Friday, March 9, 2012

Myer Lansky's Other Riviera Hotel (& Casino)



I told my friends and family I'd be back from 1958 early next week. And I'm here to tell you time travel is very emotional.

My first feeling is that it's rare you feel sorry for a mobster. But standing inside the 60 year old lobby of the Habana Riviera in Havana Cuba, you gotta give it to the guy. He built this place to last. There is heart and soul all over this monument to capitalism..

Started by mafioso Meyer Lanski in 1956, the Habana Riviera is a classic and was once a truly class act. Meyer did two things very well. He ran a fair casino game and he built a royal castle for his customers.
So his pride and joy of the Habana Riviera was built to treat folks like visiting royalty at the peak of fashion of his time.

As I said, it's hard not be bitter, emotional, confused or unaffected by visiting 1959. This is especially true when standing in what could be the neatest mid-century modern architectural gem in the hemisphere.

See back in 1957, Meyer had this idea of complimenting Moe Dalitz's development of the nine story Riviera Casino on the Las Vegas Strip with his own house of illustrious gaming. But he was not going to be subject to US laws and the FBI.

Instead, he'd build his legacy in the safer environs of a foreign country, with smart officials who knew how to take a bribe and shut up. But Castro proved Meyer wrong on the politics. Not all leaders saw the benefit of casino bribes. So Meyer had to take a one way trip back to Florida sans his casino winnings and his palace. But he did win the architecture bet.


Even half a century of communist and socialist government ownership can't obstruct this big dreamer's dream. The architecture still calls to you.

Like a Cuban version of Las Vegas or Miami, the Habana Riviera sits on the extreme East side of the Havana malecon. This malecon is a seaside meeting spot for the poor city residents to watch sunsets and enjoy a secrete tryst or just while away the dark hours in conversation as there's nothing on tv. Shared with a four lane highway the malecon extends from it's 1600's-era fort beginnings, past the new 1850 era prado, beyond the collapsing residential towers of the party elite and ends at the final bend here, at the Havana Riviera.

Today there's almost nothing to do around the Riviera except gawk at the class differences the Habana Riviera represents. In contrast to the Cabrini-green style concrete apartments that overlook it's pool, the Riviera is the Ritz.

While travelers pay $125 a night for a decrepit, poorly maintained room overlooking the o
cean--residents get paid just $30 a month and scratch out a living stealing from the State or selling themselves to the tourists while they're still young and able. It's hard to complain about threadbare towels and barely lukewarm water when folks next door get excited about their 1/2 pound monthly hamburger ration.

The experience is alie
n at the Habana Riviera. In the states they would have torn this down and "put a window where it outta be". Instead, international modernism took it's time and stayed still.

Here you are in a $7 million (1958 dollars) palace of stone, marble and concrete with the glittering Caribbean sea right before your eyes. The tiny blue tiles hand laid over the exterior still shine. The Florencio Gelabert statues still dance fluidly. And the sweeping curves of the Salon still invite you to grin and explore the space.

Truly a testament to capitalism that it still pulls Dwell magazine readers from around the globe
to feel it's interior.

Like the vintage cars that rumble in front of it, the 16-story Habana Riviera in a way has benefited from the island’s isolation from U.S.-influenced upgrades and development. Much of the original architectural, design and décor elements have been preserved, including a curious rounded structure that originally housed a casino and now provides meeting space. Seen here as the Salon.

Guest rooms — as well as the Mirador de la Habana restaurant — feature excellent views of the water and the Vedado neighborhood. But don't get too close to windows. You could easily pitch out over the side.

Th
e Copa Room Cabaret stages a Tropicana-style show and also serves as a dance club. Here you'll get chatted up by girls willing to go all the way for a months wages. Didn't I mention? Cuba is as much a sex trade hotspot as Bangkok. The juvenistas and juvenistos will scheme 30 bucks from you one way or another. Just figure on a bribe to the cops when you get hassled. In this way I suppose the lurid subtext that called travelers to Havana back in the repressed 50's is still live and well today.

