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Speaker 1: Pushkin. Welcome back to Risky Business, a show about making

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Speaker 1: better decisions. I'm Maria Kanakova.

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Speaker 2: And I'm Nate Silver.

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Speaker 3: Today in the show, we're talking about a decision that

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Speaker 3: Maria and I make frequently. In fact, Maria, of course

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Speaker 3: lives part time in Las Vegas, but that's a visiting

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Speaker 3: since city. I am about to head to Las Vegas

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Speaker 3: for my first poker tournaments and some Worldsas of poker,

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Speaker 3: Marie and I are both playing in the NAPUT North

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Speaker 3: American Poke Retur exactly. They might let some Euros, although

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Speaker 3: non North Americans some Brazilians not technically North America, they

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Speaker 3: might be there too, But November December, I'll be there,

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Speaker 3: hopefully running deep in some events.

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Speaker 2: I'm little rusty. How about you? Have you been playing

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Speaker 2: much lately or not?

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Speaker 1: No, I have not. My last poker stop was ep

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Speaker 1: TA Barcelona, so the European port Cotur. That was in

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Speaker 1: August and I haven't played since then. But the napt

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Speaker 1: obviously we do our disclaimer. I'm a Poker Stars Ambassador,

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Speaker 1: member of their Team pro. But this is an event

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Speaker 1: that is really near and dear to my heart. It's

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Speaker 1: their flagship in the US. And if you remember last

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Speaker 1: year at night I went incredibly deep final two tables.

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Speaker 1: I think I finished tenth or eleventh, I don't actually remember,

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Speaker 1: but it was one of those like really really frustrating

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Speaker 1: bust outs when like I don't remember how much I

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Speaker 1: cashed for, like between forty and fifty thousand, and first

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Speaker 1: place was like a million dollars and I was like, fuck,

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Speaker 1: you know, it's one of those It's one of those moments.

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Speaker 1: But yeah, today we'll be talking about the Vegas economy.

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Speaker 1: I'm actually already in Las Vegas. I'm recording this from

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Speaker 1: Lovely Resource World, which is where the event is taking place.

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Speaker 1: I'm in my hotel room there.

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Speaker 2: And so why are you in an apartment?

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Speaker 1: Because, Nate, when I have to play until very late

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Speaker 1: and we have to tape and then I have meetings

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Speaker 1: right after, I need a space that is not twenty

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Speaker 1: minutes away but actually right here.

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Speaker 2: Nice.

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Speaker 3: Well, one thing you might notice too, pertain to this

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Speaker 3: topic is that lately, for people who know what they're doing,

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Speaker 3: hotel rooms have gotten cheaper in Las Vegas. I was

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Speaker 3: able to stay at some places in summer for I know,

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Speaker 3: maybe fifty or seventy five dollars less a night than

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Speaker 3: I would have expected to pay.

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Speaker 1: Hi, it's so funny night. I'm gonna interrupt you for

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Speaker 1: a second, I thought you were going to end that

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Speaker 1: sentence at for fifty or seventy five dollars.

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Speaker 2: I'm like, whoa, whoa, whoa? Where are you like? I

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Speaker 2: say like, I say it, I stay, like where you stay?

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Speaker 3: I say it the middle plus chier plus right, I'm

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Speaker 3: not And there are places you can stay, you know,

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Speaker 3: with comps and stuff for dollars a night, right or less.

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Speaker 3: In fact, I I was booking hotels for the World Series, right,

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Speaker 3: and I noticed that there was a lot of availability

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Speaker 3: at relatively low prices, and so therefore I actually took

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Speaker 3: some money out of like some small gambling related stocks

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Speaker 3: and put them in Walmart instead. I'm like, oh, it

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Speaker 3: seems like the economy is And I don't usually do

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Speaker 3: that kind of active trading thing, right, but it felt

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Speaker 3: like this is a pretty unmistakable signal that demand is weakening.

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Speaker 3: I know those prices well enough where like I want

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Speaker 3: in particular hotels, but you're getting two hundred and twenty

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Speaker 3: dollars a night for a luxury hotel without any comps

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Speaker 3: or discounts, and I'm like, Okay, something is going wrong

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Speaker 3: in Vegas.

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Speaker 1: Yeah, and let's just say that there has been this

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Speaker 1: news cycle of like, is Vegas dead? And this is

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Speaker 1: a conversation that comes up every so often. Right, this

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Speaker 1: is not the first time that people have been having

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Speaker 1: this conversation, but people have been saying, you know, there

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Speaker 1: have been a lot of reports say, oh, visitations down,

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Speaker 1: this is down, this is down, Vegas is dying, Vegas

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Speaker 1: is over, blah bla bla. So that's kind of framing

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Speaker 1: the discussion. That's what we're going to be talking about.

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Speaker 1: Is Vegas actually you know, in a rough spot right now,

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Speaker 1: and we're going to actually be looking at the data

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Speaker 1: and using a more risky business lens as opposed to vibes.

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Speaker 1: And you know, man, the vibes just felt off night.

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Speaker 1: All right, let's get into some numbers.

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Speaker 3: Okay, So according to the Nevada Independent, I am doing,

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Speaker 3: by the way, Nevada, let's Nevada.

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Speaker 1: Let's get you clearnuncing it correctly.

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Speaker 2: For Nevada Independent.

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Speaker 3: For the Nevada Independent, I'm doing an event by the

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Speaker 3: way for them, I guess the weekend after next. I'm

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Speaker 3: a big supporter of their independent journalism. So you'll see

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Speaker 3: me there at IndieFest.

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Speaker 2: I believe it's called.

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Speaker 3: However, September saw the Strip record its first monthly gaming

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Speaker 3: revenue decline since May. But the nearly five point five

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Speaker 3: percent dip wasn't a surprise Las Vegas Boulevard's two largest

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Speaker 3: resort operators or shall they spin? Sorry, that last phrase

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Speaker 3: was mine. You know, a five point five five percent

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Speaker 3: drop is pretty material. The Gaming Control Board I'm now

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Speaker 3: cooting it again, said Wednesday that Strip game more when

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Speaker 3: you fell to six hundred and eighty seven point eight

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Speaker 3: million last month, not bad, primarily because of a forty

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Speaker 3: two point seven percent decline in high end baccarat income. Yeah,

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Speaker 3: so baccarat is a game. Have you played Brocrat?

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Speaker 2: Ever?

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Speaker 1: No, I've never played baccera. I know a lot about

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Speaker 1: it because, as you know, I'm working on a book

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Speaker 1: about cheating, and Baccara is a very popular game to

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Speaker 1: cheat because it is a game where the casino has

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Speaker 1: one of the lowest edges and if you are even

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Speaker 1: if you're not cheating, if you're a skilled baccara player,

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Speaker 1: it's where you can make the most money technically speaking,

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Speaker 1: But if you're cheating, then you know sky's the limit.

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Speaker 1: But this is the game where even though the casino

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Speaker 1: has the smallest edge, they actually make the most amount

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Speaker 1: of money because this is what the high rollers come for, right,

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Speaker 1: the big whales that come from Asia's Baca is their

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Speaker 1: game of choice. So even though the edges might be

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Speaker 1: smaller for the house, the total volume makes a huge

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Speaker 1: difference because when you have people betting, you know, thousands

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Speaker 1: and tons of thousands and hundreds of thousands of dollars

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Speaker 1: at hand, Shit gets real.

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Speaker 3: No what I mean the house that just like zero

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Speaker 3: point ninety percent. Baccarat is a funny game. I actually

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Speaker 3: play in the pits and often maybe maybe maybe twice

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Speaker 3: a year, there'll be a friend when I'm out in

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Speaker 3: Biga for something else, like, oh, let's go do this,

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Speaker 3: and like, you know, you're geting a little expected value,

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Speaker 3: but you get you get drinks and helps your rewards points.

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Speaker 3: I think once or twice a year is the optimum outcome,

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Speaker 3: at least for me.

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Speaker 2: Right.

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Speaker 3: Bacarat is interesting in that there's no actual decision made

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Speaker 3: by the player. Whereas craps you roll the dice a blackcheck,

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Speaker 3: you have decisions to make right. So in principle, if

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Speaker 3: you're playing those games optimally, the house edge, depending on

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Speaker 3: the rules set, can be lower. But anytime you give

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Speaker 3: players a decision, they tend to make bad gambling bets

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Speaker 3: and or otherwise play non optimally. Whereas Bacarunt, it's just

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Speaker 3: you know, you slide a lot of money in and

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Speaker 3: you have a coin flip that slightly waited against you.

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Speaker 2: But yeah, it's a.

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Speaker 3: Game for pure gambling d Jens pretty much. However, it's

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Speaker 3: not just a high end that's being affected here again

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Speaker 3: back to Nevada Independent meanwhile, stripped that volume philt Nevada, Nevada, Nevada,

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Speaker 3: Sierra Nevada.

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Speaker 2: It's a Sierra Nevada mountains.

