Experts differ on value of time shares to casinos

By Liz Benston (contact)

Thursday, May 6, 2004 | 10:55 a.m.

Time share customers may boost Las Vegas' tourist economy but actually do little to increase profit for major casinos, a gaming executive told a group of time share sales agents and vendors Wednesday.

"I don't think (casinos) see time share customers as the holy grail," said Jeff Yamaguchi, vice president of operations for The Residences at MGM Grand, a condominium-hotel complex begining construction this summer.

That's in part because time share customers tend to spend less time on the casino floor and elsewhere in the casino than typical leisure travelers and also tend to travel on a fixed budget, he said.

Yamaguchi addressed attendees at the American Resort Development Association's annual convention, the largest trade show for the time share industry. The convention runs through today at Mandalay Bay.

That view contradicts that of major time share companies that have developed a slew of upscale projects in Las Vegas in recent years.

Casinos and time shares "are a winning combination, not a crapshoot," Bobby Horowitz, vice president of marketing for Consolidated Resorts Inc., said at the conference.

The company owns a couple of time share resorts in Las Vegas and is developing a third, Tahiti Village, along Las Vegas Boulevard South.

Many time shares in Las Vegas are sold through independent sales representatives stationed at casinos. They also tend to have marketing alliances with casinos that want business from time share customers, he said. Companies such as Consolidated Resorts use perks to entice time share customers such as tickets to shows, he added.

For one particular casino, Consolidated Resorts staff promoted a slot play program that was so successful that the casino ordered the time share company stop advertising the program after just a day, he said. The casino didn't have the staff to process the number of time share customers who had signed up, he said.

Time share owners "are shuttled to (casinos) every hour, on the hour," he said. "We're bringing them to the front doorstep."

They generally have more disposable income to spend in Las Vegas because they already own their residence, he said.

Yamaguchi said time shares still look appealing for casinos that need to fill rooms.

"They can build it in advance as opposed to chasing higher room rates," he said.

When casinos such as MGM Grand start charging more than $400 a night for a room, a $1,500 buy-in for a time share visit "starts to make a tremendous amount of sense," he said.

Time share buyers also have some favorable characteristics, such as longer stays in town, greater loyalty to particular casinos and higher spending patterns than business or group travelers, he said.

Yamaguchi and other experts in attendance said they could foresee a day when time share complexes will offer their own major casinos. Even Las Vegas time shares typically don't offer attached casinos but instead are located near resorts.

"It's not a negative for MGM Grand to share that customer. In fact, we almost see it as a primer" for a return visit to a Strip casino, he said.

The explosive growth of time shares in Las Vegas hasn't necessarily led to a flood of complaints over time share purchases.

Shirley Penzel, who oversees time share registrations for the state's Real Estate Division, told the conference that her agency has received "few complaints that are legitimate" in recent years.

"We have a lot of buyers' remorse," she said. Once buyers have passed the five-day deadline for exiting their contract, "there's not much we can do."

The state-mandated disclosure statement for time share purchases is detailed but clear, she added.

"We spend a lot of time preparing disclosure statements but we can't force people to read them," she said.

Even so, Penzel and other state regulators in attendance warned that consumers nationwide are still getting scammed by companies that claim to be able to resell time share units for an up-front fee. Fly-by-night enterprises are taking the money and disappearing, sometimes across town and other times to another state. Most are able to escape prosecution that way, regulators say.

"They're faster than we are and their primary purpose in life is to scam people," Penzel said.