Panel: Casino marketing in future to focus on nongaming attractions

By Liz Benston (contact)

Friday, June 24, 2005 | 10:55 a.m.

Future casinos -- from major Las Vegas properties to smaller casinos and riverboats -- will eventually be marketed as resorts with plenty of nongaming amenities such as gourmet restaurants and spas, a group of designers and casino bosses predicted at a Las Vegas conference Thursday.

The Casino Design conference at Wynn Las Vegas runs through today and is sponsored by the American Gaming Association, which represents the commercial casino industry.

As casinos spread nationwide, attractions that have little to do with gambling are becoming more of a deciding factor for potential customers, said Jim Domoracki, senior vice president of hospitality for Pinnacle Entertainment Inc.

"It used to be, 'build the boat, they will come,"' he said. "The hospitality package has advanced."

Surveys of surrounding residents conducted for Harrah's Rincon near San Diego concluded that customers have come to expect that they will have a choice of good restaurants, said Suzanne Duffy, marketing services manager at the tribal resort.

"It's what our guests assume we are going to offer them," she said.

Nongambling amenities end up boosting casino profits by attracting bigger spenders, conference panelists said.

In spite of all the other attractions at Wynn Las Vegas, the property's casino revenue is still roughly half of the total, resort officials said.

Wynn Las Vegas executives said their resort has an escapist quality that gives customers many reasons to visit besides gambling.

Several water features, which range from a light show to a waterfall and a lake, are intended for paying hotel guests and are hidden from passerby on the Strip by a mountain that's more than 100 feet high, executives said.

By contrast, the Bellagio's dancing water fountains are primarily intended for tourists strolling Las Vegas Boulevard rather than the people sitting at the resort's cafi and restaurant overlooking the lake, said Wynn Las Vegas President Marc Schorr, who ran Steve Wynn's Mirage and Treasure Island before they were sold to MGM Grand.

Wynn Las Vegas' expensive outlets aren't for the average Vegas tourist looking for a bite to eat, a quick drink and maybe some free entertainment.

Some features were designed around VIP guests to create "a small hotel within a very huge complex," said DeRuyter Butler, executive vice president of architecture for Wynn Resorts Ltd.'s design subsidiary.

A separate tower of more than 300 suites features a private lobby that is accessible from its own valet entrance a short distance away. The lobby leads to private entrances to high-limit baccarat and slot areas as well as a VIP pool deck with views of the public pool area below. Several restaurants and boutiques also are clustered nearby so suite guests don't have to venture very far into the 5 million square-foot property, he said.

One nongaming attraction at Wynn Las Vegas is generating a surprising number of customers.

The Ferrari-Maserati dealership -- strategically located next to the parking garage -- has sold 56 cars since the resort's April debut and is now the nation's top-selling Ferrari dealer, Schorr said.

Schorr, a Ferrari owner and enthusiast, said he initiated the dealership when he suggested to Wynn that "there were probably more people interested in seeing Ferraris than paintings."

Others also relayed success stories.

The Tropicana resort in Atlantic City, sandwiched between the New Jersey shore and a major thoroughfare behind the property, spent several years trying to figure out how to build a major retail mall at the site.

The Quarter, a Havana-themed indoor mall resembling some of Las Vegas' resort shopping districts, opened atop a hotel tower last year featuring 200,000 square feet of retail, restaurants and entertainment venues.

Profit has so far beat Wall Street expectations and buoyed the stock price for Tropicana parent Aztar Corp.

The Quarter is generating sales of about $1,000 per square foot, roughly three times that of a top-performing retail mall, said Michael Rubin, a Philadelphia-based designer whose firm is involved in creating another multi-level retail center for the upcoming Cosmopolitan Resort and Casino on the Strip.

Predictions for the Quarter "were dire" because an upscale shopping center of that size had never been attempted in Atlantic City, Rubin said.

Last year the Forum Shops at Caesars Palace -- widely regarded as the nation's most profitable retail center -- generated sales of $1,400 per square foot.

Some properties are working out kinks.

Harrah's Rincon offers nongambling amenities such as an indoor-outdoor pool and bar area to appeal to younger customers.

But the tribal casino also experimented with a dance club, showing edgy music videos and inviting sponsors such as Hawaiian Tropic and Maxim magazine to attract a younger audience in their 20s. Harrah's ended up tweaking it to appeal to older customers in their 30s and 40s with more disposable income, Duffy said.

"We weren't seeing the gaming revenues," she said of the younger crowd.

Some casinos haven't mastered the art of catering to different numbers and types of customers who visit their properties over a 24-hour period, Domoracki said.

Many casinos leave their buffets open too long, sacrificing quality for expediency, he said.

"Every one of your food and beverage outlets can be a profit center if you design it that way," he said.