Gaming:

M Resort dares to be different

Casino creator hopes to carve out a niche in recession by getting right what struggling giants got wrong

Steve Marcus

With an emphasis on customer service, employees receive training Thursday at the M Resort in Henderson. The hotel, set to open Sunday at St. Rose Parkway and Las Vegas Boulevard South, is more intimate than its counterparts at about 400 rooms, and value and patron experience are its focuses.

By Liz Benston (contact)

Wednesday, Feb. 25, 2009 | 2 a.m.

Tiffany Brown

Developer Anthony Marnell III learned much about of what he knows about the casino industry from his father, who built the Mirage, Treasure Island, Bellagio and Wynn Las Vegas.

M Resort

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Anthony Marnell III talks about how his "business plan has remained unchanged."
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Marnell talks about sticking to core values to make it through rough economic times.
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Marnell talks about getting back into the business.
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Marnell on collaborating with his father on the project.
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Marnell describes the interior of the M Resort.
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M Resort next in line for Marnell family (2-21-2009)
Studio buffet highlights M Resort dining options (1-29-2009)
M Resort to include nine restaurants (1-21-2009)
M Resort licensing gets OK from gaming board (1-7-2009)
M Resort asks for 11.5 more acres (10-20-2008)
Up in the sky, a (moving) sign of suddenly desperate times (10-7-2008)
M Resort to hire close to 2,000 (9-2-2008)
It’s on Las Vegas Boulevard, but M Resort aims mostly at locals (8-11-2008)

M Resort

M Resort will open to the public at 10 p.m. Sunday. For more information, call 877-M RESORT or visit themresort.com.

Built on a hill with a dramatic view of the Las Vegas Valley, the M Resort features a television studio for live cooking shows, an on-site pharmacy, a rooftop restaurant, the world’s largest mother of pearl ceiling and a modern design of inlaid wood and cantilevered glass.

But eye candy won’t sustain the $1 billion M Resort, which started construction two years ago when Las Vegas was booming and opens Sunday on the southeast corner of St. Rose Parkway and Las Vegas Boulevard South amid a recession with no end in sight.

While competitors grew into corporate giants by taking on billions in debt and building luxurious properties, Anthony Marnell III was taking notes on the dark side of the spending spree.

He saw hotels with automated methods of communicating with customers. He saw gambler swipe cards, points programs and loyalty club kiosks proliferate. He saw rising customer service complaints. He saw gamblers upset by reduced-odds table games and slot machines. He saw outrage over $15 martinis and $90 steak dinners.

His resort, he said, would be different.

Instead of a giant hotel, Marnell would build fewer than 1,000 rooms – about 400, in fact.

His company would be private, with one banker rather than a convoluted financing scheme with multiple loans and hundreds of lenders — all the better for resolving disputes and working through economic challenges.

He would screen potential employees for friendly personalities and put them through weeks of training. He would remind them to interact with customers in a way that’s required but rarely done at many casinos. Dealers must smile and greet potential players. Customers walking through the casino can expect a hello, or, if they look lost, a “May I help you?”

He would own and manage the resort’s restaurants and bars rather than outsourcing them to third parties, as many properties have done over the years to cut costs or gain specialized expertise. He would create value-oriented menus rather than letting third-party operators set prices based on their profit margins rather than the casino’s. He would offer free meals and drinks at any of his venues to any deserving gambler — loyalty card points be damned.

And there won’t be a $15 martini or a $90 steak anywhere in sight.

These aren’t new ideas. They are as old as Las Vegas. So old, in fact, that they’ve become myth.

In reality, few casino owners know the names of their customers, even their regulars. Many don’t spend much time walking their floors, chatting up employees and customers. They rarely hear and address complaints firsthand.

When the economy was booming, managers didn’t have to try as hard to win over customers. Eye candy — a new nightclub, show or restaurant — was enough.