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Speaker 3: Meanwhile, visitor volume fell for the ninth street month according

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Speaker 3: to Las Vegas Convention, and this is authority declining eight

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Speaker 3: point eight percent, with justinner three point one million visitors

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Speaker 3: still a lot coming in September. Through nine months, Las

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Speaker 3: Vegas visitation is down eight percent from twenty twenty four,

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Speaker 3: which includes double digit declines in July and June, the

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Speaker 3: events that we were out there, or I was, at

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Speaker 3: least for.

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Speaker 2: The World Series.

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Speaker 1: Yeah, so last week a lot of the gaming companies

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Speaker 1: reported their quarterly earnings and they didn't.

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Speaker 2: Do that well.

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Speaker 1: Right, There wasn't good news, especially for Caesar's but also

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Speaker 1: for MGM, and we see them blaming a lot of things. So,

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Speaker 1: first of all, the MGM call was among the most

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Speaker 1: eyebrow raising that I've heard, and didn't listen to the

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Speaker 1: whole call, but I saw kind of some excerpts and

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Speaker 1: the transcript, and this is very rare, but the president

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Speaker 1: and CEO, Bill Hornbuckle, actually said shame on us. This

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Speaker 1: is a direct quote because he attributed some of their declines.

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Speaker 1: So some of it He's like, oh, yes, factors, you know,

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Speaker 1: summer was bad for everyone, all this stuff, blah blah blah.

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Speaker 1: Spirit Airlines has limited flights, which is true. Visitation is

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Speaker 1: down ate, as you just said. He said, but he

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Speaker 1: said that they basically lost the plot on pricing at

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Speaker 1: MGM properties, and we talked about that on the show

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Speaker 1: before when we were talking about you know, yes you

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Speaker 1: can get some room deals. But then there was kind

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Speaker 1: of an infamous thing at Aria someone posted a twenty

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Speaker 1: six dollars bottle of Fiji water. When they saw that

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Speaker 1: they were doing this, like you know, flexible pricing where

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Speaker 1: there were surge pricing basically at some times of day,

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Speaker 1: and your bottle of Fiji could actually cost twenty six

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Speaker 1: dollars apparently at Excalibur. I learned this from the earnings call.

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Speaker 1: I didn't know because I haven't been an Excalibur for

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Speaker 1: a while. I have been there for events, and I've

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Speaker 1: been there for what's what's it called that dinner with

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Speaker 1: like the fighting, you know, the where you with your hands,

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Speaker 1: whatever it's called. Anyways, I've been to Excalver for those things,

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Speaker 1: but I've never had Starbucks there. And apparently the coffee

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Speaker 1: at Starbucks was started at twelve dollars anyway, So he

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Speaker 1: said that they have now tried to price correct because

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Speaker 1: I'm quoting now quoting Hornbuckle quote, we should have been

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Speaker 1: more sensitive to the overall experience. And then he continues,

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Speaker 1: you can't have a twenty nine dollar room and at

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Speaker 1: twelve dollars coffee. We lost control of the narrative over

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Speaker 1: the summer. I think we would all agree to that

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Speaker 1: in hindsight. Now, in the moment people were trying to

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Speaker 1: tell them right, there was no in hindsight, like these

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Speaker 1: things were going viral. People were saying the prices on

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Speaker 1: the strip have become outrageous. Now I am a Las

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Speaker 1: Vegas resident. You know, I don't.

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Speaker 2: Call a vegan.

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Speaker 1: I'm a vegan. I'm a vegan baby spelled the same

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Speaker 1: way as vegan, except with a capital letter, which is

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Speaker 1: very confusing to me. But so as a resident, I don't,

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Speaker 1: you know, I don't feel it as much because I

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Speaker 1: don't really go to the strip for stuff. Right, I'm

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Speaker 1: on the strip when I'm playing poker, and that's it, right,

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Speaker 1: I don't. I don't actually do that much here. But

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Speaker 1: even for me, like I realized that a lot of

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Speaker 1: the garages have stopped offering free parking, which means that,

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Speaker 1: you know, I won't go there for dinner anymore. Usually

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Speaker 1: there's like, oh, if you're a Nevada resident, you get

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Speaker 1: like two hours free or something like that. But come on, guys, right,

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Speaker 1: that's something, but it's still kind of annoying. So there

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Speaker 1: are things that even affect locals. And I think people's

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Speaker 1: habits started changing and people got really mad, and there

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Speaker 1: was a segment of the population that was like, you know,

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Speaker 1: fuck you, Like I don't want to. And I think

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Speaker 1: this is crucial because sure, like you come to Vegas. Like,

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Speaker 1: you know, you're kind of a sucker when you're gambling,

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Speaker 1: but you have fun. You don't want to be treated

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Speaker 1: like a sucker. You want to be treated like a

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Speaker 1: human being who has a functioning mind and understands when

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Speaker 1: they're being taken advantage of. It's a horrible feeling, that

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Speaker 1: feeling of like knowing that you're being taken advantage of,

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Speaker 1: you're like, you know what, fuck you don't do that

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Speaker 1: to me.

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Speaker 3: No, And look, if you're an experienced traveler, then there

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Speaker 3: are various things you can do. Right number one, if

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Speaker 3: you're in the I don't want to sound like a shill.

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Speaker 3: If you're in these casino comp programs, even at the

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Speaker 3: lowest tier, they typically give you lower rates. Also, my

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Speaker 3: finding is that like Vegas, hotel prices are quite spiky

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Speaker 3: based on conventions or the events that are held near

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Speaker 3: the major properties.

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Speaker 2: Right.

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Speaker 3: If there's something big Allegiance Stadium, Ortemobile Arena right, that

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Speaker 3: might affect like Mandelaid Bay prices across the bridge from

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Speaker 3: the Raiders' games, right, Or if there's a big conference

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Speaker 3: at Venetian it might be more expensive. So my recommendation

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Speaker 3: is that like you know, you price shot pretty aggressively.

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Speaker 3: Don't just have like one property or loyal to you

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Speaker 3: can usually find good deals at least some options, you know.

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Speaker 3: But also like, yeah, there are little hacks where like

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Speaker 3: you will notice sometimes experienced Vegas travelers the day they

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Speaker 3: get in will come in with giant twenty four packs

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Speaker 3: of water and twenty four packs of Modello beer and

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Speaker 3: snacks and whatever else, right, because the Walgreens on the

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Speaker 3: step have relatively normal prices or whatever, right, whereas in

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Speaker 3: the casinos it's a lot more right, they're even like

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Speaker 3: little miniacs. If you feel like just walking around, maybe

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Speaker 3: you're waiting for a poker tablet, get up and have

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Speaker 3: a drink or something. You can go to like the

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Speaker 3: little kiosks where they sell supplies, right, and those are

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Speaker 3: like a little bit cheap, and if you go to

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Speaker 3: the bar, right, but just for little supplies and stuff.

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Speaker 2: Right.

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Speaker 3: You know, I'm person who's definitely of means, right, but

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Speaker 3: like it's almost a matter of spite. Sure, let's say

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Speaker 3: I need some fucking like socks because I'd never be

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Speaker 3: enough socks, oh ya. And the Vegas trips always stay

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Speaker 3: longer than I thought, And I go through the socks.

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Speaker 1: Right, you know that's really funny, Nate, I'm learning something

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Speaker 1: new about you.

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Speaker 2: I need to get this.

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Speaker 3: I'm just gonna go across the street to the Target

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Speaker 3: or walk Greens and buy socks because even though if

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Speaker 3: I'm like being hyper rational about like, yes, it's probably

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Speaker 3: worth it paying fucking thirty bucks for a pair of

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Speaker 3: socks in the gift shop, like it just defends.

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Speaker 2: Me, of course on some level.

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Speaker 3: And you know, look, the notion of Vegas is to

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Speaker 3: some extent like the easy life. Right, things are easy

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Speaker 3: and you're feeling good and casual about things, and that

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Speaker 3: might let you you spend a little bit more on

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Speaker 3: indulgences like gambling for example, or certainly you know, if

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Speaker 3: you go to like the high limit somewhere, they may

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Speaker 3: compt your drink because you're gambling big. But if not

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Speaker 3: the price of wine there's going to be a little

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Speaker 3: bit more expensive potentially. But like the the notion is

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Speaker 3: like kind of lower tier of like, oh, I can

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Speaker 3: have a room for fifty bucks. Yeah, if you're if

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Speaker 3: you're if you're paying every type of resort fee and

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Speaker 3: every water or beer costs a lot, you know, the

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Speaker 3: the load to middle end restaurants on the Strip are

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Speaker 3: are getting cycled out in favor of kind of high

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Speaker 3: end concepts.

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Speaker 2: And things like that. Right, there are options off.

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Speaker 1: The strip that by the way, Nate, that's another that's

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Speaker 1: another recession indicator, both in Vegas and in New York

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Speaker 1: when you see like all of these incredibly high end

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Speaker 1: steakhouses open and you're like, uh uh, you know we're

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Speaker 1: heading for a crush.

