When budgets are lean, casino resorts are winners

In tough economic times, event planners like Mitch Droge want more bang for the buck. For Droge, director of operations for the Louisiana Press Association, the 500-room Paragon Casino Resort in Marksville, La., fits the bill. The association will have its 2010 convention, for about 325 people, at the casino resort.

“We look for what a facility has to offer,” she said. “It’s more than a casino.”

Located in central Louisiana, Paragon is far more than a gambling institution, with a spa, six restaurants, three first-run movie theaters, live music and entertainment, indoor and outdoor pools, a children’s arcade area and even an atrium with cypress trees and alligators. There’s also 35,000 square feet of meeting space, recently revamped, that includes the Mári Showroom, with seating for  2,700 theater-style.

Droge first experienced Paragon when she organized workshops for 60 people there.

“It’s a good value, they have good customer service and rates, and they’re easy to work with,” she said.

Like Paragon, which added a convention center as part of a $150 million expansion and renovation completed in 2008, casino resorts are enhancing services in large part to attract meeting business.

“We have so much under one roof, something for every taste,” said Gina Rodigou, director of hotel sales for the 1,200-room Mohegan Sun in Uncasville, Conn.

The resort this summer debuted Bobby’s Burger Palace, a Bobby Flay creation, and Frank Pepe Pizzeria Napoletana, two of the more than 30 dining options. (Bar Americain, another Flay restaurant, was scheduled to open in November.)  On-property destination services can arrange golf outings and scavenger hunts with a Mohegan tribe theme. Shoppers can breakfast before hitting Tiffany’s — or Coach.

In Atlantic City, N.J., the 2,133-guest-room Tropicana Resort and Casino can add the boardwalk and the beach to its star attractions, which also include the Quarter, a shopping mecca with more than 30 stores.

Despite their multifaceted allures, casino resorts have been hit doubly hard by the economic downturn. In Atlantic City, gambling revenue in August plummeted to an 11-year low. And, as anyone in the meetings industry knows, meeting business is down, particularly in the corporate sector.

“I don’t know one property that is not affected in some way,” said Alonzo DiCarlo, director of sales and catering for the 507-room Pala Casino Spa and Resort in Fallbrook, Calif., a AAA Four Diamond property that finished a $100 million expansion this year.

To combat the economic slump, casino resorts are creating programs to make meeting planners feel like VIPS.

The rate stuff

In the negotiation process, rates typically come up early.

“Meeting planners are very educated consumers; there’s no doubt about that,” said Pam James, director of hotel sales for Tropicana Casino and Resort. “For 20 rooms, they can nickel-and-dime you to death. But 20 rooms is 20 rooms. We could lose a group over a $4 difference.”

Room rates are typically negotiable, depending on the guest count and the amount of money allotted to other areas, said Nadine Kowice, director of operations for the 131-room Sky City Casino and Hotel in Acoma, N.M., part of a complex that includes Sky City Casino, a conference center and Haak’ u Mu Museum.

“If they’re buying $1,000 in food, we would negotiate the rate to continue to share the profit with other enterprises” such as food and beverage, she said.

Some casino resorts tout their already low rates. “Our rates always been very attainable in Reno,” said John Carter, director of national sales for the 1,000-room Atlantis Casino Resort Spa in Reno, Nev. “We are a high-end property with amenities you can’t get in many hotels at half the cost. That makes us astoundingly affordable.”

Resorts on Native American land, meanwhile, can combine lower rates with other cost advantages. Guests pay no state tax or occupancy tax at Pala. There is no resort fee, fitness center fee or parking fee.

Packages and perks

Room rates are just the start.

“We’re much more flexible in terms of concessions and, more importantly, in attrition programs,” Rodigou said. “We understand that certain situations occur, and we work with clients.”

Instead of paying an attrition fee, for instance, the client may put that money toward a future program. “Each case is different,” Rodigou said. “We try to be flexible.”

Mohegan Sun recently created a complete meeting package with an all-inclusive price starting at $269 per person per night, based on single occupancy.

Paragon has a package aimed at board members. Available Sundays through Thursdays, it includes spa treatments, a low room rate, a complimentary meeting room and continental breakfast.

“It’s our first exposure to decision-makers,” said Marc Becker, director of convention sales. The package is about 75 percent off of regular rates and includes a $49 room rate on certain dates and upgrades that Becker called “generous.”

Pala this year promoted a 15 percent discount on food and beverage for bookings made during a specified time.

“We’re doing a little bit of everything to see what’s attractive,” DiCarlo said. Hesitant about creating specific packages, he instead asks meeting planners for a “wish list” and tailors a program to fit their needs.

Refreshments are among the enticements used to whet planners’ appetites. At Tropicana, groups that book 20 or more rooms a night receive a free soft drink refreshment break. The 503-room Horseshoe Southern Indiana in Elizabeth, Ind., offers a complimentary afternoon break to groups that book breakfast and lunch.

For government groups, Atlantis serves complimentary beverages in meeting rooms. “We will work with groups to put together unique packages that save taxpayer dollars,” Carter said.

