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IN THE NEWS

Las Vegas Business Press
April 20, 2009

Who Will Fill Gaps In Social Safety Net? Maybe Casinos

By Ben Spillman

The Gold Spike Casino at Night
Night falls behind the Gold Spike in downtown Las Vegas. Owners of the property are offering free breakfast coupons to renters in Siegel Suites extended-stay apartment complexes, which they also own. The hope is that the free food will encourage people to stay and play the machines.

The Las Vegas economy has long been criticized as a one-trick pony.

At least it's a nimble little equine.

Try to name another regional economy that can adjust a core economic indicator as quickly and drastically as Las Vegas changes room rates.

As the recession continues, flexible Las Vegas businesses are going beyond cheap rooms and creating incentives for affordable housing tenants to pay rent on time or offering on-site access to medication, the types of actions folks typically associate with public assistance programs.

There's no question providing care for the vulnerable is among the noblest goals in public policy and government; charity and churches are the community's first responders for helping others.

But there are fascinating signs -- albeit small -- that the hyperevolving Las Vegas hospitality sector is creeping further into social safety net gaps that government is unable or unwilling to repair.

Take the Gold Spike downtown.

Owners of the blue-collar property are offering free breakfast coupons to renters in Siegel Suites extended-stay apartment complexes, which they also own.

The idea is to entice Siegel Suites residents, a demographic overlooked by higher-end joints, into the Gold Spike with free food in the hopes they'll stick around and play the machines.

The residents get five coupons when they pay a week's apartment rent on time, something most are already doing. If a resident pays a month's rent, he or she gets 20 coupons.

"You can eat free breakfast five out of seven days a week," says Michael Crandall, business-affairs director for the Siegel Group. "The same day we launched it, people were already coming in and redeeming the coupons."

The Gold Spike isn't the only place in town using basic necessities as a lure to attract gamblers.

M Resort, the swanky new locals joint on the southern outskirts of Las Vegas, has a pharmacy on property to make it easier for older customers and others to get needed medication without leaving the property.

Crandall says when times are tough, casinos need to be creative when attracting customers. That can mean offering inducements that speak to basic needs.

"In a time like today," Crandall says, "it is all about value."

A decision by the Las Vegas Convention and Visitors Authority on whether to renew a huge advertising and marketing contract with R&R Partners has folks talking again about the "what happens here, stays here" slogan.

The slogan, crafted by R&R, has achieved ubiquity in pop culture to the delight of boosters and the dismay of cliché-haters.

Certainly, with the authority spending $91.2 million this fiscal year through R&R, the boosters get better market research than Tourism Insider might provide.

But that won't stop us from sharing with you some feedback from real-life Las Vegas tourists who were gracious enough to share their thoughts.

"I don't think the 'what happens in Vegas stays in Vegas' is getting old at all," says Larry Carlson of San Onofre, Calif. "When I'm in Vegas, I get to let loose and become the person I want to be without fear of discipline or negative opinions toward my behavior since everyone I seem to meet is in Vegas for the same reason ... to just have fun without other people judging them."

Karen Rose of West Palm Beach, Fla., disagreed. She's sick of hearing it.

"When I return from a trip, and my co-workers will ask about it, they will say 'So did something happen that you can't tell us ... you know, what happens there stays there ... huh, huh, huh,' ('huh' being a dumb chuckle). I tell you I want to slug this person across their dumb face," Rose writes. "Nobody that actually goes there to party, or that has any possibility of being cool in any way, shape or form, says this anymore. It's kind of like saying "Vegas Baby" and "You're so money you don't know it." If you do say it, you're either a) from Kansas b) an old fogey trying to fit in or c) just ignorant and only know of Vegas from TV or movies."

Finally, Ken Oakley of San Jose, Calif., gives the slogan a positive review.

"I find them funny and memorable," he says. "People of course make fun of them often ... but I think that only helps the ads. You remember them."

At a time when they're needed most, overseas visitors are staying away from America. Not good news for Las Vegas.

The U.S. Travel Association lamented the situation after noting the U.S. Commerce Department reported international travel to the United States fell 8 percent in January. The drop came two weeks after the department noted 633,000 fewer overseas travelers visited the U.S. in 2008 than in 2000.

Much of the blame goes to extended bureaucratic procedures applied to foreign visitors after Sept. 11, 2001 and to reports of hostile treatment of foreigners by U.S. security officials.

It's not as if foreigners quit traveling. The number of non-Americans making long-haul trips increased by 48 million between 2001 and 2008. Had America simply maintained its pre-Sept. 11, 2001, visitation trajectory, it would have meant $182 billion in new spending and $27 billion in new taxes during that period, the U.S. Travel Association reported.