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Speaker 3: No, but like it partly reflects like some degree of

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Speaker 3: greed where you're optimized. You know, people a lot of

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Speaker 3: people roughly speaking, have like fixed budgets for expenses. I'm

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Speaker 3: gambling it they're going to spend in Las Vegas. Right,

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Speaker 3: maybe you have one big night out that you put

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Speaker 3: in a credit card, but like, you know, I feel

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Speaker 3: like I can afford to lose five hundred bucks on

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Speaker 3: blackjack and maybe you know you're probably gonna lose most

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Speaker 3: of the time, or bucca ut whatever else. Right, and

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Speaker 3: you're paying like thirteen dollars for a bottle of Fiji

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Speaker 3: and then and then your dinner, you're paying you know,

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Speaker 3: New York prices plus thirty percent. Again another hack if

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Speaker 3: you know it is like the ubers are pretty cheap

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Speaker 3: in Las Vegas. If you don't have a car, go

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Speaker 3: off strip. The food can be remarkably good and remarkably cheap, right,

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Speaker 3: But like, but you're not creating this ease of like

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Speaker 3: I'm going to have a place to place and there's

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Speaker 3: some good deals and I'm having fun.

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Speaker 2: Just the whole attitude seems kind of short sighted.

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Speaker 1: It's incredibly short sighted. And I think that all of

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Speaker 1: these you know, corporations are looking to maximize revenue, right,

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Speaker 1: and they sometimes will become short sighted to do that.

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Speaker 1: And I think that for Vegas, there was a really

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Speaker 1: important inflection point during COVID, right where Vegas shut down,

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Speaker 1: the strip shut down, properties cut staffing by huge amounts, right,

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Speaker 1: there was no room service for a long time, but

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Speaker 1: they even cut you know, valet, they cut everything, and

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Speaker 1: all of a sudden, their profit margins were much better,

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Speaker 1: and they were like, oh, this is good, this is

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Speaker 1: actually great. And then they're like, wait, maybe we can

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Speaker 1: keep doing this. And then also during the pandemic, when

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Speaker 1: they were when occupancy was like really really low, they

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Speaker 1: cut rates and they saw something they didn't like. So

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Speaker 1: what happened at properties like Caesar's and this is something

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Speaker 1: you know, I was here if you remember, for about

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Speaker 1: six months when Vegas was fully reopening, to report on that,

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Speaker 1: and so I learned kind of a lot about what

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Speaker 1: was going on on the ground and what we saw

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Speaker 1: in places like Caesar's. And I'm quoting Caesar's because I

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Speaker 1: actually had I talked to a lot of people at

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Speaker 1: Caesar's who described this to me. By people, I mean

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Speaker 1: staff like dealers, et cetera, they had very negative experiences

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Speaker 1: because the prices had gotten so low that they were

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Speaker 1: getting a customer that they didn't want right. They were

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Speaker 1: getting people who were mistreating the dealers, who were not

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Speaker 1: treating hotel rooms correctly, who were causing disturbances, who weren't

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Speaker 1: tipping like it was not the experience that they wanted.

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Speaker 1: And so there were two things that happened right at

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Speaker 1: the same time. We had the staffing meaning you know,

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Speaker 1: higher margins, staffing reductions meaning higher margins. And then we

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Speaker 1: also had this, uh oh, like if we reduce room

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Speaker 1: prices too much, things are starting to get bad. So

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Speaker 1: what ends up happening They start raising prices on rooms

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Speaker 1: and on other things so that they can get their

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Speaker 1: quote unquote target customers. Right, we don't want the rebel rousers.

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Speaker 1: We don't want the people who are you know, who

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Speaker 1: are yelling at the dealer and throwing things. We want

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Speaker 1: a slightly higher caliber of clientele. And at first kind

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Speaker 1: of that that works, right, they actually get exactly what

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Speaker 1: they want, and occupancy rates are going up because people

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Speaker 1: have been cooped up during COVID, and so it's this

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Speaker 1: amazing rebound mountain because everyone wants to come and gamble

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Speaker 1: and socialize in all of these things. But crucially, they

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Speaker 1: don't staff back up. And now I'm talking about all

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Speaker 1: of the properties because they're like, wait, we can operate

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Speaker 1: with fewer people. And so I don't actually know if

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Speaker 1: the numbers are one hundred percent accurate here, but my

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Speaker 1: feeling is that no properties actually went back to pre

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Speaker 1: COVID staffing even today, that everyone that even as they

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Speaker 1: ramped back up, it's still not at one hundred percent

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Speaker 1: of what it was. I might be wrong. I'm saying

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Speaker 1: this is what I think based on kind of the

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Speaker 1: research I've done. I know that this is true at

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Speaker 1: some properties. When you say all, you know, that's that

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Speaker 1: kind of sweeping statement might be incorrect. So this is

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Speaker 1: why I'm caveating it. But in general properties have not

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Speaker 1: staffed back up to the same levels, and then what

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Speaker 1: ends up happening is they try to They're like, ooh,

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Speaker 1: it worked, like we have high occupancy and we raise prices.

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Speaker 1: Let's raise prices a little more. Oh, you're telling us

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Speaker 1: that we shouldn't do this, that people are feeling exploited,

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Speaker 1: but they're still coming. Well, there's a lag right, there's

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Speaker 1: a lagging effect. And this is where the short sighted

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Speaker 1: this comes in, Like people will tolerate it for a

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Speaker 1: little bit, but then you start putting prices up even more,

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Speaker 1: being like, oh, where's you know, maybe they're totally priced

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Speaker 1: and sensitive. Hahaha, let's do this, let's do that. And

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Speaker 1: then suddenly it's like you know, the frog and the

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Speaker 1: boiling water, right, you're raising the heat a little bit,

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Speaker 1: and all of a sudden, your customers are like, what

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Speaker 1: the hell, right, look at my room rates, look at

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Speaker 1: my water, look at my coffee, and you're not treating

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Speaker 1: me as well. But because you don't have I have

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Speaker 1: to wait ten minutes at the valet, because you didn't

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Speaker 1: hire back an fla like, the experience is worse too,

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Speaker 1: what the fuck? And that is an appropriate reaction. So

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Speaker 1: I think that's what we're now saying.

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Speaker 2: And we'll be right back after this break.

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Speaker 1: Now, you know, in terms of Vegas as a kind

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Speaker 1: of barometer for the rest of the country, because it

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Speaker 1: often is, right like when there are bubbles, when we're

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Speaker 1: about to hit a recession, like when when things are

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Speaker 1: starting to get out of hand, Vegas is often the

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Speaker 1: place where you start feeling some of those things first.

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Speaker 1: It's human driven, right, It's a service economy, and it's

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Speaker 1: driven by kind of trends in general in individual habits. Right,

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Speaker 1: how are people traveling, what are they spending their money on,

396
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Speaker 1: what are they spending discretionary income on, how are they

397
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Speaker 1: kind of spending their leisure time? All of these things,

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Speaker 1: Vegas will start feeling that first. And so you know,

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Speaker 1: at the beginning of this episode, I've kind of made

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Speaker 1: a joke about high end steakhouses being a recession indicator.

401
00:21:04,604 --> 00:21:07,004
Speaker 1: It's not really a joke, right, There are things like

402
00:21:07,044 --> 00:21:09,604
Speaker 1: that where you're like, oh, you know, too many, too

403
00:21:09,604 --> 00:21:13,004
Speaker 1: many things like we're hitting peak right and you're going

404
00:21:13,084 --> 00:21:16,564
Speaker 1: to you're gonna see that fall off soon. I remember

405
00:21:17,404 --> 00:21:20,964
Speaker 1: a number of years ago going to Miami when Miami

406
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Speaker 1: was going through this was like maybe twenty two thousand

407
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Speaker 1: and nine, like post recession, and like really back when

408
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Speaker 1: I could stay at the Satai for like two hundred

409
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Speaker 1: dollars a night and this is a tie by the way,

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Speaker 1: is a hotel that's like over a thousand dollars a night.

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Speaker 1: But yeah, so Miami wasn't doing well and I just

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Speaker 1: saw abandoned luxury construction projects everywhere, right, Like it was

413
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Speaker 1: just it was just a graveyard for cranes and like

414
00:21:49,964 --> 00:21:52,924
Speaker 1: these half finished high rises. That was one of my

415
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Speaker 1: first real world experiences where I was like, oh, right,

416
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Speaker 1: when you see something like this, like that was probably

417
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Speaker 1: a sign beforehand that there was kind of a real

418
00:22:02,084 --> 00:22:05,964
Speaker 1: estate bubble. So since, you know, thinking about the economy

419
00:22:05,964 --> 00:22:09,924
Speaker 1: more broadly, there are certain things that we talked about

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Speaker 1: today that are Vegas specific, but then there are other

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Speaker 1: things that I don't think are like the Vegas is

422
00:22:14,844 --> 00:22:17,284
Speaker 1: dead narrative, but more of a Hey, there are some

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Speaker 1: troubling signs right in consumer sentiment and in the way

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00:22:21,844 --> 00:22:24,684
Speaker 1: that consumers are feeling right now in this part of

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Speaker 1: the economic cycle.

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Speaker 3: Yeah, it can be a leading indicator, right of consumer optimism,

427
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Speaker 3: although weirdly so it's a little weird.

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Speaker 2: It's a live by modal where like.

