Las Vegas Sands cuts comps for middle-tier gamblers

7 February 2011

LAS VEGAS, Nevada -- Las Vegas Sands Corp. has eliminated free hotel rooms and other complimentary offerings for middle-tier customers at its two Strip resorts, a move one gambling expert called "a terrible thing."

High-end gamblers still receive benefits, such as show tickets and meals.

Company officials said the move was taken to drive the bookings of hotel rooms through group sales and Las Vegas Sands' alliance with InterContinental Hotels, which began marketing The Venetian and Palazzo through its 52 million-member rewards program last fall.

During Las Vegas Sands' fourth-quarter earnings conference call, company Chairman Sheldon Adelson said the elimination of comps has helped sell hotel rooms at The Venetian and Palazzo, resulting in a substantial increase in cash income.

"We know that the subject of comps has been played out all across Las Vegas, but we've taken a different position," Adelson said. "We've essentially cut out all our accounts except the most highly rated players. No more packaging deals to try to be competitive with others. There's no more comp rooms given out. There's no more food and beverage. There's no shopping credits. There's no restaurant credits. There's no showroom credits."

Gambling expert Anthony Curtis, who operates the Las Vegas Advisor website, said he heard rumblings over the past few weeks about the Sands' new comp policy. He said what was unclear is where the company was drawing the cut-off point.

"What happens to your slot club?" Curtis said. "The comp system is a very vast network. I've never heard of not comping the middle market. This could be a terrible thing."

Neither Curtis nor Union Gaming Group principal Bill Lerner had heard of other casino operators on the Strip instituting drastic changes in their complimentary systems.

"If they have, it's been much more quietly done," Lerner said.

Las Vegas Sands grew net revenues at The Venetian and Palazzo by 16.5 percent in the fourth quarter to $310.6 million, which was just 15 percent of the company's overall $2.02 billion in revenues during the period that ended Dec. 31.

The company said its adjusted cash flow in Las Vegas during the quarter was $80.6 million, an increase of 41.7 percent from a year ago. Las Vegas Sands officials said operating efficiencies and the reduction of comps contributed to an adjusted property cash flow margin of 25.9 percent.

Lerner said casino operators have tightened their promotional offerings over the past few years as a cost-cutting measure to deal with down revenues brought about by the economy.

The actions by Las Vegas Sands show the influence hotel operations have in the company's management structure. The shift toward group bookings helped Las Vegas Sands book 90,000 hotel room nights in January at The Venetian and Palazzo, which have a combined 7,000 rooms.

"There are more hotel guys in the organization than in the past," Lerner said. "The place is being run differently than it was in the past."

The 10-year deal between Las Vegas Sands and InterContinental also influenced the changes. The hotel company doesn't have a property in Las Vegas and the corporation's president said the Strip is the No. 1 requested destination by InterContinental customers.

"Our expectations for our InterContinental alliance are very high," Las Vegas Sands President Michael Leven said. "We're working hard on it, particularly on the technology side. We think that will fill a lot of the voids in the competitive environment and with probably the transient part of the marketplace."

Related Links
Nevada Online Gambling
Union Gaming Group Gaming Vendor Information
The Venetian Las Vegas Details
The Palazzo Resort Hotel Casino Details


Copyright GamingWire. All rights reserved.
Featured Vendors
Oklahoma Indian Gaming Association (OIGA) Conference
GamblersPick
Oklahoma Indian Gaming Association (OIGA) Conference
The biggest little show in Indian gaming! Save the date: August 12-14, 2024 Oklahoma City
GamblersPick
Share & Read other players' reviews! A top player community-driven portal for online casinos.
Top One Tech Limited
Players Pal
Top One Tech Limited
Global Touch solution partner of choice, 10+ years OEM manufacturing, 100,000+ units application
Players Pal
Revolutionize the way you connect with your casino players with the Players Pal mobile app
AmericanChecked
Talisman Group Creators of EZ Baccarat
AmericanChecked
Background checks for the gaming industry with key & non-key packages & fingerprinting solutions
Talisman Group Creators of EZ Baccarat
With over 800 tables in 150+ casinos, EZ Baccarat is the number one brand in baccarat.
House Tech Ads
Sunkist Graphics, Inc.
House Tech Ads
Drive quality casino-gambling traffic to your brand from over 70 countries from our premium assets!
Sunkist Graphics, Inc.
Specializing in the creation of best-of-breed gaming graphics - slot glass, sign faces, and more
Slot Machines Unlimited
TribalHub
Slot Machines Unlimited
Exporter of IGT, Williams, AVP, Trimline, Aristocrat, Konami, Bally, & parts over 20 yrs experience
TribalHub
25th Annual TribalNet Conference Sept 16-19, 2024 Westgate Las Vegas
Imagine This
Rymax Marketing Services, Inc.
Imagine This
Imagine This #1 Source for Player Gifts. Over $50 million in stock ready to ship! Let us serve you!
Rymax Marketing Services, Inc.
Leader in creating award winning player & employee loyalty programs & events proven to increase ROI
Shenzhen ZhengYuanTai Technology Co., Ltd.
Dable Advisory & Consulting Services
Shenzhen ZhengYuanTai Technology Co., Ltd.
14 years experienced gaming display manufacturer: open frame, curved, and halo monitors
Dable Advisory & Consulting Services
Advisory & consulting services services for Indigenous entrepreneurs, businesses & organizations
Casino City Press
Regulatory Management Counselors, PC
Casino City Press
A leading publisher and distributor of casino and gaming business data and market research reports.
Regulatory Management Counselors, PC
Over 45 years of experience serving the legal and regulatory needs of casino industry clients
Casino Network
Casino Schedule Ease
Casino Network
20+ years experience selling refurbished slot machines, parts & glass for all major brands
Casino Schedule Ease
Full Featured & customizable for the complex scheduling needs of table games & other casino depts
Betson Imperial Parts & Service
OCR - Online Casino Reports
Betson Imperial Parts & Service
Your one stop shop for all your gaming and OEM needs!
OCR - Online Casino Reports
Delivers highly targeted casino traffic from over 70 countries! Get your casino listed today at OCR!
Texas Slots & Gaming
Texas Slots & Gaming
Wholesale gaming reimagined. Texas Slots & Gaming is your sustainable gaming partner.


Your Guide to 14,931 Gaming Industry Suppliers