G2E: Marketing expert criticizes resort fees, says they will harm Las Vegas visitation in long term

October 17, 2019 10:00 PM
  • Buck Wargo, CDC Gaming Reports
October 17, 2019 10:00 PM
  • Buck Wargo, CDC Gaming Reports

A marketing expert rallied against the resort fees charged by Las Vegas casino resorts at G2E on Wednesday, saying the fees damage the resorts’ brands and warning of the potential long-term consequences of keeping away younger visitors.

Story continues below

UnMarketing president Scott Stratten, in his keynote speech on The Age of Disruption, criticized casino executives for instituting the fees to pad the bottom line with what he said is “little regard” for their impact on guests.

“We’ve decided we’re going to charge our guests for things that they already thought they were getting, and we’re not going to make it clear that they have to pay that fee when they check in or check out,” Stratten said. “Resort fees, if they are undisclosed at the time of purchase, are unethical. Every person has hated them as customers. I know why places do it; it’s free cash. But it hurts your brand if they’re not disclosed.”

Stratten referenced the lawsuit filed in July by the District of Columbia’s attorney general against Marriott International for what it called poorly disclosed resort fees. Analysts say the practice is widespread in Las Vegas.

“They’re your guests,” Stratten said. “They’re not a nuisance. You have to disclose these things. Instead of thinking I got a great deal on a $39 a night room, I’m paying $80. I don’t know what’s next with resort fees.”

Resorts are “delaying the outrage” and passing it along to frontline employees who do a lot to build a company’s brand, Stratten said. Guests are supposed to be “our world,” he said, and it’s important their experiences meet or exceed expectations. The bar doesn’t need to be set very high, he added.

“To be great in the gaming industry, you only have to be average, because everybody else sucks,” Stratten said. “Expectations have become so low that I am blown away by regular service.”

Casinos are pioneers of loyalty clubs, but player erosion is becoming a problem, and little things add up to players. Stratten said he was blown away recently when a casino host came up to him at a slot machine, gave him his card, and told Stratten to text him if he needed anything. He got his room incidentals, which totaled $370, waived.

“I wish I would have charged more (stuff) to the room,” Stratten joked, saying that the host also later comped him a room for a future trip. “It took me 92 trips and 13 years coming here for one person to make me feel special. I am a diva. I need to be treated well.”

Stratten said he and his wife still love Las Vegas, despite themselves, but there are looming problems. The city faces increased competition from across the country and around the world, especially now, with sports betting legalized.

“Las Vegas isn’t the only game in town. Vegas touts bachelor and bachelorette parties, but Nashville is kicking (your behind) in bachelorette parties. (The terrain is) shifting and that’s why the resort fee is so important,” he said. “You think we’re not talking to millennials? This is the problem. We have increased competition and less visitation, and now we’re going to throw something on top of it. That is the worst time possible for resort fees, even though they look great on a balance sheet. They will not look good in the long term, I can promise you.”

Regardless of industry talk about attracting millennials and concerns about changing habits and how to meet them, Stratten said age is overblown in dealing with customers. Companies have the ability to fix an experience, which is what’s most important to everyone. Age is irrelevant, he said.

“Millennials don’t need bells and whistles. They want to pay the price they thought they were going to pay and feel special. End of equation. Age has nothing to do with that.”