Good customer service is harder for big casinos to pull off, especially with companies cutting payroll and other expenses, Marnell said.

Customer service and value have become critical in the downturn. These concepts, Marnell said, will be key to the M Resort’s survival.

“The casino owner’s ego is always talking about ‘mine’s bigger, better and newer and you haven’t seen it before,’ ” Marnell said. “People don’t care about all this bigger and better stuff. They come here with their hard-earned money — and every day they realize how hard-earned it is — and they’re going to spend it where they’re going to get value. They want to know that they are going be taken care of, and that you’re going to treat them like they want to be treated.”

With growing companies forced to streamline customer relations, most gamblers these days don’t get an audience with the owner or even the general manager, Marnell said. They enter a pin number in a kiosk that tells them whether they have racked up enough points in the casino pit for a free buffet or a show.

“That’s not what service is about anymore,” Marnell said. “Good customer service doesn’t necessarily mean more people, it just means having the right people and continually motivating people along the way.”

Jeff Voyles, a casino consultant and professor of gaming management at UNLV, says Marnell will have to deliver on his promises of high-quality customer service to succeed. While the margin for error in the casino business is smaller than ever, there’s still room for a more entrepreneurial, less-corporate approach to casino management, Voyles said.

“Service in Las Vegas was bad to begin with. Now it’s gone from bad to worse,” he said. With business and tips down, employees have even more reasons “to put their heads down when they go into work.”

Marnell has a golden opportunity to create a culture that values service over other goals, Voyles said.

The customer service that some big casinos lost sight of was key to the success of the Rio, which Marnell’s dad opened in 1990 to rave reviews, Marnell said.

Marnell, 35, learned the business from his father, who sold the Rio to Harrah’s Entertainment in 1999. As a 5-year-old, he recalls visiting his father at the coffee shop at the former Maxim, another casino owned by the elder Marnell, Tony.

Tony Marnell, who designed and built the M, also built the Mirage, Treasure Island, Bellagio and Wynn Las Vegas casinos for Steve Wynn.

The Rio boasted a hip nightclub and a loyal following of both locals and tourists. Like many casinos at the time, the Rio lacked much corporate meeting business, relying on repeat business from loyal gamblers.

“Gaming is high-touch, low-tech business,” he said. “We’ve gotten away from that.”

Now, the M Resort is luring corporate groups and other business with deluxe convention facilities. Results are mixed so far — good in light of corporate cutbacks, Marnell says, but slow.

Over the next three months, some rooms are available midweek for $59 and some weekends are sold out at rates above $150 per night. A few groups have bought up the entire hotel for their gatherings. Other nights are less than 10 percent occupied, Marnell said.

“We’re entering the perfect storm. It’s going to be very choppy.”

If business is a crapshoot, the odds, Marnell says, are slanted in his favor.

With a relatively small loan on his resort, Marnell says his building doesn’t have to perform as strongly as typical locals casinos that were financed during the real estate boom.

“We delivered the property two months ahead of schedule and under budget, so everyone’s happy,” at least for now, Marnell said. The bank wants to stick it out rather than take the money and run — to another developer — if things get rough, he said.

He expects some business from his nearest competitors — the South Point, Silverton and Green Valley Ranch — though his long-term goal is to grow the market with customers who don’t regularly patronize casinos and seek a “Mirage-like” experience off the Strip.

South Point owner Michael Gaughan says the M Resort will likely take more business from Station Casinos’ Green Valley Ranch than from his property because the M appears to be closer to Green Valley in luxury.

Unlike many casino owners these days, Gaughan, also a solo operator, isn’t encumbered by debt. He sold his Coast Casinos chain to Boyd Gaming in 2004.

Still, the going is rough for everyone.

“He’s a good operator. But it’s tough for all of us,” Gaughan said. “If times were good he’d have no problem.”

Now that times are bad, Marnell is focused on closing what he calls “a wide gap” between what customers are paying and what they are getting for their money. That, better odds and how to comp a dinner on a dime.

