Make us your home page
Instagram

Column: A tale of two resorts: down-price beats upscale

This is not a good economy in which to take a gamble.

Las Vegas has, and it's hurting casino profits. Disney has not, and the Magic Kingdom is reaping the winnings.

In theory, it's not supposed to be this way.

The gaming business often brags it's recession-proof because gamblers will always like to gamble, but amusement destinations historically have see their business get hard hit when wallets are pinched.

The upscaling of Las Vegas with its five-star hotels, restaurants and shops, and the down-pricing of Disney to more value-oriented park packages and hotels over the past decade has turned that concept on its head.

Plunging housing prices and soaring costs for gas and food have made Americans more mindful of their spending.

Yet, Walt Disney Co.'s theme parks and resorts have enjoyed success. They helped increase the company's fiscal second-quarter earnings by 22 percent from a year ago, to $1.13-billion, or 58 cents a share. Analysts had been expecting 51 cents a share.

Revenues in the parks and resorts division shot up 11 percent to $2.7-billion during the quarter, a gain that was partially driven by an increase in foreign travelers visiting its U.S. parks to take advantage of the weak dollar.

But CEO Robert Iger also said the company's broader offering of lower-priced accommodations and vacation packages is helping.

Las Vegas has done the reverse. The famed Strip's cheap hotels and all-you-can-eat buffets are mostly gone, replaced by first-class resorts, fancy restaurants with celebrity chefs, luxury retailers and high-end spas.

Gambling, once the lifeblood of this desert mecca, accounts for 41 percent of Las Vegas' revenues, while 58 percent comes from sales of food, beverages, rooms and shopping, says a report from investment firm Deutsche Bank. That's the opposite of what it was during the 1990-91 recession.

"We were recession-proof when gaming was the No. 1 source of revenue," said Sig Rogich, who heads a marketing firm bearing his name that advises casinos. "Now the paradigm has shifted, and we get hurt."

Through the end of February, the number of conventions held in Las Vegas had dropped 10.4 percent, and average daily room rates were off 3.8 percent to $129.89 in 2008, according to the most recent data from the LVCVA.

Suddenly cheap is in, something Las Vegas has spent a decade running from. Maybe it's time the Strip took some lessons from "The Happiest Place on Earth."

DISNEY, DOWN-PRICING:

In 1991, more than 55 percent of hotel rooms at Disney World were premium priced. Now, about 75 percent of rooms are considered moderate or value priced. Fiscal second-quarter earnings are up by 22 percent from a year ago.
LAS VEGAS, UPSCALING:

Fancy resorts and restaurants, including this at Wynn Resort and Country Club, have mostly replaced the Strip's cheap hotels and buffets. Gambling revenues were down by 4 percent during the first two months of the year.

Column: A tale of two resorts: down-price beats upscale 05/13/08 [Last modified: Wednesday, May 14, 2008 11:03am]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Memorial Day sales not enough to draw shoppers to Tampa Bay malls

    Retail

    TAMPA — Memorial Day sales at Tampa Bay area malls were not enough to compete with the beach and backyard barbecues this holiday weekend.

    Memorial Day sales weren't enough to draw shoppers to Tampa Bay area malls over the long weekend. 
[JUSTINE GRIFFIN | Times]
  2. Austin software company acquires second Tampa business

    Corporate

    Austin, Tex.-based Asure Software acquired Tampa's Compass HRM Inc. late last week for $6 million. Compass focuses on HR and payroll.

    [Company photo]
  3. Hackers hide cyberattacks in social media posts

    Business

    SAN FRANCISCO — It took only one attempt for Russian hackers to make their way into the computer of a Pentagon official. But the attack didn't come through an email or a file buried within a seemingly innocuous document.

    Jay Kaplan and Mark Kuhr, former NSA employees and co-founders of Synack, a cybersecurity company, in their office in Palo Alto, Calif., in 2013. While last year's hacking of senior Democratic Party officials raised awareness of the damage caused if just a handful of employees click on the wrong emails, few people realize that a message on Twitter or Facebook could give an attacker similar access to their system. 
[New York Times file photo]
  4. Big rents and changing tastes drive dives off St. Pete's 600 block

    Music & Concerts

    ST. PETERSBURG — Kendra Marolf was behind the lobby bar of the State Theatre, pouring vodka sodas for a weeknight crowd packed tight for Bishop Briggs, the latest alternative artist to sell out her club.

    Sam Picciano, 25, left, of Tampa and Molly Cord 24, Palm Harbor shop for record albums for a friend at Daddy Kool Records located on the 600 block of Central Avenue in St. Petersburg, Florida on Saturday, May 20, 2017. OCTAVIO JONES   |   Times
  5. How Hollywood is giving its biggest stars digital facelifts

    Business

    LOS ANGELES — Johnny Depp is 53 years old but he doesn't look a day over 26 in the new "Pirates of the Caribbean" movie — at least for a few moments. There was no plastic surgeon involved, heavy makeup or archival footage used to take the actor back to his boyish "Cry Baby" face, however. It's all …

    This combination of photos released by Disney, shows the character Jack Sparrow at two stages of his life in "Pirates of the Caribbean: Dead Men Tell No Tales."  Johnny Depp, who portrays the character, is the latest mega-star to get the drastic de-aging treatment on screen
[Disney via Associated Press]