio. There was an outbreak. I remember,
I think my first or second year playing poker, when
I was just starting to you know, when I was
researching the Biggest Bluff, there was a Lesionnaire's disease outbreak
for people staying at the hotel like bad, right, bad, Yeah, robberies,
but robberies happen on strip too, like man robberies. I know,
(33:57):
people who've been robbed in their hotel rooms at properties
as nice as the Blagio, like just just to be
to be perfectly candid like that. It can happen anywhere.
But yeah, but the Rio was especially bad. But now
people I think because they were trying to turn it around.
They started trying to make people feel better, right and
give them a better experience, and a little goes a
(34:20):
long way, right if you start doing a tiered service
of room service, like MGM properties did at some point
this year, I don't think. I don't know if Bill
Hornbook specifically mentioned this in his call, I don't remember,
but this is one of those like what were you
thinking missteps where they started having tiered room service where
(34:40):
if you wanted actual like plates and silverware and like
the stuff that you normally want when you order room service,
you had to order premium room service for like an
additional I don't remember twenty thirty forty dollars, and the
basic room service just came in takeout containers, and come on,
you're already paying ridiculous amounts for this room service. Like
that would make me feel like shit, right as someone's
(35:02):
staying there, and so a little goes a long way.
Just don't do that, right, Like you're actually, over the
long term going to have higher margins. Which is all
to say that those problems, though, are easily fixable, I think.
But for your friend who's looking at middle tier properties, yeah,
that's that's why I would say, like, maybe don't even
go on strip because it's really hard to find, like
(35:24):
a good experience where you feel good and unless like
you've found good rates, like it's possible, you know sometimes midweek,
like some really nice hotels, even like the Wind will
have rates that are really nice and you're like, whoa,
I can stay at the Wind for like one hundred
and something dollars a night, yes, please, right, but like
(35:46):
absent that like your baseline rates. Yeah, it's it's really
really tough and we'll be back right after this, okay.
Speaker 3 (36:12):
I mean we mentioned the pandemic in passing. I do think,
in fact, I kind of had this thesis in my
book that there was like a lot of pent up
demand for bad quote unquote behavior and for risk taking
behavior and for socialization, like the scenes in Vegas in
(36:32):
like summer going into fall twenty twenty one. I mean,
there was one time when I, like I nearly thought
was going to get like there might have been a
crush on one of those pedestrian bridges right like Vegas
kind of swinging together back into life faster than their
places was like, it was a lot of fun for
a period of time, but things were also a little
bit a bit cheaper than right the long term trends.
Speaker 2 (36:50):
I mean, you know since the pandemic. I mean, you
know there are things like, for example, people.
Speaker 3 (36:59):
Are taking ozempic more. Yeah, that can reduce the desires to.
Speaker 1 (37:05):
Hut and drinks and gamble.
Speaker 3 (37:07):
Anyway and gamble a little bit, right there is I
would argue, like a little bit of a wave of
like prudishness. I mean, look, things are always sensitive at
the high end to like the crypto economy a little bit,
which has been good lately. Actually maybe that contradicts the trend.
But like, but you know, the preferences of like people
of means and you know, maybe that Vegas trip becomes
(37:31):
a ski trip because they're being a little bit more
health conscious or something like that, right, or maybe they
feel like you know, Vegas always struggle between do we
want to be family inclusive and gender inclusive? Or is
this for the bros? You know they struggle with that
a little bit. But you know, you know a problem
in lots of businesses is like you know, as a
(37:53):
middle aged forty something guy, right, like, you know, they're
kind of doing a good job to hold on to
those customers. But yet young people are different, The zoomers
are different. They may not be you know, first of all,
they're less sociable. In general, if you do not like
people they're in Las Vegas is not a good place, right,
and the whole mass of humanity. I mean, part of
why I like Vegas is because you get like a
(38:14):
real cross section. You do all types of contexts from
different people. I enjoy indoses the people watching in Vegas,
but like, but if you're a little bit agoraphobic, then
then that's not going to be the best experience.
Speaker 2 (38:27):
And so.
Speaker 3 (38:29):
Yeah, look, every business has to worry about about churn
or not acquiring enough new customers because a lot of
times you look at traffic to something and it's steady
and looks like all the same people are coming, right,
what's really happening into the surface is that like maybe
you have twenty percent new customers over six month period,
but twenty percent leave, right, and you tend to steady
(38:51):
state most of the time. Right, If one of those
two numbers gets off, right, and I haven't looked in
the details as much as it is, it is it
loyal customers not coming back, or my guess as it
might be more intimidating to like to new customers potentially
because if you're loyal in Vegas, then A you probably
have status, and b just this like street smart, so
like how to navigate and find the better experiences.
