Just got a handful of mail offers from our Lake Charles casinos. WOW! Cash offers up. free buffets ($30/meal), more free nights (up to 5 in a row) and we played less. So I thought I'd check the Louisiana Gaming reports.
As I suspected: Latest report from July 2010 to August 2010.
Lake Charles area: -14.3%
L'Auberge du Lac - 12.6%
Isle of Capri -16.2%
Aug 2009 - Aug. 2010 Lake Charles down -7.7%
L'Auberge du Lac - 5.7%%
Isle of Capri -9.1%
This past weekend the Slot Director at Isle came through the VP area. He stood and looked around.The nickel multi-hand was full; progressive 25¢ 3/6 machines ($1,200+) and 2 people in the regular VP machines out of 30+. He didn't look happy. The regulars have repeatedly told them they made a mistake when they lowered the pay tables, eliminated JOB/DW from the machines and added Keno which VP players love to hear when they are concentrating on playing.
Even LDL was light on Saturday night.
They never learn.
LL
Better Offers - Casino Gross Down
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Lucky Larry
- Video Poker Master
- Posts: 2693
- Joined: Sat Dec 13, 2008 7:35 pm
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rascal
- VP Veteran
- Posts: 674
- Joined: Tue Sep 12, 2006 12:25 am
Gross win can be down and yet casinos can still maintain their required net profit margin for stockholders through aggressive cost management....i.e., reduced paytables, cutting back labor proportionately to attendance, reducing amenties, energy conservation, etc. The problem for this is that while it may enhance the bottom line short-term, it has a long-term negative effect because it drives customers away.
So the prudent management decision is to increase traffic rather than to chop expenses. Sometimes promoting traffic while cutting expenses very selectively will result in achieving net profit margin targets even during a bad economy, such as the current one. This is what Lucky Larry is seeing in his area. In his area, where the president's deepwater oil well moratorium has hurt a lot of people, casinos are being forced to be much more aggressive.
There is a very delicate balancing act between aggressively promoting to the point where you are actually losing money on new traffic, or cutting to the point where your traffic doesn't like your casino anymore. Sometimes it is helpful for players to look at the perspective of stockholders who, just like players, are also taking risks in investing their hard-earned money.
So the prudent management decision is to increase traffic rather than to chop expenses. Sometimes promoting traffic while cutting expenses very selectively will result in achieving net profit margin targets even during a bad economy, such as the current one. This is what Lucky Larry is seeing in his area. In his area, where the president's deepwater oil well moratorium has hurt a lot of people, casinos are being forced to be much more aggressive.
There is a very delicate balancing act between aggressively promoting to the point where you are actually losing money on new traffic, or cutting to the point where your traffic doesn't like your casino anymore. Sometimes it is helpful for players to look at the perspective of stockholders who, just like players, are also taking risks in investing their hard-earned money.
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Lucky Larry
- Video Poker Master
- Posts: 2693
- Joined: Sat Dec 13, 2008 7:35 pm
Gross win can be down and yet casinos can still maintain their required net profit margin for stockholders through aggressive cost management....i.e., reduced paytables, cutting back labor proportionately to attendance, reducing amenties, energy conservation, etc. The problem for this is that while it may enhance the bottom line short-term, it has a long-term negative effect because it drives customers away.
So the prudent management decision is to increase traffic rather than to chop expenses. Sometimes promoting traffic while cutting expenses very selectively will result in achieving net profit margin targets even during a bad economy, such as the current one.
Rascal,
You hit it exactly, with the new GM (November) came a whole new management team- a new marketing mgr. (who is more aggressive in promotions), new slots director (elimination of a position by combining slots and tables under one director), new hotel mgr., elimination of veteran hosts and elimination of VIP services. We also saw a reduction in quality of simple things as toiletries/coffee etc. in the hotel, closing the second hotel during the week to fill the casino tower, reduction of casino staff, and reduction of inventory of casino supplies (ticket paper, supplies, and repair parts). These immediate costs aren't normally seen by players but by talking to the staff you get a real sense of an immediate attempt to reduce operation costs. We have had several conversations with the new GM including this week. He and I discussed some of the positive cosmetic changes and the loss of patrons and how difficult it is to get them back.
BTW: Several of our family work in the oil business. With the 4-5 digit bonuses, raises, and promotions this year they aren't feeling any effects of the temporary ban on drilling. Our friends in La. are more impacted by the overall economy and the oil spill. It is a tough time for many people right now and lets hope things continue to improve for all.
LL
So the prudent management decision is to increase traffic rather than to chop expenses. Sometimes promoting traffic while cutting expenses very selectively will result in achieving net profit margin targets even during a bad economy, such as the current one.
Rascal,
You hit it exactly, with the new GM (November) came a whole new management team- a new marketing mgr. (who is more aggressive in promotions), new slots director (elimination of a position by combining slots and tables under one director), new hotel mgr., elimination of veteran hosts and elimination of VIP services. We also saw a reduction in quality of simple things as toiletries/coffee etc. in the hotel, closing the second hotel during the week to fill the casino tower, reduction of casino staff, and reduction of inventory of casino supplies (ticket paper, supplies, and repair parts). These immediate costs aren't normally seen by players but by talking to the staff you get a real sense of an immediate attempt to reduce operation costs. We have had several conversations with the new GM including this week. He and I discussed some of the positive cosmetic changes and the loss of patrons and how difficult it is to get them back.
BTW: Several of our family work in the oil business. With the 4-5 digit bonuses, raises, and promotions this year they aren't feeling any effects of the temporary ban on drilling. Our friends in La. are more impacted by the overall economy and the oil spill. It is a tough time for many people right now and lets hope things continue to improve for all.
LL
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