Many people who travel to Las Vegas think of the Strip. The opulent properties, luxurious amenities, numerous gaming options, and world-class entertainment provide visitors with countless opportunities to enjoy themselves. While the Strip is all of those things, it is, technically speaking, on the outskirts of the city. And in choosing to frequent the Strip exclusively, visitors are missing a vital part of the city that started it all—downtown.
In recent years, downtown Las Vegas has been undergoing a transformation, and today it is a viable, exciting place to see. The recently renovated Golden Nugget hotel and casino located in the heart of Fremont Street is an example of the ongoing revitalization projects being experienced there.
Last fall marked the completion of the Golden Nugget’s Rush Tower. The expansion marked the first time in 20 years that a new hotel was constructed in downtown. The new tower boasts guestrooms featuring feather/down comforters, upgraded pillow-top mattresses, and 42-inch plasma TVs. The rooms’ interior design displays warm earthtone browns on its walls and contemporary furnishings. The rooms also offer panoramic views of downtown and the Strip. The accommodations at the Golden Nugget are designed to give it the look and feel of a Strip property.
The Golden Nugget has maintained its AAA’s Four Diamond rating for 32 years and is one of only two resorts in Las Vegas to have earned a Four Diamond rating. One of its exquisite design centerpieces is its pool and lounge area. The outdoor pool is connected to the Tank, a 200,000 gallon live shark aquarium, which swimmers can actually take a water slide through a cutout tube in the middle of the tank. There is also a two level, infinity edge pool. Guests can sip cocktails poolside and enjoy the cabanas or day beds.
At the time of Rush Tower’s completion, Las Vegas Mayor Oscar B. Goodman said, “the debut of the new tower will not only add to the excitement but will establish Landry’s Restaurants (owners of the Golden Nugget) as a leader in the redevelopment of downtown Las Vegas.”
Justin McVay, public relations manager of the Golden Nugget, says the tower not only gives the property a greater operational capacity—with the additional 500 rooms, 2,300 overall—but it also offers guests an upscale lodging alternative. “It gives the casino a new feel,” asserts McVay. “If you haven’t been here in the last year, you are going to be blown away. We can suddenly reach people for this type of [luxury] option—not only for downtown, but Las Vegas.”
Downtown Attractions
In recent years, the Las Vegas city government has worked tirelessly to develop the downtown area. Some of the revitalization projects have included Freemont East, a designated three block area of Fremont Street set up as an entertainment district; Symphony Park, a mixed-use urban community; the Cleveland Clinic Lou Ruvo Center for Brain Health, a medical research center; and the World Market Center, its furniture mart for industry-related conferences.
For the casinos, the Fremont Street Experience (FSE) was conceived in the 1990s as a way to draw more people to the ailing downtown gambling area. The FSE is a cooperative venture, owned and operated by a group of downtown casinos. The city of Las Vegas remains involved with the FSE, since it is considered a city park. The multiple daily FSE light shows combined with the shops and street vendors give FSE a festival feeling.
The aforementioned Freemont East is anchored by neon signs announcing the area and houses several bars, restaurants, and shops line up in the area. Visitors can witness the juxtaposition of glitz with the gritty urban environs as they walk through FSE and Freemont East. While there are still glimpses of some of the problems that plague urban areas, such as homelessness and some vacated store fronts in the nearby areas, it is equally important to say the city has made substantial gentrification efforts in the best sense bringing more of the casino glamour that was part of the original Vegas. The city has spent millions to revitalize the area.
In addition, Mayor Goodman has been downtown’s biggest advocate and makes continuous efforts to attract visitors to the area. Mayor Goodman delivered his annual state of the city address at the Golden Nugget at the beginning of this year. The city’s multifaceted approach is good in the fact it is looking not just for the gamblers, but other visitors who might hold conventions or come to see downtown’s latest offerings.
The Economy, Recent Numbers
Las Vegas as a whole has been experiencing a bit of good and bad news. The nuances of the numbers paint more of a gray picture right now for the city. Occupancy, for example, was down last year. It was 81 percent for 2009, down from a record 95 percent in 2007, according to the Las Vegas Convention and Visitors Authority (LVCVA). In the midst of this downturn, the Golden Nugget’s neighbor across the street, Binion’s, closed its hotel last December, right as the Golden Nugget’s Rush Tower was opening. TLC Enterprises, which owns Binion’s, decided its sister casino, Four Queens, also in the area still would maintain its hotel accommodations.