429
00:22:37,444 --> 00:22:39,644
Speaker 3: You know, in general, people feel like, I have money,

430
00:22:39,724 --> 00:22:41,484
Speaker 3: look to go and spend a bunch of money on

431
00:22:41,484 --> 00:22:43,484
Speaker 3: a Vegas trip, and then also to spend money gambling, and.

432
00:22:43,444 --> 00:22:45,044
Speaker 2: They want you to do both. Right.

433
00:22:45,764 --> 00:22:47,924
Speaker 3: No longer true that unless you're a VIP who is

434
00:22:47,924 --> 00:22:50,684
Speaker 3: guaranteed to gamble a lot. The hotels restaurants are no

435
00:22:50,724 --> 00:22:52,244
Speaker 3: longer just a loss leader.

436
00:22:52,444 --> 00:22:53,124
Speaker 2: Right, But.

437
00:22:54,604 --> 00:22:56,724
Speaker 3: You have to be feeling pretty optimistic about the state

438
00:22:56,724 --> 00:22:58,204
Speaker 3: of things to say I'm gonna go and have a

439
00:22:58,204 --> 00:23:02,044
Speaker 3: big boy's weekend or girls weekend, gotchelor at weekend in Vegas, right,

440
00:23:02,444 --> 00:23:04,684
Speaker 3: especially if it develops a reputation for no longer being

441
00:23:04,684 --> 00:23:08,724
Speaker 3: a budget destination but a luxury destination. That's part of it, right,

442
00:23:08,764 --> 00:23:15,484
Speaker 3: I mean, ironically, like some sin stocks and sin activities, cigarettes, booze,

443
00:23:16,004 --> 00:23:19,084
Speaker 3: dambling can go up when conditions are really bad because

444
00:23:19,124 --> 00:23:21,164
Speaker 3: people feel like fuck it, fuck it, you know, the

445
00:23:21,164 --> 00:23:24,004
Speaker 3: world's coming to an end, and will blow it in Vegas.

446
00:23:24,084 --> 00:23:27,124
Speaker 3: But we're kind of in this stagnation area where there's

447
00:23:27,124 --> 00:23:30,724
Speaker 3: been a lot of consumer pessimism for a long period

448
00:23:31,044 --> 00:23:31,564
Speaker 3: of time.

449
00:23:31,684 --> 00:23:31,924
Speaker 2: Right.

450
00:23:32,404 --> 00:23:38,484
Speaker 3: There is from some countries declining international travel too. You know,

451
00:23:38,524 --> 00:23:40,324
Speaker 3: I think poker players or at least some people I

452
00:23:40,404 --> 00:23:43,844
Speaker 3: knew that didn't want the experience of like going in

453
00:23:43,844 --> 00:23:46,084
Speaker 3: the United States and maybe being harassed by an immigration

454
00:23:46,124 --> 00:23:48,844
Speaker 3: officer set carrying all these I guess you probably wouldn't

455
00:23:48,884 --> 00:23:49,644
Speaker 3: cary that much cash.

456
00:23:49,724 --> 00:23:52,564
Speaker 1: Right, No, but there but the visa, the more stringent

457
00:23:52,684 --> 00:23:55,324
Speaker 1: visa requirements, how long you're supposed to stay, like having

458
00:23:55,364 --> 00:23:58,204
Speaker 1: to check in the fact that people were being detained

459
00:23:58,284 --> 00:24:01,604
Speaker 1: and sent away like it was. Yeah, it's something that

460
00:24:01,644 --> 00:24:02,964
Speaker 1: does deter people from coming.

461
00:24:03,124 --> 00:24:05,524
Speaker 3: Yeah, and that can be like a little bit precious, Right,

462
00:24:05,564 --> 00:24:09,644
Speaker 3: But you're relying on these vtps, let's be honest, you know,

463
00:24:09,764 --> 00:24:13,444
Speaker 3: East Asian countries and in particular for the most part, right.

464
00:24:13,324 --> 00:24:16,364
Speaker 1: Yeah, especially since baccaras you're leading revenue source.

465
00:24:16,484 --> 00:24:16,644
Speaker 2: Right.

466
00:24:16,884 --> 00:24:20,564
Speaker 1: The reason that the revenue growth that was seen in

467
00:24:20,684 --> 00:24:25,844
Speaker 1: Vegas over the last several months, not talking about these

468
00:24:25,844 --> 00:24:27,644
Speaker 1: reports that we were talking about there were bad but

469
00:24:27,684 --> 00:24:29,684
Speaker 1: before that we had some great growth and they were

470
00:24:29,684 --> 00:24:31,604
Speaker 1: all driven by Bacara, Right, And now we have a

471
00:24:31,604 --> 00:24:35,164
Speaker 1: bad month, and it's because Baccara is down. Like there

472
00:24:35,244 --> 00:24:38,124
Speaker 1: are certain things that you know, you you do need

473
00:24:38,164 --> 00:24:41,524
Speaker 1: to be you don't want friction, right, and we are

474
00:24:41,564 --> 00:24:45,084
Speaker 1: seeing things that are adding friction to the experience for

475
00:24:45,204 --> 00:24:46,724
Speaker 1: a lot of people. And I think that's true not

476
00:24:46,764 --> 00:24:51,004
Speaker 1: just to Vegas, but a visitation. You know, that's something

477
00:24:51,164 --> 00:24:54,364
Speaker 1: I think everywhere saw a decreased tourism numbers. New York

478
00:24:54,404 --> 00:24:57,364
Speaker 1: did like that, I know, but a lot of a

479
00:24:57,364 --> 00:24:59,964
Speaker 1: lot of places all over the country definitely felt.

480
00:24:59,804 --> 00:25:03,524
Speaker 3: The companies also struggle a lot with like pricing. So

481
00:25:03,644 --> 00:25:08,604
Speaker 3: these resort fees for example, right, God, yeah, I actually

482
00:25:08,644 --> 00:25:10,604
Speaker 3: the last time I student the WIN, I had some.

483
00:25:10,644 --> 00:25:14,124
Speaker 2: Promotion where there weren't resort fees.

484
00:25:14,564 --> 00:25:16,044
Speaker 3: But then you go to the gym and it's like

485
00:25:17,004 --> 00:25:18,604
Speaker 3: twenty bucks to use a gym, and there's like a

486
00:25:18,644 --> 00:25:21,124
Speaker 3: psychological thing where it's like, I mean, what was a reserve?

487
00:25:21,164 --> 00:25:22,964
Speaker 3: You probably forty nine bucks? Right, Like that was the

488
00:25:22,964 --> 00:25:24,404
Speaker 3: only thing I was using. I was doing it every

489
00:25:24,444 --> 00:25:26,364
Speaker 3: other day, right, So like it's actually a good deal,

490
00:25:26,444 --> 00:25:28,964
Speaker 3: but you feel like you feel like Nicola dimd And

491
00:25:28,964 --> 00:25:33,004
Speaker 3: then you know, shifting those equilibriums away where prices seem

492
00:25:33,044 --> 00:25:35,604
Speaker 3: more it's hard because like if most people are not

493
00:25:36,164 --> 00:25:38,684
Speaker 3: sweating the small details, right, they have some notion that

494
00:25:38,764 --> 00:25:41,684
Speaker 3: like there's always tacked on expenses and in veguess I

495
00:25:41,724 --> 00:25:44,404
Speaker 3: know those are particularly bad, right, But like you know,

496
00:25:44,924 --> 00:25:46,964
Speaker 3: if you're listed at two hundred and ten dollars a

497
00:25:47,044 --> 00:25:50,084
Speaker 3: night on Expedia and the other property is two hundred

498
00:25:50,084 --> 00:25:53,644
Speaker 3: and fifty and they're all inclusive, and you have fifty

499
00:25:53,724 --> 00:25:55,964
Speaker 3: six dollars in fees, you're actually more expensive. But maybe

500
00:25:55,964 --> 00:25:58,284
Speaker 3: you kind of prick people a little bit when they're

501
00:25:58,284 --> 00:26:00,684
Speaker 3: signing up, right, I mean that's kind of one aspect

502
00:26:00,724 --> 00:26:02,404
Speaker 3: of it. This is actually a place where like legislation

503
00:26:02,484 --> 00:26:04,764
Speaker 3: could do well, right, where it's like, okay, we can

504
00:26:04,804 --> 00:26:06,684
Speaker 3: break that eyqulibrium by saying you need to have more

505
00:26:06,684 --> 00:26:10,084
Speaker 3: transparency whenever you're selling an experience, right, that there are

506
00:26:10,164 --> 00:26:12,604
Speaker 3: not add on fees that are as are a default

507
00:26:12,724 --> 00:26:15,444
Speaker 3: are tacked on for for every customer.

508
00:26:15,484 --> 00:26:16,724
Speaker 2: I mean you have us with sports.