The outdoor swimming pool still has its original three-level diving platform. Salt water, too. Art lovers should take note of the pieces by Cuban sculptor Florencio Gelabert. Seen here is a mural by Dirube.

But try to get an original recipe Cuba Libre cocktail --that all important ingredient to de-focus the eyes and squint just enough to imagine what it must have been like during the opening in 1958? Forget it. You'll have to settle for a smoke filled lobby and dirty glasses to get the right effect.

That's because there's no fresh limes and no Angusta bitters to set off the light rum and fake Coca Cola. But it get's more interesting. There's also no mayonnaise, no hot sauce, no salsa, and believe it or not, no pepper in the ENTIRE HOTEL. The fruit and juices will be bitter and the selection of foods will be chicken or pork. Plus, you'll get to enjoy 18 flights of stairs in the dark as the power tends to go out twice a day. Be sure to bring your own lighter or flashlight, too. There are none for sale in any store on the island.


But bring your camera if you visit. Walk to the ocean front side of the property and peak in the original lobby doors. Gaze through the unused space and imagine descending the curved stair case that once connected the Mezzanine floor. Position yourself at the pool cabana just right where you can't see the projects looming over you. Bring your own limes, some hot sauce and peppers and soak in Meyer's dream. Then get the hell out of there and go back to Cancun, Mexico and gamble at the Playboy Club. You don't want to give the new mobsters of Cuba another dime than you have to.

At least Meyer guaranteed a fair game.








Thursday, March 17, 2011

Andy Choy Needs New Hands @ The Riviera Hotel & Casino



Empty Pool Above the Casino Being Pumped and Patched Rather than Renovated 
You can hear the stall warnings wailing in the background at the Riviera Hotel & Casino in Las Vegas with losses mounting.

It's been a year since we last wrote about the poor Riviera Hotel & Casino in Las Vegas.  The Riviera is not doing well under Mitt Romney-style ownership.  Old school Vegas marketing techniques  need to be revisited and fast.  Down-market positioning is NOT viable in this economy.  The whole idea is to make a profit on your casino, guys! 

You can't lose $1.3 million a month and stay open....

Yes, Andy Choy and his team have done a suitable job cleaning up the rambling property, but the most recent 10q filings with the SEC are dismal. There are reasons Andy Choy might want to send out his resume and call a recruiter.  Or change his tact and obtain some infrastructure investment....

Buckets Catch Rainwater on 9th Floor of Mediteranean Tower.
It's my opinion that slash and burn management cut into muscle of this great property.  Stingy, skinflint tactics are actively erasing the customer gaming base.   Riviera Management continues to fail on numerous fronts trying to save a few operational dollars. And haphazardly target marketing the Asian segment is not leading to profitability. (Who would have thought Koreans liked MC Hammer and Tone Loc for New Years, right?)

Here are 6  examples of the colossal management  failures  leading to even more down-market positioning and flatline -to-decreasing revenues:
  1. Removed the bar in the Mediteranean Tower casino so that it's easier to buy a beer at the Gift Shop than near the gaming floor. (saves money on union bartenders, but gamblers need to drink to gamble)
  2. Pushed slot club sign-up to the cage (who signs up for player tracking AFTER gambling?)
  3. Removed wait staff from the coffee shop  (so the room service eggs arrive in more time than it would take to walk across to McDonalds or next door to the Peppermill)
  4. Removed Cash  Slot Incentives for  Club Riviera (now when you lose $1o00.00 at slots they offer a maximum $50 Credit at The Steakhouse)
  5. Slashed in-house entertainment to a fourwall premise and no unique draw.
  6. 16 minutes for Oatmeal at Poolside Cafe
  7. Repeatedly  marketing on a room-discount-basis, rather than a Special Event basis
 So what happens when you take a non-themed casino property and cut out all that's special?

Nine Month Net Loss Increased from $11.2 to $27.2 Million from 2011 to 2012

Quarterly income fell by a million five.