However, more recently, the LVCVA reported 3,199,541 people visited the city this past April, compared to 3,171,043 visitors in April 2009, resulting in a 0.9 percent increase. Although this is not a huge increase, it is a sign of the times that things are getting better albeit at a slower rate.
In terms of revenue, the Golden Nugget is one of five casinos currently inside the city limits that are earning more than $72 million. This is an important distinction explains Frank Martin, gaming analyst, because it is a division point for how the gaming commission reports on the casinos. However, Martin points out two of these casinos are in bankruptcy proceedings and those two other casinos not on the current list dropped below the $72 million marker in fiscal year 2008.
Nonetheless, Martin says despite the problems encountered by some of its competitors, the Golden Nugget, “is probably the biggest casino business inside the city limits of Las Vegas, and it is the only one that is growing.”
Right now the financial performance is a bit better at the Golden Nugget with the addition of the Rush Tower—a $3.5 million increase for the first quarter of fiscal year 2010 from the first quarter of fiscal year 2009—but Martin cautions that the relatively conservative economic uptick at the Golden Nugget is indicative of the entire city right now including the Strip. He uses the example of Steve Wynn’s property, Encore, that recently opened up and how even with the addition of 2,000 rooms, several new restaurants and clubs, and a casino, overall revenue went down.
Value Offerings
It is important to point out the numbers to give a sense of the uphill battle downtown is facing, but again, it may not tell the whole picture. These bad news indicators from the Golden Nugget’s competition could be portrayed as worrisome trends, but the continuing efforts by Mayor Goodman and the Golden Nugget cannot be overlooked or underestimated. What is encouraging is both the city and the Golden Nugget are not content to rest on the work they have done thus far.
McVay says the Golden Nugget primarily markets to three areas: Texas, Hawaii, and what he calls, “the drive-in market.” “Landry’s is based in Houston, so we have a large footprint marketing-wise in the Houston and Galveston areas.” And this is a pragmatic approach not only because Landry’s is headquartered there, but also, as Martin points out, because Texas is the largest state to not have legalized casino gambling yet. Downtown casinos also have a long history courting people from Hawaii, and the Golden Nugget is continuing to actively court people from the Aloha state. One airline carrier, Allegiant Air, is about to start offering flights to and from Hawaii, and Hawaiian Airlines is going to start flying nonstop from Maui twice a week.
McVay says the Golden Nugget uses direct marketing mail to repeat customers as one of its marketing tactics. When the Golden Nugget finds out customers are drawn to the casino for certain tournaments, marketing staff can send messages touting upcoming events.
The Golden Nugget is also putting itself out there through high-profile events. It hosted the World Team Poker tournament in May.
Additionally, the Golden Nugget is staying competitive in terms of price points for both downtown and the Strip. “We have 500 new rooms here that are not like any other rooms downtown, and they are just as competitive as any major resorts you find on the Strip,” says McVay. “And you might save a pretty good penny by staying here. We still feel we offer a better value.”
Martin concurs, “I think the place [Golden Nugget] is a real bargain for consumers.” He uses a Strip hotel and casino as a comparison. “The Excalibur casino on the Strip had an average rate of $61 in 2009, and it is $29.99 for all day access to the buffet,” he explains. “You can get some rooms at the Nugget for as low as $39, the buffet is $11 for lunch and $18 for dinner, except on the weekend.”
It should be noted that the Strip and downtown properties do not typically compete with each other, according to Martin, with the exception of a few casinos on the north side of the Strip.
What the Future Holds
For anyone who has been to Las Vegas more than once, they can see the city is in perpetual motion with old casinos being torn down and new ones being built. There are plans for more to be done to downtown with new casinos and other development to increase convention business. Martin believes the recent addition of the ACE bus rapid transit, can shuttle conventioneers and visitors alike faster to their destinations. And with its upscale aesthetic and large room capacity, the Nugget could attract some additional convention business.
While they don’t absolutely depend on each other, the Nugget and downtown’s hopes are that they can feed off of one another and pick each other up. Whereas, the Nugget is looking to attract high rollers and repeat business, the city is trying to attract different types of people to downtown in a variety of ways. The city is trying to incorporate a mixture of entertainment, medical, business, and gaming options to give visitors a reason to come.
While some insiders may wonder if a viable downtown will be sustainable for the long term, ultimately, the jury is still undecided. We just have to wait to see how the next round plays out.