 | ||
| Empty Pool Above the Casino Being Pumped and Patched Rather than Renovated |
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. |
Here are 6 examples of the colossal management failures leading to even more down-market positioning and flatline -to-decreasing revenues:
- 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)
- Pushed slot club sign-up to the cage (who signs up for player tracking AFTER gambling?)
- 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)
- Removed Cash Slot Incentives for Club Riviera (now when you lose $1o00.00 at slots they offer a maximum $50 Credit at The Steakhouse)
- Slashed in-house entertainment to a fourwall premise and no unique draw.
- Repeatedly marketing on a room-discount-basis, rather than a Special Event basis
 |
| 16 minutes for Oatmeal at Poolside Cafe |
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:
- Hire an Outside Direct Response Marketing Agency to Oversee Revenue Development
- Deploy Proven Marketing Tactics to Raise Gaming per Occupied Room Night
- Develop 12 More Annual Special Events, Slot Tournaments & Promotional Campaigns
- Enhance Slot Club Value & Hire Staff to Implement
- 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
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.
No comments:
Post a Comment