Gaming fell $500K.
Taking into consideration the adjustment for promotional free play, the slot machine revenue actually decreased $0.5 million for same period year over year. Table game drop was $13.0 million for the quarter ended September 30, 2012, compared to $12.5 million in the prior year; however, hold percentage decreased to 11.6% from 14.4% 
Entertainment was slashed 50%.

Promotional Allowances Dropped a Further 12.1%


 In sum, we feel it's vital the Riviera owners should do the following if they want to see a profit:
  1. Hire an Outside Direct Response Marketing Agency to Oversee Revenue Development
  2. Deploy Proven Marketing Tactics to Raise Gaming per Occupied Room Night
  3. Develop 12 More Annual Special Events, Slot Tournaments  & Promotional Campaigns
  4. Enhance Slot Club Value & Hire Staff to Implement
  5. Install New Signage and Promotional Elements to Capture 60,000 daily Strip drivebys


___________________________________________________________________



This week, Starwood's Barry Sternlicht received approval from the Nevada Gaming Control Board to acquire the 2,075-room Riviera Hotel/Casino. According to a bankruptcy restructuring agreement, Sternlicht will control 79 percent while Derek Stevens, a 50 percent partner in the Golden Gate Casino, will own 21 percent.
Sternlicht has appointed Andy Choy as the Riviera’s chief executive officer. He said the new property will target out-of-town visitors as well as convention business. How will they do it? Hopefully, lots of Starwood members will get a great promotional incentive to visit the RIV, but what will they find once there?
In comparison to the other mob-built Riviera in Havana Cuba, Choy seems to be doing a great job cleaning up the joint with more elbow grease than capital investments. Smart, simple changes are coming evident, but his hands are still tied behind his back.
For instance, Choy moved the front desk closer to the parking structures, but long check-in lines still prevail. Further, The RIV still lacks a currency for gaming development or attracting foot traffic. Direct marketing is spotty and discount-driven with a hidden $12 daily resort fee that climbs further northward to boost revenues while filling rooms. This super-cheap room price works like Walmart, but ends up putting heads on beds that hop the bus down to a far more lively Fremont Street Experience.
That's because the resort fee comes with no added value or entertainment --which makes repeat customers less likely. He spoke recently of investing in the pool, but no visible plans were disclosed on the giant hole above the casino which hasn't seen anything but rain water since Reagan was president.
He needs in order:
  • To Empower Underlings
  • New Exterior Lighting
  • Bus Rider Attractions
  • Low cost Locals Campaign
  • Better Social Media Tools
  • Promotional Offerings with Emotion
  • Action Marketing Campaigns
  • Euro-style Inclusive Packages
I had the pleasure of cutting my teeth early in my marketing career as Director of Database Marketing. Back in 1992, the property was disadvantaged by a lack of master planning and an aging infrastructure. Yet, we were able to bring the property out of bankruptcy using some then-innovative marketing techniques to stimulate word-of-mouth, free press coverage and realign a aged hotel into a world-class destination resort.We offer some of these videos to Mr. Choy and Sternlicht as a roadmap to recovery. (And yes, we posted these videos to get their attention for our direct response marketing agency)



Formula For a Great Las Vegas Vacation

This tv spot was created in four hours to fill advertising time provided by a TV series titled WED NIGHT FIGHTS AT THE RIV. Created in 1992, the TV spot features Johnny Bench, Lou Gossett JR and Magic Johnson in a re-use of promotion footage. The formula proved a success generating thousands of calls for reservations.


