[robr2]

Originally Posted by stevek64

Right, but would seem a casino that can manage food, beverage, and casino operations, etc managing parking is a walk in the park, especially as it seems MGM had 400 Valet staff under their payroll/managed that aspect of parking already. I'm guessing it has to be a savings $ thing.

Oh, it's definitely a cost thing. Even if they pay the parking facility manager 50% of the take, the remaining 50% is more than what MGM is getting now and they do it without adding any overhead.

Originally Posted by BBMW

I also bet the contracted company is paying for the infrastructure to set up the fee collection.

They probably will - gates, ticket systems, scanners, software, et al. They may even sell the garages to the parking company who then shares the revenue.

[SportyandMisty]

Originally Posted by ScoopLV

You're not thinking like a casino. The number that matters is revenue per square foot. Filling the resort with people who love Larry the Cable Guy and Guy Fieri hurts that number -- whales don't want to rub elbows with hicks, rubes, and bumpkins. Hicks, rubes and bumpkins not only balk at parking and resort fees, they balk at any food which isn't on the dollar menu. They balk at any drink which isn't swill sold cheap.

Jettisoning the flotsam is nothing but good for the casinos. Let Station deal with the riff-raff.

Pick up a copy of The Innovator's Dilemma by Clayton Christensen at the library, and in particular read the section on Steel companies and how they jettisoned the flotsam (rebar) in favor of the high profit margin cold rolled steel.

[BBMW]

I think you're overthinking what I'm saying. I'm not saying that this would be something that would drive them under. It's just something that could end up being a net loser for them. This would be especially true if the other properties (CET, or whatever it's called this week, especially), don't fall in line, and fairly quickly.

If this were Wynn, it would be something of a no-brainer this would work. All his rooms play to the high end market. But 1/2 to 2/3rds of MGM's rooms are mid to low end.

Originally Posted by Willy702

Lets see what were all the things which were supposed to do in Vegas and cause a drop off in visitors and spending:

Gambling in Atlantic City? No
Riverboat casinos? No
I-15 being too congested with only 2 lanes? No
Tribal casinos in California? No
Online gambling? No
Bird Flu and other exotic diseases? No
Bag Fees for all airlines except Southwest? No
Resort Fees? No

So you are telling me a $10 or less fee for casinos are going to hurt them. Sure it is.

People don't show up with $20 in their pocket and say I can't pay for that, even at the low end Strip hotels. They end up doing crazy things like pay $20 for a $3 continental breakfast. They pay $14 for drinks from a bar in a place where many drinks are served free. They tip $5 for an 8 oz bottle of water because it comes with a serving of cleavage. If they didn't do these things don't you think MGM and Caesars, among the world's most careful data collectors, would see it almost immediately? They do their homework on everything and somebody who doesn't even live in Vegas like you doesn't know their business better than they do.

The people you seem to think will behave like that do come to Vegas. They stay in the hostels north of the Stratosphere. Or they stay with friends and family who live in Vegas. Those people will now park at the ends of the Strip and walk and spend just as much time and money as they did before. They can whine about it with the people who will tell you how great Vegas was in the 70s. They will complain that there should still be a $5 buffet, which there is a the Palace Station, and say it should be as great as the buffet at the Wynn. They will complain how 99% payback slots don't exist any more and forget even with those they rarely won on the slots. That's the Vegas you seem to be buying into.

[ScoopLV]

There's a difference between "low end" and "the bottom."

The bottom parks free, walks around the Bellagio conservatory and fountains, doesn't spend anything and leaves. I don't blame them one bit. But the casino doesn't want such people on their property.

There is no limit to what people will do for free entertainment, and free stuff. Most people would stand in line for free headaches. MGM wants to shed such people. Charging for parking accomplishes this strategy.

[BBMW]

^
This goes against the way the casino industry has been run from day one. The idea was always to build traffic through the casinos, knowing that a certain percentage of those that flow through will stop and play. And you really can't predict which of the crowd will.

Now your saying this specifically want to limit traffic. Okay, but there's no way this doesn't have the reverse effect to what I stated above. The guy with a hundred bucks in his pocket who might drop that in some MGM slots doesn't want to pay to stop at an MGM property, stops somewhere else, or doesn't stop at all. Yes, this is not a big bucks transaction for them. But given their size, their are not enough big bucks transactions to keep all their properties afloat. They may not want the low rollers, they may look down their nose at the low rollers, but they still need the low rollers. And that's who their pushing away (along with the one who just want the freebees.)

We should just park this thread till April/May, and see how this shakes out. It will be interesting to look at the two quarters of MGMs financials after this starts.

[von949]

Just wait till the Fremont Experience gets canned. People will rage about how it was their favorite attraction downtown. Some will even claim that it was their number one reason to visit the area.

[von949]

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[ScoopLV]

Originally Posted by SportyandMisty

Pick up a copy of The Innovator's Dilemma by Clayton Christensen at the library, and in particular read the section on Steel companies and how they jettisoned the flotsam (rebar) in favor of the high profit margin cold rolled steel.

In general, I don't care for business strategy books. Some of them hit the mark, though. But in general I've concluded that most business strategy books are retreads of Sun Tzu's "The Art of War." Anyone who understands that book can run a business.

I just read the chapter you mentioned. And, yes, my opinion is that this is another retread of "The Art of War."

Since we're trading reading lists, I suggest "The Black Swan" by Nassim Nicolas Taleb. I don't think the parking situation at MGM counts as a Black Swan event -- not even in the gaming industry. Just that this book has a far more lofty scope and can't be compared to "The Art of War."

[SportyandMisty]

Originally Posted by ScoopLV

It would have to approach the cost of taking a cab from our house on the extreme east side to the Strip.

Wait. There are houses on the extreme east side???

[SportyandMisty]

I hope I can correctly post the following screenshot, as I've had a few technical problems of late.

This is a screenshot comparing the price of the stock of major gaming companies, the S&P 500, and the Total US Stock Market.

Over the past 3 months, almost everything is down, of course, but some things are down more than others.

VTI, an ETF of the Total US Stock Market, is down 12.8%
SPY, an ETF of the S&P 500, is down 11.5%
WYNN is down 13.6%
LVS, Las Vegas Sands, is down 16.3%
CZR, Caesars, is down 23%
MGM is down a whopping 29.53%. 30% !!!!

Perhaps the market anticipates a drop off in revenue from the forthcoming parking fees.