509
00:26:16,484 --> 00:26:18,644
Speaker 3: Tickets and and lots of other things too, right, And

510
00:26:18,724 --> 00:26:20,884
Speaker 3: like you know, you could have that better default. There's

511
00:26:20,884 --> 00:26:24,844
Speaker 3: a such general sense of like I remember like going

512
00:26:24,924 --> 00:26:28,204
Speaker 3: like Gibson Steakhouse in Chicago, right, and the steaks are

513
00:26:29,124 --> 00:26:33,524
Speaker 3: expensive by Chicago standards. Their wine list is not particularly

514
00:26:34,524 --> 00:26:36,804
Speaker 3: marked up. There's actually some good deals on the wineless.

515
00:26:36,804 --> 00:26:38,844
Speaker 3: I know it's like sounds like a stupid example. There's

516
00:26:38,844 --> 00:26:41,764
Speaker 3: like there's like an old school mentality of like you

517
00:26:41,804 --> 00:26:43,404
Speaker 3: are paying a lot to have a good experience and

518
00:26:43,444 --> 00:26:46,764
Speaker 3: to get in, right, and and you're paying a lot

519
00:26:46,804 --> 00:26:48,644
Speaker 3: for the steak and we're not going to nickel and

520
00:26:48,724 --> 00:26:51,604
Speaker 3: dimee you for for other stuff, right, You're paying a

521
00:26:51,684 --> 00:26:53,524
Speaker 3: lot for the good, high quality stuff.

522
00:26:53,604 --> 00:26:56,324
Speaker 2: Right, But like it's not you know, it's some I went.

523
00:26:56,204 --> 00:26:59,604
Speaker 3: To Carnegie Hall the other day and there the concession

524
00:26:59,644 --> 00:27:03,044
Speaker 3: prices are like not as marked up as at other

525
00:27:03,164 --> 00:27:04,964
Speaker 3: venues because and it just di it's like like it's

526
00:27:04,964 --> 00:27:07,484
Speaker 3: a classic experience, right, and like if I went a

527
00:27:07,524 --> 00:27:11,604
Speaker 3: little prosecco at intermission, generous nack of peanuts or something, right,

528
00:27:11,764 --> 00:27:13,684
Speaker 3: I'm still paying twice as much as I should, right,

529
00:27:13,764 --> 00:27:16,124
Speaker 3: but like not four times as much. And it's just

530
00:27:16,204 --> 00:27:20,244
Speaker 3: like the constant small irritation if you never feel like

531
00:27:20,244 --> 00:27:23,684
Speaker 3: you're getting like tweeted you know, well, you know, hey,

532
00:27:23,804 --> 00:27:24,564
Speaker 3: look these guys.

533
00:27:24,404 --> 00:27:25,004
Speaker 2: Give me a break.

534
00:27:25,004 --> 00:27:26,924
Speaker 3: I'm never I could have they could have charged me more,

535
00:27:26,964 --> 00:27:29,044
Speaker 3: would have paid more, but I'm paying a lot for

536
00:27:29,044 --> 00:27:31,644
Speaker 3: the experience. It's just I don't know, I it's exactly

537
00:27:31,644 --> 00:27:32,964
Speaker 3: the kind of stuff that you think would have like

538
00:27:33,004 --> 00:27:37,604
Speaker 3: a short term spreadsheet maximizing quality to it, that that

539
00:27:37,644 --> 00:27:41,284
Speaker 3: would have effects that accumulate over two, three, five, ten years.

540
00:27:41,044 --> 00:27:41,844
Speaker 2: Right, yep.

541
00:27:42,124 --> 00:27:43,884
Speaker 1: I think that's I think that's absolutely right.

542
00:27:44,044 --> 00:27:49,124
Speaker 3: Also, like all these interlocking rewards programs, on the one hand,

543
00:27:49,884 --> 00:27:54,044
Speaker 3: they can incentivize some consumers to gamble more or spend

544
00:27:54,084 --> 00:27:56,484
Speaker 3: more in the resort or whatever else. Right on the

545
00:27:56,484 --> 00:28:00,164
Speaker 3: other hand, like it can be frustrating.

546
00:27:59,644 --> 00:28:02,324
Speaker 2: When you're in line for an.

547
00:28:02,164 --> 00:28:06,764
Speaker 3: Overpriced brunch or something and then there's another line of

548
00:28:06,844 --> 00:28:10,644
Speaker 3: Diamond seven stars and another line and of super whatever, right,

549
00:28:11,004 --> 00:28:13,644
Speaker 3: Like that experience can be a bit frustrating. Steve win

550
00:28:14,484 --> 00:28:16,884
Speaker 3: at The Wind famously or not famously when I talk

551
00:28:17,004 --> 00:28:19,324
Speaker 3: to people for the book, right, he always thought, you

552
00:28:19,364 --> 00:28:22,084
Speaker 3: want to if you're coming to a luxury property like

553
00:28:22,164 --> 00:28:25,844
Speaker 3: the Wind, everybody should be treated like a VIP yep, Right,

554
00:28:25,884 --> 00:28:28,804
Speaker 3: And we understand that, like, yes, there's probably some tower

555
00:28:28,844 --> 00:28:32,244
Speaker 3: suite for the true Bacara degenerate VIP, but we don't

556
00:28:32,244 --> 00:28:35,164
Speaker 3: want too much tearing. And by the way, the Wind

557
00:28:35,244 --> 00:28:37,764
Speaker 3: is a place where like they seem to go the

558
00:28:37,764 --> 00:28:38,844
Speaker 3: extra mile for staffing.

559
00:28:38,884 --> 00:28:40,364
Speaker 2: Not that I've never had a problem there. I stay

560
00:28:40,404 --> 00:28:41,244
Speaker 2: these places so much.

561
00:28:41,444 --> 00:28:43,804
Speaker 3: I've had a bat experience at every Vegas retort at

562
00:28:43,804 --> 00:28:48,124
Speaker 3: some point, right, But you notice a consistently higher effort.

563
00:28:48,284 --> 00:28:50,244
Speaker 2: From staff, and you feel like.

564
00:28:50,564 --> 00:28:53,484
Speaker 3: Oh, yeah, this is this is a luxury that that

565
00:28:53,524 --> 00:28:54,644
Speaker 3: I'm being promised.

566
00:28:54,724 --> 00:28:57,924
Speaker 1: Right, Yeah, there's you know, it's psychologically. I just want

567
00:28:57,924 --> 00:29:00,724
Speaker 1: to pause here for one second. It's really interesting because

568
00:29:01,244 --> 00:29:05,364
Speaker 1: there's one school of thought which is like, oh, make

569
00:29:05,524 --> 00:29:08,484
Speaker 1: everyone see, you know, the seventh star diamond line, so

570
00:29:08,564 --> 00:29:11,564
Speaker 1: that they have they aspire to it, right, Like see

571
00:29:11,604 --> 00:29:13,764
Speaker 1: that if you like pay, if you play here more,

572
00:29:14,044 --> 00:29:15,964
Speaker 1: you get to cut the line. On the other hand,

573
00:29:16,004 --> 00:29:19,004
Speaker 1: like if you're waiting incessantly, it's really annoying to see

574
00:29:19,044 --> 00:29:21,644
Speaker 1: people who keep on cutting you, right, and it can

575
00:29:21,684 --> 00:29:25,204
Speaker 1: it can backfire. What the Wind does is actually, yes

576
00:29:25,284 --> 00:29:28,604
Speaker 1: they have exclusive, like incredibly high roller experiences, but you

577
00:29:28,604 --> 00:29:30,924
Speaker 1: don't really see it, right, Like there are suites that

578
00:29:30,964 --> 00:29:33,484
Speaker 1: are like it's their own check it, it's their own area, like,

579
00:29:33,484 --> 00:29:36,324
Speaker 1: it's their own everything. The really nice ones that are

580
00:29:36,324 --> 00:29:38,404
Speaker 1: on the golf course with the outdoor space, like that's

581
00:29:38,444 --> 00:29:41,804
Speaker 1: a it's a whole different thing, right, So yeah, it's

582
00:29:41,844 --> 00:29:44,244
Speaker 1: like it's a whole different part of the resort, so

583
00:29:44,324 --> 00:29:46,764
Speaker 1: when you go there, you do feel like a VIP.

584
00:29:46,924 --> 00:29:51,484
Speaker 1: By the way, Wind Resorts their properties in Macau saw

585
00:29:51,484 --> 00:29:55,244
Speaker 1: a revenue up nineteen percent from twenty twenty three to

586
00:29:55,284 --> 00:29:59,084
Speaker 1: twenty twenty four. And it's Vegas ones also group from

587
00:29:59,124 --> 00:30:01,724
Speaker 1: twenty twenty three to twenty twenty four, but less so

588
00:30:01,844 --> 00:30:05,404
Speaker 1: three point seven percent. But Wind was has been showing

589
00:30:05,444 --> 00:30:10,204
Speaker 1: actually kind of more more positive results. And I think

590
00:30:10,244 --> 00:30:14,204
Speaker 1: that those counter examples, including Macaw, by the way, it's

591
00:30:14,244 --> 00:30:16,764
Speaker 1: a chink in the narrative. A lot of people are saying, oh, well,

592
00:30:17,204 --> 00:30:20,044
Speaker 1: you know Vegas is dead and dying because of all

593
00:30:20,084 --> 00:30:23,124
Speaker 1: of you can now sports, but from everywhere, like online gambling,

594
00:30:23,124 --> 00:30:25,404
Speaker 1: et cetera. But that's I don't I don't think that

595
00:30:25,404 --> 00:30:28,084
Speaker 1: that's actually true, because we see that McCaw revenues are

596
00:30:28,124 --> 00:30:32,084
Speaker 1: actually like up for everything, for for all properties like

597
00:30:32,124 --> 00:30:34,844
Speaker 1: people are people are gambling in person like none other.

