Does Las Vegas Deserve a Recovery?

November 4, 2009 by  
Filed under Fools of Finance

I am in Las Vegas on business this week – attending some trade shows to help a couple of clients find competitive infringing products. Not fun but productive. With an entire industry jammed into a single convention center, finding knock-off targets is like shooting ducks in a pond.

Vegas is hurting in almost every economic category, starting with the collapse of the real estate market and ending with underpopulated casinos.

Yet Vegas has not seemed to respond well. The city is increasingly difficult to get around. The streets are crowded. The monorail system is anemic and over-priced. The worst is that the hotels are trying to boost profits by price-gouging convention travelers.

The conventions in town this week are huge. Most of the moderate and high end hotels are sold out. My assistant found a standard room at Caesar’s for the ridiculously high rate of $450 – on a Wednesday. I have been to Vegas many times with Mrs. ToughMoneyLove and sometimes with the kids. We have always stayed at nice hotels and never paid anywhere near that rate. I complained to the desk clerk at check-in. He unapologetically told me that when a large convention is in town and the hotels are full, the rates get jacked-up big time.

That’s classic supply-and-demand capitalism, of course, but here is what really bothered me. As he was checking me in, the clerk asked if I wanted a room upgrade. In response, I asked him if the upgraded room would cost more than $450. “Of course”, he said. I told him no thanks. Ten seconds later he told me that he was going to upgrade me to a mini-suite at no extra charge.

Who is he kidding?

Obviously, there were no standard rooms available. This mini-suite was the only room he had to accommodate my reservation. But instead of just giving it to me (because he had no choice), he tried to suck some more money out of me. Then he pretended he was doing me a favor.

This is a classic case of customer abuse, which to me is foolish behavior in the hospitality industry.

It is sad, really, that Vegas cannot seem to find its place in our economy. I used to enjoy coming here. Considering that Vegas has been built on excess and wasteful spending, it may never regain its former self. Our personal spending habits have evolved and Vegas has not evolved with them. Vegas may not deserve the economic recovery that it desperately needs.

I’m going to give Las Vegas my Fools of Finance award this week.

Have any of you experienced the Sin City recently? Thoughts?

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5 Responses to “Does Las Vegas Deserve a Recovery?”
  1. Rick Beagle says:


    I am sorry, but what tenet of capitalism did these folks break? They had you cornered and decided to maximize their profits at your expense. Sort of like what the health care industry is doing across the country (you know I just had to add that).

    For what its worth, I agree that overt greed is an ugly thing to behold, but like it or not, that is capitalism in a free market. So suck it up, pay the man his due and know that these clowns showed you a thing or two about how to maximize profits. And trust me, they don’t give a damn whether you come back or not, they are just trying to weather this recession intact.

    Rick Beagle

  2. kitty says:

    18 years ago I went to a convention in Las Vegas – COMDEX. This is like a computer show where IT vedors show their new technology and businesses that are interested have a chance to watch it, learn about it. This was a bit of a reward trip – our company was represented, but our group was there just to walk around, see what other companies show, etc. The hotel the corporation reserved wasn’t as fancy as the one stayed in, but it was about $140 a night which wasn’t a small amount then and certainly way too much for Las Vegas. The trip was fun, the convention was interesting, and you had a chance to pick up some freebies – toys, T-shirts and such by just watching a presentation in one booth or the other. You could win a printer – expensive back then – if you could beat a junior national champion – a 15 year old girl – in ping pong. Nobody managed.

    One of our people had a chat with one of the hotel employees and they said they really hated COMDEX and that Las Vegas was losing money on it because people came in, booked all of the rooms but spent very little if any time gambling. Sure people ate, looked around, went to a show or two, but most weren’t interested in gambling or at least limited their losses to low double digit amounts. Ditto about shopping in overpriced stores on the strip – some people drove to malls around, but I don’t know anybody who spent any money on the strip.

    I’d imagine the same is true for your convention. When people come to Vegas to gamble they might get cheap price for the hotel, but they lose a lot of money. But conventions take up lots of hotel rooms but don’t bring casinos much revenue. And all the people who are employed in casinos have to feed their families, pay their mortgages and other bills too.

  3. MasterPo says:

    I’m forced to agree with Rick. That was the only room available and that’s the price. Not the hotel’s fault you had no other choice.

    BTW, I’ve heard from many other sources that Vegas is in really deep doo-doo economically. Not only the usual recession stuff but the number of conventions and business conferences is waaaaaaaaay down this year, in part due to the Obama administration making it a virtual crime for business leaders to fly out and get together for networking and elbow-rubbing. Ask anyone in the hotel and conference industries, 2009 is a very very bad year for just that reason!

  4. cjbr549 says:

    I live fairly close to Vegas and go there several times a year. The good deals on the strip started drying up about 8 years ago. I’m sure they have been going downhill for quite a while before that. There are still places you can get a good deal, most notably downtown. We only stay downtown now, even for conventions we go to that are on the strip. Having driven in Vegas quite a bit, we know how to get around and avoid the worst traffic. The Binions properties downtown are fairly nice and not too expensive. But everyone we know that wants to go to Vegas wants to stay on the strip. We used to accommodate them and book a room at the same place, but we won’t even do that now. There are still deals to be found, you just have to go off strip to find them.

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