“You can’t standardize service,” he said. “If casinos continue to operate that way, guys like me will shred them.”

Discussion: 19 comments so far…

By BorisR

2/25/09 at 3:33 a.m.

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Let's hope that they do what they say. I like this article and hope that everything that's written is not only stuff for the paper but also something that turns reality....
That is...loads of Optimum Play Videopoker and many other Full Pay machines and high progressives with good paytables, good b-j rules, single zero roulette with capaple dealers, liberal comp policy, easy parking access and a nice poker room, coffee shop, open 24/7 with great specials and decent prices. I just have serious doubt that this will work out along with cost cutting measures. You can't offer super high customer service and at the same time run a casino profitable by cost cutting wherever possible. High service quality costs money, or there must be a huge army of gamblers overfloodding the casino and pumping up the cash register.
I definetely prefer the locals casinos over the Strip joints because of exactly that reason. I wish best of luck to the M-Resort management and hope that everything will be done as they say. I will be there in May. So that's two months to fix the little bugs and get everything ready :D

Greetings from Switzerland
By hoteldude

2/25/09 at 6:39 a.m.

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Won't outsource Restaurants? Well just ask the employees of the Edgewater and Colorado Belle about that. Not only did they outsource the restaurants, they also outsource the Kitchen Stewarding department as well as thier Public Area cleaners. These guys are the kings of outsourcing.
By frankie2

2/25/09 at 7:24 a.m.

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I have a friend that will be working in the BJ pits there. The games are going to be horrible. They aren't going after real gamblers, just tourists that are "afraid" of the Strip and gambling, IMO. They are mostly going to have shoes with bad rules -- Hit on Soft 17, No Surrender. Basically Harrah's properties rules. Hopefully they will be bankrupt like Harrah's in no time. Gamblers want good games, not being ripped off. Get rid of 6:5 Blackjack and Hitting on Soft 17 and maybe more people will play. Jeez for crap games like this I can go to Atlantic City or the nearest Indian Reservation.
By MrVincent

2/25/09 at 9:39 a.m.

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I hope they can hold on until the economy turns. SOMEDAY there will be alot of pent-up demand for leisure.

The machines in Vegas seem to get tighter and tighter and that's no fun.
By tvegas

2/25/09 at 12:36 p.m.

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I'll believe it when I see it.
By Jason

2/25/09 at 1:09 p.m.

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Anyone who knows las vegas knows the Marnells are the real- deal. The M Resort will surpass anything las vegas has ever seen in customer service- which is something las vegas has been lacking since the good days. Good Luck M! We need you!
By AngryReader

2/25/09 at 3:42 p.m.

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His dad did a great job with the Rio. In the 90's that place was golden. Not so much now that Harrah's has it. Hopefully Tony jr will do as well a job with his casino as his father did with the Rio.
By ront2

2/25/09 at 8 p.m.

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Best of luck to the M. You have a super location; plus it is near where many seniors live. Many of us enjoyed the *old* days of the Rio. Look forward to calling the M Resort - *Mio*.
By chengold

2/25/09 at 11:33 p.m.

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Very stylish hotel, good test!
Best of luck to it's opening!
When I return in summer time will most definitely visit the place and spend some money there.

From Shanghai China
By bigboy

2/25/09 at 11:48 p.m.

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I heard that they fired 6 security officers back in Dec for rumors. What kind of hotel fires people over rumors, and for management to believe it? I hope this places tanks due to lack of any management person knowing anything
By Eastern_boy

2/26/09 at 3:44 a.m.

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I was a loyal customer of the Rio when Marnell's ran it, so I can relate to the plan for their M Resort. Back then the Rio was warm, friendly and just a great place to spend a vacation. Once Harrah's took over I stopped staying there. It got so impersonal and high priced that it was clear I was considered as nothing more than a walking ATM. I hope the M Resort does create that comfortable feel they talk about. It can go along way in creating a successful hotel/casino.
By BorisR

2/26/09 at 9:54 a.m.