598
00:30:35,204 --> 00:30:37,684
Speaker 1: And regional casino revenue so that you're talking about someone

599
00:30:37,684 --> 00:30:40,124
Speaker 1: el et cetera, et cetera, regional properties are actually doing

600
00:30:40,164 --> 00:30:43,404
Speaker 1: really really well right like those those revenues are going up.

601
00:30:43,444 --> 00:30:47,044
Speaker 1: So even within Vegas, there are very different stories of

602
00:30:47,124 --> 00:30:51,404
Speaker 1: what's happening on the strip downtown and in casinos that

603
00:30:51,604 --> 00:30:55,324
Speaker 1: are locals, casinos that are you know, just you know,

604
00:30:55,524 --> 00:30:59,684
Speaker 1: scattered throughout Las Vegas. So we see very different revenue patterns.

605
00:30:59,804 --> 00:31:02,444
Speaker 1: But I just want to say that to the first one.

606
00:31:02,604 --> 00:31:05,444
Speaker 1: You know, psychologically speaking, you have to be careful, Like

607
00:31:05,444 --> 00:31:09,524
Speaker 1: there's a fine line between showing people something aspirational and

608
00:31:09,564 --> 00:31:13,124
Speaker 1: making them feel like you're treating them poorly and letting

609
00:31:13,164 --> 00:31:15,964
Speaker 1: other people get in front of them and you know,

610
00:31:16,084 --> 00:31:20,404
Speaker 1: really ruining their experience, and especially if you're paying a

611
00:31:20,444 --> 00:31:23,284
Speaker 1: lot already, then you want to be treated well, you

612
00:31:23,324 --> 00:31:25,684
Speaker 1: want to be treated like a VIP.

613
00:31:26,284 --> 00:31:29,484
Speaker 2: Yeah. There's basically three markets in Vegas. Right.

614
00:31:29,524 --> 00:31:33,044
Speaker 3: There's like the locals market, which is almost entirely all

615
00:31:33,084 --> 00:31:36,364
Speaker 3: striped and like it sounds like maybe some budget travelers,

616
00:31:36,404 --> 00:31:39,004
Speaker 3: but people who were in and around Las Vegas probably

617
00:31:39,004 --> 00:31:39,404
Speaker 3: lived there.

618
00:31:39,484 --> 00:31:39,684
Speaker 2: Right.

619
00:31:40,244 --> 00:31:43,164
Speaker 3: There's, on the other hand, the high end luxury market,

620
00:31:43,204 --> 00:31:45,884
Speaker 3: which has you know, wasn't as much of a thing

621
00:31:46,644 --> 00:31:49,164
Speaker 3: twenty years ago. Like people like Steve Wing have a

622
00:31:49,164 --> 00:31:53,084
Speaker 3: lot of responsibility for this. Uh, you know, you can

623
00:31:53,164 --> 00:31:58,324
Speaker 3: kind of subpure that into like you know, rich domestic

624
00:31:58,404 --> 00:32:02,004
Speaker 3: people who like to gamble and have fun, but also internationally,

625
00:32:03,124 --> 00:32:05,524
Speaker 3: you know, if there are options and the things like

626
00:32:05,524 --> 00:32:07,204
Speaker 3: international relations.

627
00:32:06,644 --> 00:32:08,604
Speaker 2: And how is the to get your money in and out?

628
00:32:08,644 --> 00:32:10,124
Speaker 3: If you're gaping a lot of money and you're like

629
00:32:10,164 --> 00:32:12,684
Speaker 3: a Chinese national, i' going to have a hard time

630
00:32:13,284 --> 00:32:14,004
Speaker 3: at a border.

631
00:32:14,164 --> 00:32:14,324
Speaker 2: Right.

632
00:32:15,204 --> 00:32:19,524
Speaker 3: Macaw goes through cycles where China seems to be encouraging

633
00:32:19,644 --> 00:32:22,804
Speaker 3: or discouraging more money to flow through there for different

634
00:32:23,044 --> 00:32:25,484
Speaker 3: actual or rumored reasons. Right, So that's part of it.

635
00:32:25,524 --> 00:32:30,364
Speaker 3: But like kind of this middle market has gotten squeezed

636
00:32:30,404 --> 00:32:32,284
Speaker 3: a little bit, and like, you know, if a friend

637
00:32:32,284 --> 00:32:37,484
Speaker 3: were to recommend, oh, I want a nice baseline experience

638
00:32:37,684 --> 00:32:40,484
Speaker 3: in Vegas where I don't feel nickel and dime, and

639
00:32:40,484 --> 00:32:42,524
Speaker 3: then I might indulge in a few things, Like I'm

640
00:32:42,524 --> 00:32:46,684
Speaker 3: not sure i'd have like a great propperty to recommend

641
00:32:46,724 --> 00:32:48,564
Speaker 3: them necessarily.

642
00:32:48,644 --> 00:32:49,924
Speaker 2: I don't know, I don't maybe, I don't know.

643
00:32:50,124 --> 00:32:54,204
Speaker 1: Yeah, I'd probably, I mean, i'd probably steer them downtown. Honestly,

644
00:32:54,404 --> 00:32:57,924
Speaker 1: I'd probably steer them to one of the newer or

645
00:32:57,964 --> 00:33:01,404
Speaker 1: remodeled properties downtown, like a you know, like a Serco

646
00:33:01,524 --> 00:33:04,804
Speaker 1: type of place that has a really nice sportsbook, that

647
00:33:05,884 --> 00:33:09,564
Speaker 1: has new restaurants. By the way, we mentioned this few

648
00:33:09,564 --> 00:33:13,924
Speaker 1: months back, but the Rio, you know, under new leadership,

649
00:33:14,204 --> 00:33:18,124
Speaker 1: has actually invested in renovating and has some like hot

650
00:33:18,164 --> 00:33:20,764
Speaker 1: happening restaurants and people like for the first time, Yeah,

651
00:33:21,044 --> 00:33:24,124
Speaker 1: for the first time. The Rio is you know, it's

652
00:33:24,124 --> 00:33:26,844
Speaker 1: been a joke. You know, we're we're poker players and

653
00:33:26,924 --> 00:33:30,404
Speaker 1: the Rio has you know, always been kind of a

654
00:33:30,524 --> 00:33:33,404
Speaker 1: dump when it comes to like the World Series and

655
00:33:33,524 --> 00:33:36,684
Speaker 1: all of that. Everyone was really happy when the World

656
00:33:36,724 --> 00:33:39,764
Speaker 1: Series left the Rio. There was an outbreak. I remember,

657
00:33:39,884 --> 00:33:43,004
Speaker 1: I think my first or second year playing poker, when

658
00:33:43,004 --> 00:33:44,604
Speaker 1: I was just starting to you know, when I was

659
00:33:44,644 --> 00:33:47,564
Speaker 1: researching the Biggest Bluff, there was a Lesionnaire's disease outbreak

660
00:33:48,124 --> 00:33:53,964
Speaker 1: for people staying at the hotel like bad, right, bad, Yeah, robberies,

661
00:33:54,204 --> 00:33:57,324
Speaker 1: but robberies happen on strip too, like man robberies. I know,

662
00:33:57,404 --> 00:34:01,204
Speaker 1: people who've been robbed in their hotel rooms at properties

663
00:34:01,324 --> 00:34:04,084
Speaker 1: as nice as the Blagio, like just just to be

664
00:34:04,924 --> 00:34:07,564
Speaker 1: to be perfectly candid like that. It can happen anywhere.

665
00:34:07,564 --> 00:34:10,284
Speaker 1: But yeah, but the Rio was especially bad. But now

666
00:34:10,324 --> 00:34:14,164
Speaker 1: people I think because they were trying to turn it around.

667
00:34:14,284 --> 00:34:17,004
Speaker 1: They started trying to make people feel better, right and

668
00:34:17,004 --> 00:34:19,964
Speaker 1: give them a better experience, and a little goes a

669
00:34:20,004 --> 00:34:24,564
Speaker 1: long way, right if you start doing a tiered service

670
00:34:24,604 --> 00:34:28,204
Speaker 1: of room service, like MGM properties did at some point

671
00:34:28,284 --> 00:34:31,084
Speaker 1: this year, I don't think. I don't know if Bill

672
00:34:31,084 --> 00:34:34,124
Speaker 1: Hornbook specifically mentioned this in his call, I don't remember,

673
00:34:34,284 --> 00:34:36,404
Speaker 1: but this is one of those like what were you

674
00:34:36,444 --> 00:34:40,604
Speaker 1: thinking missteps where they started having tiered room service where

675
00:34:40,644 --> 00:34:44,044
Speaker 1: if you wanted actual like plates and silverware and like

676
00:34:44,084 --> 00:34:47,004
Speaker 1: the stuff that you normally want when you order room service,

677
00:34:47,004 --> 00:34:49,484
Speaker 1: you had to order premium room service for like an

678
00:34:49,524 --> 00:34:52,444
Speaker 1: additional I don't remember twenty thirty forty dollars, and the

679
00:34:52,484 --> 00:34:56,284
Speaker 1: basic room service just came in takeout containers, and come on,

680
00:34:56,324 --> 00:34:59,724
Speaker 1: you're already paying ridiculous amounts for this room service. Like

681
00:35:00,164 --> 00:35:02,884
Speaker 1: that would make me feel like shit, right as someone's

682
00:35:02,924 --> 00:35:05,404
Speaker 1: staying there, and so a little goes a long way.