A complimentary LCD projector and microphone, or other free audio-visual services, also serve as lures. Tropicana has given meeting clients $500 credit toward audio-visual services and complimentary Internet access in meeting rooms.

Hitting the jackpot

Of course, casino resorts can offer one particular perk that makes them distinctive: free play in their casinos.

This year, for instance, the AAA Four Diamond, 500-room Dover Downs Hotel and Casino in Dover, Del., started offering $25 worth of slot play to meeting attendees.

“It’s been pretty well received,” said George Fiorile, vice president and general manager of hotel operations. “Getting $25 of free anything makes people feel good, and people do use it.”

Generally, Becker said, meetings fall into three groups: Those who want nothing to do with the casino but still consider the venue a good value, those who don’t mind using the casino as an incentive and those who want to actively involve the casino in the event.

Paragon partners with groups in the last category to enroll new members in its Preferred Players Club in exchange for discounted services. Membership in the club is free. Club members earn points they can redeem for cash, meals and other resort amenities.

Meeting attendees are never pushed to join, Becker hastened to add. “We’re very respectful. We understand people are coming here for a convention.”

Groups in the second category might play up the casino theme with a poker or blackjack tournament. Mohegan Sun, for instance, offers Casino 101, which teaches attendees how to play the games. The resort will also set up games in a private area, so the players are limited to attendees.

Groups that want nothing to do with the casino gravitate toward facilities designed to accommodate them. At Mohegan Sun, the casino is distinct from the meeting space, and attendees need never walk on the casino floor to reach their destinations. Tropicana’s Havana Tower, an 18-floor hotel within a hotel, has its own parking, and there’s no gaming section in that area. More than 80 percent of the resort’s corporate clients elect to stay there.

“Many planners say that if attendees walk through a casino to get to a meeting, they’ll lose them,” James said.

Kimberly Kee is one of those planners. Kee, president of Kinetic Events, an event management firm in Castle Rock, Colo., recalled a meeting she planned at a Las Vegas hotel whose meeting rooms adjoined the casino.

Some guests were late to meetings or neglected evening functions altogether, both of which created a bad impression, as event attendance was already down. “It could affect the attendance at the next year’s event,” Kee said.

That was not the case at a Scottsdale, Ariz., property, where the casino was separate from the meeting facility.

“Meeting attendees were focused on the business of the meeting,” she said. “The overall integrity of our business objectives was maintained.” Some guests did hit the casino after hours, she added.

A pair of deuces

In Reno, Atlantis and the 1,635-guest-room Peppermill Resort Casino have taken a team approach to securing meeting business.

They are promoting their combined 2,635 rooms, 650,000 square feet of meeting space and 19 restaurants. The goal is to secure meetings of 800 to 2,500 people.

The resorts launched the program late last summer and immediately saw a flurry of increased activity, Carter said.

Location helped prompt the partnership. Atlantis is the only resort connected by a glass-enclosed sky bridge — built by Atlantis at a cost of $12.5 million — to the Reno-Sparks Convention Center and its 565,000 square feet of exhibition and meeting space. The center is less than a mile from the Peppermill.

Both casino resorts have undergone renovations and expansions. Atlantis’ improvements include the 30,000-square-foot Spa Atlantis, a new concierge hotel tower and a 14,500-square-foot ballroom, giving the resort 50,000 square feet of meeting space. “You don’t spend that type of money without being committed to the meeting business,” Carter said.

The Peppermill, which completed a $400 million expansion, also has a 30,000-square-foot spa and a health club.

Betting on Service

All the bells and whistles won’t work if the sales staff fails to serve the clients, experts say. “When you have service behind you, it makes it that much easier,” James said.

At Tropicana, where 80 percent of meetings are repeat business, including one group that has used the casino resort for 21 years, management is not resting on its track record.

“We are out there more than ever before,” James said of the casino’s marketing efforts. Paragon, which focuses sales efforts on Texas, Louisiana, Mississippi and Alabama, has added two convention sales professionals and restructured its banquet operations to accommodate meetings.

With slashed budgets, planners need a sales staff who can not only put dates on calendars but also think outside the box. “You can have creativity without a big budget,” said Rodigou.

Lack of response signals lack of interest

Yet some resorts are still resting on their circa-2007 laurels. Take Joseph Lipman’s experience. Lipman is president of  Cedar Grove, N.J.-based Summit Management, which provides corporate meeting planning and medical education services. Lipman decided to test the responsiveness of casino resorts to meeting groups and called several casinos in small markets in August. Many calls were met with voice mail or an out-of-office message. No one called him back.

“In this climate, if you don’t return the call immediately, you will lose the business to a competitor,” Lipman said.

Kee hopes that the cutthroat marketplace will serve as a wake-up call to properties that for so long have rested on their slot machines.

“While fun is always an added benefit, meetings have goals that they need to reach, and planners are often held accountable for reaching them,” she said. “If casino properties can support the planners in that effort, they will survive the economic downturn and come out the other side better for it.”