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September 2, 2014

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Looking in on: Gaming:

Aiming to avoid irritating guests, Cosmo won’t charge resort fees

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Leila Navidi

The Cosmopolitan of Las Vegas does not charge a resort fee to its guests, “because people don’t like it,” CEO John Unwin said.

The Strip’s newest resort has a provocative ad campaign and artsy attractions to distinguish it from some of its competitors. But there’s a post-recession element behind the Cosmopolitan of Las Vegas’ glam rock facade: A contrarian decision to not charge hotel guests resort fees, which are bundled charges for amenities such as the gym, local phone calls and the morning paper. Such fees, which have spread across the hotel industry, must be disclosed up front and are mandatory for guests staying at properties that charge them.

“I’ve been playing around in that (resort fee) arena for 15 years,” veteran hotelier and Cosmopolitan CEO John Unwin said in a recent interview. Though hotels often tack on resort fees to offset plummeting hotel rates, “we’re not doing that because people don’t like it,” Unwin said.

Hoping to attract customers who will lounge in the resort’s public areas and dabble with its surrounding restaurant and retail offerings, Cosmopolitan also doesn’t charge for Wi-Fi access, which is available throughout the resort.

“I think that will go away — outside of Vegas it’s going away,” Unwin said of wireless access charges. “People find it irritating to pay $15 to use their computers.”

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Click to enlarge photo

U.S. Green Building Council plaques recognizing LEED Gold status of the CityCenter buildings are displayed outside Aria at CityCenter in Las Vegas on Wednesday, Dec. 16, 2009.

MGM Resorts spent a premium on CityCenter to incorporate eco-friendly features into its design, citing the growing cultural importance and cost-saving business imperative of being green.

The $8.5 billion project has underperformed in the downturn. But the company has begun retrofitting its other Las Vegas hotels with energy-saving methods and technology cultivated at CityCenter. They are expected to yield significant savings in operating costs at older properties, executives said at the Global Gaming Expo last month.

CityCenter’s eco-friendly design earned the project six LEED gold certifications from the U.S. Green Building Council and the distinction of being the world’s largest green-certified development.

It’s a big selling point for convention planners who typically ask whether the building has a “green” certification before they decide to book rooms and meeting space, said Paul Berry, vice president of hotel operations for CityCenter’s Aria resort.

“They want to come to a place they feel good about,” he said.

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Jan Jones

Jan Jones

While hotels across town have been forced to lay off workers and reduce services in the bad economy, Caesars Entertainment says it’s also working to cut costs in less painful ways.

Last year the company adopted a program created by Toyota for use in assembly line manufacturing. Caesars adapted the “LEAN” program for repetitive tasks in the hotel business by allowing line employees to propose adjustments in their work space that increase efficiency. Employees suggest changes most helpful to them rather than having the changes imposed by management, said Jan Jones, senior vice president of communications and government relations.

These changes — as simple as moving toaster ovens closer to where meals are prepared so food is served faster and is hotter when it arrives — are saving the company money while improving service and morale, Jones said.

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  1. I find it interesting that a bank-owned casino, the Cosmopolitan, has such obviously superior top management than its major competitors.
    Resort fees are bad for the public and even worse for hotel check-out staff, who must bear the wrath of disgruntled guests. Although the top brass of the competitors might brag about the money their resort fees have brought them, they are too economically naive to consider that the business they never see because of those horrid fees negates the resort fee money they love to count.
    Congratulations Cosmopolitan on opening in this recession and in demonstrating by wise management decisions that you are a superior location.

  2. Unbelievable. Finally a resort hotel doing something right. The Cosmo just might make it.

  3. I was hanging out along the strip this past week. I heard people complaining in a bar about the resort fees at MGM properties and how they'd never stay at an MGM property again. I don't think you can collect enough in resort fees to compensate for the brand damage. Cosmo paid 3:2 on blackjack (unlike Harrahs properties with their 6:5 BS) and they had beautiful cocktail waitresses who came around frequently. I didn't have a room there to check out but I'd surely consider staying there as well as playing there.

  4. "Cosmopolitan also doesn't charge for Wi-Fi access, which is available throughout the resort.

    "I think that will go away -- outside of Vegas it's going away," Unwin said of wireless access charges. "People find it irritating to pay $15 to use their computers."

    Bravo!

    During Netroots it was cheaper to go out and get CLEAR and a DLink router that ended up giving dozens free internet. No one was impressed by the little bit of Vegas I can assure you.

  5. I believe its better to set the room rate @ a set price plus tax. I've stayed at The Cosmopolitan. I'm very proud of the hotel/casino, and believe that they are going do do extremely well.

    We had two rooms, one that overlooked both the Bellagio fountains and at Caesars. Plus we had another balcony overlooking the strip. The other room overlooked the south strip. Killer rooms

    If I bought a condo, even if I paid to much, but could afford it. I'd very dissapointed not to have gotten one. I feel bad for the condo purchasers that are not going to close. You missed out on a great condo. Lucky you guys didn't loose your whole deposit.

  6. Thanks Cosmo, now do right by the condo owners. See ya next month.

  7. Let's hope the others will follow this trend. Even Station Casinos will have to understand that they drove away a lot of otherwise loyal customers because of this ridiculous way of making extra money.
    I will probably not be the kind of customer that can afford staying at a deluxe high end resort just like the Cosmo, but I like to read that the upper management of such a super hotel realizes that sometimes you must listen to the customer as well. Let's really hope this will be the beginning of a new era.
    From Switzerland

  8. Cincydan, I worked in the resort finance department for many years in Florida and the resort fee is taxed just like the room charge... the only difference is you do not pay the extra bed/tourist tax (which in Florida was in extra 4%).

  9. Cosmopolitan doesn't need to charge a resort fee to make money. After all, it is sitting on millions of free $$$ in deposits from condo buyers there, who put up their hard-earned money to buy a condo there and received nothing but deception, runaround, and legal bills in return.

    http://www.lasvegassun.com/news/2010/dec...

    So, if you stay at The Cosmopolitan thinking that their owners at a huge German banking conglomerate are being so kind and generous by not charging you a resort fee, remember that a ripped-off condo buyer is in effect paying it for you.

  10. Who was the bank that the condo buyers originlly make the deal with? If that bank went bankrupt, wouldn't you loose everything?

  11. lol, drum-rolls-please, I have to come-up with an anouncement:
    loyal_employee, I don't know what exactly you mean to critize my person or my comment. I don't think your nickname in here is less boring than my comments. IN fact, it looks like an indicator that you are working for one of these greedy corporations and therefore of course can't say all you want, or publish your name. Whatever, good luck keeping your job, stay loyal, eventually you will.
    From Switzerland

  12. Finally a resort that's been listening to the whispers of clients. Imagine that? Good on your Management at the Cosmo!

  13. the cosmo will definetely be one of the main "new points of interest" to me on my upcoming visit. heard many good things about it, although it's an high end luxury resort, which does not fit into my cathegory, unfortunately :( Hopefully they have good games available, so I will try my luck when I come by for a visit :)
    Greetings from Switzerland