683
00:35:05,484 --> 00:35:08,524
Speaker 1: Just don't do that, right, Like you're actually, over the

684
00:35:08,564 --> 00:35:11,164
Speaker 1: long term going to have higher margins. Which is all

685
00:35:11,204 --> 00:35:14,844
Speaker 1: to say that those problems, though, are easily fixable, I think.

686
00:35:15,244 --> 00:35:18,644
Speaker 1: But for your friend who's looking at middle tier properties, yeah,

687
00:35:18,804 --> 00:35:21,204
Speaker 1: that's that's why I would say, like, maybe don't even

688
00:35:21,244 --> 00:35:24,724
Speaker 1: go on strip because it's really hard to find, like

689
00:35:24,764 --> 00:35:29,084
Speaker 1: a good experience where you feel good and unless like

690
00:35:29,964 --> 00:35:35,364
Speaker 1: you've found good rates, like it's possible, you know sometimes midweek,

691
00:35:35,484 --> 00:35:37,764
Speaker 1: like some really nice hotels, even like the Wind will

692
00:35:37,764 --> 00:35:41,204
Speaker 1: have rates that are really nice and you're like, whoa,

693
00:35:41,284 --> 00:35:43,284
Speaker 1: I can stay at the Wind for like one hundred

694
00:35:43,284 --> 00:35:46,364
Speaker 1: and something dollars a night, yes, please, right, but like

695
00:35:46,604 --> 00:35:50,724
Speaker 1: absent that like your baseline rates. Yeah, it's it's really

696
00:35:50,764 --> 00:36:12,404
Speaker 1: really tough and we'll be back right after this, okay.

697
00:36:12,444 --> 00:36:17,124
Speaker 3: I mean we mentioned the pandemic in passing. I do think,

698
00:36:17,164 --> 00:36:18,684
Speaker 3: in fact, I kind of had this thesis in my

699
00:36:18,724 --> 00:36:20,564
Speaker 3: book that there was like a lot of pent up

700
00:36:21,484 --> 00:36:27,004
Speaker 3: demand for bad quote unquote behavior and for risk taking

701
00:36:27,044 --> 00:36:32,764
Speaker 3: behavior and for socialization, like the scenes in Vegas in

702
00:36:32,884 --> 00:36:35,164
Speaker 3: like summer going into fall twenty twenty one. I mean,

703
00:36:35,204 --> 00:36:36,684
Speaker 3: there was one time when I, like I nearly thought

704
00:36:36,804 --> 00:36:38,604
Speaker 3: was going to get like there might have been a

705
00:36:38,604 --> 00:36:41,644
Speaker 3: crush on one of those pedestrian bridges right like Vegas

706
00:36:41,724 --> 00:36:43,924
Speaker 3: kind of swinging together back into life faster than their

707
00:36:44,004 --> 00:36:46,124
Speaker 3: places was like, it was a lot of fun for

708
00:36:46,124 --> 00:36:47,604
Speaker 3: a period of time, but things were also a little

709
00:36:47,644 --> 00:36:50,684
Speaker 3: bit a bit cheaper than right the long term trends.

710
00:36:50,764 --> 00:36:58,044
Speaker 2: I mean, you know since the pandemic. I mean, you

711
00:36:58,084 --> 00:36:59,684
Speaker 2: know there are things like, for example, people.

712
00:36:59,444 --> 00:37:05,004
Speaker 3: Are taking ozempic more. Yeah, that can reduce the desires to.

713
00:37:05,124 --> 00:37:07,444
Speaker 1: Hut and drinks and gamble.

714
00:37:07,164 --> 00:37:10,524
Speaker 3: Anyway and gamble a little bit, right there is I

715
00:37:10,564 --> 00:37:12,204
Speaker 3: would argue, like a little bit of a wave of

716
00:37:12,284 --> 00:37:15,604
Speaker 3: like prudishness. I mean, look, things are always sensitive at

717
00:37:15,644 --> 00:37:19,204
Speaker 3: the high end to like the crypto economy a little bit,

718
00:37:19,244 --> 00:37:22,004
Speaker 3: which has been good lately. Actually maybe that contradicts the trend.

719
00:37:22,044 --> 00:37:27,044
Speaker 3: But like, but you know, the preferences of like people

720
00:37:27,124 --> 00:37:31,244
Speaker 3: of means and you know, maybe that Vegas trip becomes

721
00:37:31,244 --> 00:37:32,884
Speaker 3: a ski trip because they're being a little bit more

722
00:37:32,884 --> 00:37:36,324
Speaker 3: health conscious or something like that, right, or maybe they

723
00:37:36,364 --> 00:37:40,204
Speaker 3: feel like you know, Vegas always struggle between do we

724
00:37:40,284 --> 00:37:43,364
Speaker 3: want to be family inclusive and gender inclusive? Or is

725
00:37:43,404 --> 00:37:46,644
Speaker 3: this for the bros? You know they struggle with that

726
00:37:47,164 --> 00:37:49,564
Speaker 3: a little bit. But you know, you know a problem

727
00:37:49,604 --> 00:37:53,164
Speaker 3: in lots of businesses is like you know, as a

728
00:37:53,164 --> 00:37:56,324
Speaker 3: middle aged forty something guy, right, like, you know, they're

729
00:37:56,404 --> 00:37:58,244
Speaker 3: kind of doing a good job to hold on to

730
00:37:58,364 --> 00:38:01,204
Speaker 3: those customers. But yet young people are different, The zoomers

731
00:38:01,484 --> 00:38:03,804
Speaker 3: are different. They may not be you know, first of all,

732
00:38:03,844 --> 00:38:07,084
Speaker 3: they're less sociable. In general, if you do not like

733
00:38:07,204 --> 00:38:10,484
Speaker 3: people they're in Las Vegas is not a good place, right,

734
00:38:10,524 --> 00:38:12,684
Speaker 3: and the whole mass of humanity. I mean, part of

735
00:38:12,724 --> 00:38:14,244
Speaker 3: why I like Vegas is because you get like a

736
00:38:14,924 --> 00:38:17,044
Speaker 3: real cross section. You do all types of contexts from

737
00:38:17,044 --> 00:38:21,484
Speaker 3: different people. I enjoy indoses the people watching in Vegas,

738
00:38:21,524 --> 00:38:24,884
Speaker 3: but like, but if you're a little bit agoraphobic, then

739
00:38:25,044 --> 00:38:27,324
Speaker 3: then that's not going to be the best experience.

740
00:38:27,404 --> 00:38:27,764
Speaker 2: And so.

741
00:38:29,564 --> 00:38:32,764
Speaker 3: Yeah, look, every business has to worry about about churn

742
00:38:33,084 --> 00:38:36,684
Speaker 3: or not acquiring enough new customers because a lot of

743
00:38:36,724 --> 00:38:40,124
Speaker 3: times you look at traffic to something and it's steady

744
00:38:40,164 --> 00:38:42,204
Speaker 3: and looks like all the same people are coming, right,

745
00:38:42,404 --> 00:38:45,004
Speaker 3: what's really happening into the surface is that like maybe

746
00:38:45,004 --> 00:38:47,404
Speaker 3: you have twenty percent new customers over six month period,

747
00:38:47,484 --> 00:38:51,404
Speaker 3: but twenty percent leave, right, and you tend to steady

748
00:38:51,404 --> 00:38:53,324
Speaker 3: state most of the time. Right, If one of those

749
00:38:53,284 --> 00:38:55,124
Speaker 3: two numbers gets off, right, and I haven't looked in

750
00:38:55,164 --> 00:38:57,244
Speaker 3: the details as much as it is, it is it

751
00:38:57,284 --> 00:39:01,004
Speaker 3: loyal customers not coming back, or my guess as it

752
00:39:01,084 --> 00:39:04,804
Speaker 3: might be more intimidating to like to new customers potentially

753
00:39:04,804 --> 00:39:07,604
Speaker 3: because if you're loyal in Vegas, then A you probably

754
00:39:07,644 --> 00:39:10,684
Speaker 3: have status, and b just this like street smart, so

755
00:39:10,764 --> 00:39:14,324
Speaker 3: like how to navigate and find the better experiences.

756
00:39:14,044 --> 00:39:14,844
Speaker 2: And the better deals.