Live PR Stunts & Free Giveaway


Frank Pournelle learned to propel word-of-mouth buzz and liquidate promotional expenses at the Riviera Hotel & Casino. Developed in the early 90's, this promotion cost the casino 13 cents an entry. It's a great example of how to capture attention via social media/public relations and then use direct response marketing techniques to establish a relationship between brand and consumer. This news clip from Nashville TN explains the highly successful Classic Car Giveaway that started on Route 66 and ended with a 300,000 person database for the then 12th largest hotel in the world. Here's how they did it: As the story goes, the Riviera was hampered by crazy, non-functional architecture, so this promotion was designed initially to drive in-bound foot traffic from the nearby Stardust, Circus Circus, Sahara and WestwardHo casino properties. Interestingly, it was calculated that every person who stepped onto the property ended up dropping $5 into a slot machine on average. That's the self-liquidating expense. But they went further: Entries from consumers captured visitor information which were then marketed via direct mail for a return trip featuring a $400 casino package called The Aristocrat Club. Lots or press coverage, live event entertainment, lots of hoopla and energy helped translate promotions like this into the Riviera emerging from bankruptcy in under 12 months.



The Aristocrat Club from the Riviera Hotel & Casino

The problem was that the Riviera was losing money on being a dormitory for 'heads on bed' travelers. With incentives and promotional rates to fill the hotel, gambling became a lost cause--and that's the whole point isn't it? The in-house agency for the Riviera was tasked to create a promotion that would attract new out-of-town destination travelers and reinvigorate gaming-per-occupied-room-night. The Aristocrat Club guaranteed this target of $100 per room through the use of pre-paid gaming tokens. Another huge feature was the recommend-a-friend program. Promoted via direct mail, the Aristocrat proved to be a viable when targeting midwest plumbers, electricians and trade personnel. A trial run with 500 Japanese tourists showed the visitors not only gambled the entire $400 each in gaming action chips, but reached further deeply into their pockets trying to win it back again. Take a look at the hair on that Director of Marketing! PHONE LINE DEPICTED IS NO LONGER ACTIVE AND THE PROMOTION HAS LONG SINCE BEEN CLOSED.




This video news release was made by the in-house marketing team of the Riviera. The announcement was picked up by local and national TV stations as part of a PR effort to control the message of the 2000 room casino emerging from bankruptcy. Prepared in three formats, the video was timed to appear on weekend news broadcasts in either sports, financial or general news segments.




Battling Architecture with Amazing People


The Marketing Problem: Mirrored casino with huge frontage afforded a view of the competition. The Marketing Solution: Create low cost hoopla and an interactive experience, to entice visitors onto the gaming floor. It was a different time, just before political correctness, but the idea is enduring. www.LastSecondMedia.tv founder Frank Pournelle is tasked with increasing foot traffic into the 12th largest hotel in the world. Budget? $300 a day. The scene is a casino on Las Vegas Blvd. The architecture is so horrendous, we needed to distract walk by traffic and entice them into the casino. Code named "Freaks on the Street", this was the first casting call that netted us Scott the Clown, a John Wayne, an Elvis impersonator and even a May West. The Laurel & Hardy guys lasted about 2 weeks as I recall, but they made the press conference and the 5 o'clock news for us. Nice green Hugo Boss suit, huh?





Riviera Hotel and Casino 1992 Sales Video
This sales video helped put over 1,000,000 heads on the pillows of the Riviera in the 1990's. Produced by the in-house marketing agency at The Riv, the team put the very best face on an admitted sub-prime convention and travel facility. The video was used to attract airline and travel agent business, junket tour operators as well as important convention events. You'll note a great deal of focus was placed on the 2,000 employees--which put a smiling face on a dated property. Shortly after production of this video, the Riviera emerged from bankruptcy.



The Never Before Seen Photos of Marilyn Monroe


This promotion ran in 1992 as a low cost promotional event over New Years Eve weekend. The real secret was how little the event cost, the draw it provided, and the amount of publicity it generated. Included stints on UP ALL NIGHT on USA, plus coverage in USA Today. Publicity alone was valued over $1 million with a total cost under $250,000. The year prior Frank Sinatra delivered under a million dollar profit over New Years Eve and instead this facimile 'event' helped deliver over $5 million in casino profits. The yearly gifts to loyal gamblers were greatly appreciated as well. A commemorative gift set sold recently on EBAY for over $1,400.