Speaker 2 (39:14):
And the better deals.
Speaker 3 (39:14):
Right, Like if I were your garde to Vegas, certainly,
if you were Marie, I'd be like, here are the
shows you should go to good absence, for example, here
are the restaurants should go to, most of which are
off strip yep. Here little hacks you can buy socks
and water and beer for cheaper than in the little
thing they have in the casino, right, and do these
four things and keep your points, and then that's great,
But like it's a little bit intimidating to new visitors.
Speaker 1 (39:37):
Absolutely absolutely, And if you are someone who's kind of
young and planning, you know, a fun birthday, weekend, bachelor party,
whatever it is. In the past, you might have just
default said, oh, Vegas, right, that's the best place for it,
and now you might you might actually think twice and
actually look at other look at other things. So just
(39:58):
to kind of sum up everything we've been talking about,
let's answer the micro and the macro questions. First like
is Vegas dead? And second like, is what's happening in
Vegas an indication that kind of we should be worried
about broader economic health right now.
Speaker 3 (40:19):
Like I said, I thought it was an interesting indicator
back in the spring and when consumer settlement really started
to go down, right, I think now that's more well
established across a wide brand new beta. Look, some of
it is cyclical. Vegas has always been highly cyclical, right,
this is like nothing new, And ironically Vegas a very
cyclical decisions to build these high end resorts. They might
(40:40):
take five or ten years to build and thirty years
to realize a profit.
Speaker 1 (40:42):
I got a fun time blow. It was just a
was just a absolute cursed property. The number of years
it took to finally open was just mind numbing.
Speaker 3 (40:52):
No, it's pretty hard to anticipate long term kind of
secular trends and desires for gambling and entertainment. But yeah, look,
I mean the look the younger generation is kind of
nitty and they're kind of introverted. Actually, and those epic
I think is material for some categories, like like restaurants
and booze related businesses, right like, And that's that all
(41:14):
seems like material to Vegas's bottom line and long run,
it is quite international, maybe not as much as some
American cities. But if the US becomes a less desirable destination,
I think there are some actual headwinds here.
Speaker 1 (41:30):
Yeah, I would say that there are some troubling indicators.
I don't think Vegas is dead. I don't think Vegas
is dying. I think that Vegas needs to change some
of its habits if it wants to have long term
appeal and sustainability and be able to capture that demographic
that may want to just have a nice experience. But yes,
(41:52):
they're a kind of younger generation that has different habits, right,
and different points of oh, this is what makes me
want to go somewhere and actually spend money on a trip.
By the way, you know, in the past, we've had
these like Vegas is dying, et cetera, et cetera, and
we've had amazing innovators who've reinvented Vegas, you know, like
(42:13):
Steve Wynn most recently, who you know, realized that, oh,
you know, the old way of building casinos is wrong, right,
We're actually going to like let in light and like
do all these different things and change the way that
we make people feel. And it worked, right, and it
actually people who go to Vegas today don't realize like
what a huge change that was and how much it
(42:34):
changed the face of the strip. And so maybe you know,
there's someone coming up right now who will figure out
a way to really capture a lot of this younger
demographic in the meantime, I don't, you know, I don't
think it's dying, but I do think that there are
some troubling into kators throughout the entire US ecotomy and
especially in Vegas, like you got to treat people well.
(43:04):
Let us know what you think of the show.
Speaker 2 (43:05):
Reach out to.
Speaker 1 (43:06):
Us at Risky Business at pushkin dot FM. Risky Business
is hosted by me Maria Kanakova.
Speaker 2 (43:12):
And by me Nate Silver.
Speaker 3 (43:14):
The show was a cool production of Pushing Industries and iHeartMedia.
This episode was produced by Isaac Carter. Our associate producer
is Sonya gerwit Lydia, Jean Kott and Daphney Chen are
our editors, and our executive producer is Jacob Goldstein. Mixing
by Sarah Bruger.
Speaker 1 (43:31):
If you like the show, please rate and review us
so other people can find us too, But once again,
only if you like us. We don't want those bad
reviews out there. Thanks for tuning in.
Hosts And Creators
Maria Konnikova
Nate Silver
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