757
00:39:14,884 --> 00:39:16,484
Speaker 3: Right, Like if I were your garde to Vegas, certainly,

758
00:39:16,524 --> 00:39:17,964
Speaker 3: if you were Marie, I'd be like, here are the

759
00:39:18,004 --> 00:39:20,484
Speaker 3: shows you should go to good absence, for example, here

760
00:39:20,524 --> 00:39:22,164
Speaker 3: are the restaurants should go to, most of which are

761
00:39:22,164 --> 00:39:24,364
Speaker 3: off strip yep. Here little hacks you can buy socks

762
00:39:24,364 --> 00:39:27,204
Speaker 3: and water and beer for cheaper than in the little

763
00:39:27,204 --> 00:39:31,004
Speaker 3: thing they have in the casino, right, and do these

764
00:39:31,044 --> 00:39:33,844
Speaker 3: four things and keep your points, and then that's great,

765
00:39:33,884 --> 00:39:36,924
Speaker 3: But like it's a little bit intimidating to new visitors.

766
00:39:37,044 --> 00:39:41,004
Speaker 1: Absolutely absolutely, And if you are someone who's kind of

767
00:39:41,044 --> 00:39:44,924
Speaker 1: young and planning, you know, a fun birthday, weekend, bachelor party,

768
00:39:45,004 --> 00:39:48,004
Speaker 1: whatever it is. In the past, you might have just

769
00:39:48,764 --> 00:39:51,604
Speaker 1: default said, oh, Vegas, right, that's the best place for it,

770
00:39:51,924 --> 00:39:54,164
Speaker 1: and now you might you might actually think twice and

771
00:39:54,244 --> 00:39:58,484
Speaker 1: actually look at other look at other things. So just

772
00:39:58,964 --> 00:40:02,684
Speaker 1: to kind of sum up everything we've been talking about,

773
00:40:02,924 --> 00:40:06,364
Speaker 1: let's answer the micro and the macro questions. First like

774
00:40:06,924 --> 00:40:11,884
Speaker 1: is Vegas dead? And second like, is what's happening in

775
00:40:12,004 --> 00:40:15,884
Speaker 1: Vegas an indication that kind of we should be worried

776
00:40:15,924 --> 00:40:19,044
Speaker 1: about broader economic health right now.

777
00:40:19,164 --> 00:40:20,964
Speaker 3: Like I said, I thought it was an interesting indicator

778
00:40:21,004 --> 00:40:23,644
Speaker 3: back in the spring and when consumer settlement really started

779
00:40:23,684 --> 00:40:26,364
Speaker 3: to go down, right, I think now that's more well

780
00:40:26,524 --> 00:40:29,164
Speaker 3: established across a wide brand new beta. Look, some of

781
00:40:29,164 --> 00:40:33,084
Speaker 3: it is cyclical. Vegas has always been highly cyclical, right,

782
00:40:33,124 --> 00:40:36,364
Speaker 3: this is like nothing new, And ironically Vegas a very

783
00:40:36,364 --> 00:40:40,084
Speaker 3: cyclical decisions to build these high end resorts. They might

784
00:40:40,084 --> 00:40:41,804
Speaker 3: take five or ten years to build and thirty years

785
00:40:41,804 --> 00:40:42,644
Speaker 3: to realize a profit.

786
00:40:42,884 --> 00:40:45,244
Speaker 1: I got a fun time blow. It was just a

787
00:40:45,524 --> 00:40:49,244
Speaker 1: was just a absolute cursed property. The number of years

788
00:40:49,244 --> 00:40:52,524
Speaker 1: it took to finally open was just mind numbing.

789
00:40:52,804 --> 00:40:55,124
Speaker 3: No, it's pretty hard to anticipate long term kind of

790
00:40:55,124 --> 00:40:59,804
Speaker 3: secular trends and desires for gambling and entertainment. But yeah, look,

791
00:40:59,844 --> 00:41:03,204
Speaker 3: I mean the look the younger generation is kind of

792
00:41:03,284 --> 00:41:06,844
Speaker 3: nitty and they're kind of introverted. Actually, and those epic

793
00:41:06,884 --> 00:41:10,524
Speaker 3: I think is material for some categories, like like restaurants

794
00:41:10,564 --> 00:41:14,804
Speaker 3: and booze related businesses, right like, And that's that all

795
00:41:14,844 --> 00:41:18,804
Speaker 3: seems like material to Vegas's bottom line and long run,

796
00:41:19,164 --> 00:41:22,484
Speaker 3: it is quite international, maybe not as much as some

797
00:41:22,524 --> 00:41:26,004
Speaker 3: American cities. But if the US becomes a less desirable destination,

798
00:41:26,084 --> 00:41:29,524
Speaker 3: I think there are some actual headwinds here.

799
00:41:30,124 --> 00:41:33,564
Speaker 1: Yeah, I would say that there are some troubling indicators.

800
00:41:33,604 --> 00:41:37,204
Speaker 1: I don't think Vegas is dead. I don't think Vegas

801
00:41:37,244 --> 00:41:40,484
Speaker 1: is dying. I think that Vegas needs to change some

802
00:41:40,644 --> 00:41:44,204
Speaker 1: of its habits if it wants to have long term

803
00:41:44,244 --> 00:41:48,884
Speaker 1: appeal and sustainability and be able to capture that demographic

804
00:41:49,124 --> 00:41:52,164
Speaker 1: that may want to just have a nice experience. But yes,

805
00:41:52,204 --> 00:41:56,564
Speaker 1: they're a kind of younger generation that has different habits, right,

806
00:41:56,604 --> 00:42:01,644
Speaker 1: and different points of oh, this is what makes me

807
00:42:01,764 --> 00:42:04,204
Speaker 1: want to go somewhere and actually spend money on a trip.

808
00:42:04,444 --> 00:42:07,044
Speaker 1: By the way, you know, in the past, we've had

809
00:42:07,084 --> 00:42:09,564
Speaker 1: these like Vegas is dying, et cetera, et cetera, and

810
00:42:09,604 --> 00:42:13,844
Speaker 1: we've had amazing innovators who've reinvented Vegas, you know, like

811
00:42:13,884 --> 00:42:17,084
Speaker 1: Steve Wynn most recently, who you know, realized that, oh,

812
00:42:17,124 --> 00:42:20,284
Speaker 1: you know, the old way of building casinos is wrong, right,

813
00:42:20,324 --> 00:42:22,484
Speaker 1: We're actually going to like let in light and like

814
00:42:22,564 --> 00:42:24,924
Speaker 1: do all these different things and change the way that

815
00:42:24,964 --> 00:42:27,924
Speaker 1: we make people feel. And it worked, right, and it

816
00:42:28,004 --> 00:42:30,724
Speaker 1: actually people who go to Vegas today don't realize like

817
00:42:30,844 --> 00:42:33,964
Speaker 1: what a huge change that was and how much it

818
00:42:34,124 --> 00:42:36,644
Speaker 1: changed the face of the strip. And so maybe you know,

819
00:42:36,724 --> 00:42:39,844
Speaker 1: there's someone coming up right now who will figure out

820
00:42:39,884 --> 00:42:44,124
Speaker 1: a way to really capture a lot of this younger

821
00:42:44,204 --> 00:42:47,044
Speaker 1: demographic in the meantime, I don't, you know, I don't

822
00:42:47,044 --> 00:42:49,764
Speaker 1: think it's dying, but I do think that there are

823
00:42:49,844 --> 00:42:53,204
Speaker 1: some troubling into kators throughout the entire US ecotomy and

824
00:42:53,684 --> 00:42:55,924
Speaker 1: especially in Vegas, like you got to treat people well.

825
00:43:04,084 --> 00:43:05,444
Speaker 1: Let us know what you think of the show.

826
00:43:05,644 --> 00:43:06,284
Speaker 2: Reach out to.

827
00:43:06,324 --> 00:43:10,564
Speaker 1: Us at Risky Business at pushkin dot FM. Risky Business

828
00:43:10,604 --> 00:43:12,924
Speaker 1: is hosted by me Maria Kanakova.

829
00:43:12,644 --> 00:43:13,964
Speaker 2: And by me Nate Silver.

830
00:43:14,604 --> 00:43:17,884
Speaker 3: The show was a cool production of Pushing Industries and iHeartMedia.

831
00:43:18,324 --> 00:43:21,644
Speaker 3: This episode was produced by Isaac Carter. Our associate producer

832
00:43:21,724 --> 00:43:25,484
Speaker 3: is Sonya gerwit Lydia, Jean Kott and Daphney Chen are

833
00:43:25,484 --> 00:43:29,644
Speaker 3: our editors, and our executive producer is Jacob Goldstein. Mixing

834
00:43:29,724 --> 00:43:30,524
Speaker 3: by Sarah Bruger.

835
00:43:31,124 --> 00:43:33,364
Speaker 1: If you like the show, please rate and review us

836
00:43:33,404 --> 00:43:36,044
Speaker 1: so other people can find us too, But once again,

837
00:43:36,204 --> 00:43:38,004
Speaker 1: only if you like us. We don't want those bad

838
00:43:38,044 --> 00:43:40,204
Speaker 1: reviews out there. Thanks for tuning in.