Station reinforcing Fiesta against Summerlin rivals

David Strow

Tuesday, Sept. 4, 2001 | 10:55 a.m.

Under the Maloof family, the Fiesta hotel-casino built its reputation among local gamblers as one of the loosest casinos in the Las Vegas Valley. It rode that reputation to become one of the most popular of Las Vegas's "local" casinos.

When Station Casinos Inc. bought the Fiesta in January 2001 for $185 million, that reputation, at least in the eyes of many local players, changed.

Long-time managers left and gamblers felt many loose video poker machines vanished at the property, just as the new Suncoast hotel-casino near Summerlin began gaining in popularity among western Las Vegas residents.

"They didn't slice up the Fiesta as much as the Santa Fe or the Reserve (two other local casinos acquired by Station recently), but it was a pretty serious devaluation of opportunities (for gamblers)," said Anthony Curtis, publisher of the Las Vegas Advisor newsletter. "Any time there's a little change, these people (local gamblers) are very fickle. They'll fly off the handle, get crazy and leave. All of a sudden, they don't feel at home anymore."

Now, the Rancho Road property is trying to return to its roots. In July, John James, senior director of operations at the Fiesta under the Maloofs, returned to the Fiesta as general manager.

James denies there's been a systematic tightening of the slots at the Fiesta. "We've actually always been loose. It's just a perception (that the property has tightened)," James said.

But James is also launching an aggressive program designed to win back the former Fiesta faithful: Slot club point giveaways, free football picking contests, giveaways of Fiesta jackets, single-deck blackjack, penny slots and attractive video poker payout tables. At Roxy's pizzeria, football fans will be able to watch this season's NFL games on a pair of 20-foot-by-20-foot televisions. The new efforts will be promoted in a "huge advertising campaign," James said.

"The Fiesta is going to be fun, value-oriented, (with) super-loose slots," James said. "The format is very similar to when we were here originally with George (Maloof, the property's former president), but we've added extra things to flavor it up more."

And that strategy, James believes, will be enough to bring business back, even from customers that now frequent the Suncoast.

"Players here are very sharp," James said. "They understand what pay tables are, they understand we have looser games here now. Certainly we'll be strong contenders for the local business. We're not afraid to compete, and we will compete."

The impact of the bumpy change-over to Station, combined with tough competition from the Suncoast, has taken a financial toll on Station. In its second quarter, the company reported disappointing earnings, and blamed them in part on below-expected results at the Fiesta. (Station does not report results by individual properties.)

"Some of the cultural changes of integrating the Fiesta into our company have been more difficult than I would have liked," Frank Fertitta III, chief executive of Station, said in July.

"It clearly hasn't performed as well as the Santa Fe, but it's a relatively recent acquisition," said Brian Egger, gaming analyst with CS First Boston. "Not every acquisition get integrated and performs optimally immediately out of the gate."

Curtis believes James is the right executive to turn the situation around. After leaving the Fiesta in January, James headed to the bankrupt Regent Las Vegas and served as chief operating officer.

"He took it (the Regent) from a nothing venue ... to the best video poker house in Vegas," Curtis said. "What James did over at the Regent was extraordinary. He's an action man. I believe everything he says. They loosened the floors, put good (pay) schedules in (on video poker machines), and I think it'll be all right."

But while some customers will come back, Curtis believes it will be tough to woo back many Summerlin-area customers that now frequent the Suncoast.

"I think Suncoast is too good ... they did everything right there," Curtis said. "A lot of have made a good 8- to 9-month investment in the Suncoast (with slot club cards), and it'll be hard to get them out of there.

"(The Fiesta) probably will never reach that level of visitation again from that area (Summerlin). I don't care if it's Bellagio North with Fiesta prices. Why should they go there, when they have something that good in their back yard?"