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The wheel is not being invented all over again. Casinos remain casinos. The edge will be on the house. What the can do, however, is hire competent and friendly staff, and keep the house advantage lower than at other places. It all depends on how big the debt-load is, and therefore, how much they MUST generate daily (avg), in order to keep the juice flowing. If the comp standards are high and tight then it's tough to compete. I have serious doubt that there can be a "fair and liberal" comp system without the computerized rating methods. Players will be either privileged or discriminated by some floormen, and that's a dire strait to walk on.
From Switzerland, Europe
By cheesiepeas

2/27/09 at 12:03 a.m.

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I am a ten-year Las Vegas Table Games dealer who has worked for many of the Strip resorts and all I can tell you is that if M treats the customers even HALF as good as they are treating the employees this place cannot fail. Forget the negativity, keep an open mind and visit the M Resort so you can judge for yourselves. My faith in the Marnell ethic is so great that I am leaving a great Strip job to work there - pay us a visit and let us PROVE to you that this is the place to be!!!
By BorisR

2/27/09 at 1:44 a.m.

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With the tight market caused by the credit crunch is it to be hoped that there's still plenty of gambling money liquid to feed another casino. I can only agree with cheesiepeas that the way customers get treated on a typical Strip Casino gaming table is not what I personally expect from a casino. But not only that. I hardly see cocktail waitresses in these large casinos passing through the slot sections. It almost seems to me that these huge Strip joints want the players to get their drink from the bar for 5 dollars instead of delivering it to them while these tourists are feeding the slots.
Not that it really makes a big difference as the customer would probably lose more money playing on while waiting for his "free drink from the cocktail person" but it's still a thing that a Vegas gambler appreciates. That's how I see it. Let's hope that the comps are liberal, the machinese loose and the coffee shop has great specials waiting for us :)
From Switzerland, Europe
By frankie2

2/27/09 at 11:36 a.m.

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cheesiepeas, i'm sure they treat their employees great but why the hell should i gamble there when there are better games anywhere in Vegas except Harrahs properties?

Why should I play a No Surrender, Hit on Soft 17 blackjack game when I can go over to any MGM property and get a much better gamble for my $?

You want my business, give me good blackjack, good craps odds, and good VP. Otherwise I will take my business elsewhere, I don't care how friendly your employees are.
By cheesiepeas

2/27/09 at 9:03 p.m.

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If you're someone who doesn't care about the service then you should definitely go to MGM (or any of the other big corporations). If you are a high roller then you will like the odds better...if you are a local, you will appreciate the whole experience we offer despite the fact that you can get better odds elsewhere. Good luck!
By azsk8fan

3/1/09 at 11:40 a.m.

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If they truly want to appeal to the locals they're gonna have to do way better on their food prices than what I've read elsewhere so far - $18 for pasta, $40 for a steak and $20 for a dinner buffet just are NOT LOCALS PRICES - maybe they have a coffee shop that just hasn't been mentioned - you know, the kind with the 2.99 Hamsteak/Egg special, the 9.99 Prime Rib special......now THAT would get me in to check the place out - but a $20 buffet - NOPE!
By stevem

3/1/09 at 12:21 p.m.

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they better have some super creative marketing ideas up their sleeves. i have never understood why places just gouge people for beer and liquor. why not have a beer tasting night or a sake tasting night?

for like $20 you can sample 10 beers or 10 kinds of sake. the liquor companies will pretty much give you the stuff for free, get a sponsor or two and you'll have something fun and different instead of the lame and worn out slot tournaments.
By azsk8fan

3/4/09 at 12:05 p.m.

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Cheesie, you underestimate the locals out here - we are not so stupid as to think that just because you're being 'nice' to us that we should have to tolerate higher house odds all for the sake of a free drink or a smile.