Please write a case analysis regards to the success within the future of Las Vegas city. What makes Las Vegas so successful? can looks be deceiving and is this city not as glamorous as it appears? what trends are working towards its strengths, weaknesses, opportunities and threats? what does the future look for a city with such history?
December 1st, 2014
Las Vegas Case Study
By: Melody Behrens, Alex Lough & Mark Perez
Table of Contents
Appendices Page Number
Introduction ……………………………………………………………………………………. 3
Background ……………………………………………………………………………………. 3
Discussion ……………………………………………………………………………………… 4-5
Issues …………………………………………………………………………………………… 5
Solutions ……………………………………………………………………………………….. 6
Conclusion ……………………………………………………………………………………… 6
References ……………………………………………………………………………………… 7
Introduction:
Many know Las Vegas as the “city of sin,” or the “city that never sleeps,” and is recognized as a powerhouse within the hospitality industry. Whether the occasion of travel is strictly business at a convention, or if one is commemorating the loss of his manhood through a bachelor party, or even a simple family vacation where indulgences can be fueled through entertaining shows, delicious foods and beverages, electrifying night clubs, beautiful casinos, and a relaxing afternoon at the spa, Las Vegas quite literally has everything to fill one’s appetite. So what is it that makes Las Vegas so successful, even after so many years? Or can looks be deceiving and is this city not as glamorous as it appears? What trends are working towards its strengths vs, its weaknesses? And what does the future look like for a city with such history as Las Vegas?
Background:
The history of Las Vegas starts out in 1905 when the San Pedro, Los Angeles and Salt Lake railroad arrived connecting the city with the Pacific and the country’s main rail networks. Following this, the future downtown was platted and auctioned by railroad company backers, and Las Vegas was incorporated in 1911. In 1910, Nevada outlawed gambling all together, but the practice still continued in speakeasies and illegal casinos. 1931 became a very pivotal year for Las Vegas when gambling was finally legalized as organized crime began building roots in the city. The construction of the Hoover Dam began in 1931 drew thousands of workers to a site just east of the city. Casinos and showgirl venues opened up on Fremont Street, the town’s only paved road, which attracted the project workers immensely. When the dam was completed in 1936, cheap electricity powered the flashing signs of Fremont’s “Glitter Gulch” which was the start of what we know today as the “Freemont Street Experience.” In 1941, the El Rancho Vegas opened with other hotel-casinos not far behind. During the 1950s and 1960s, mobsters helped build the Sahara, the Sands, the New Frontier and the Riviera. This attracted tourists and by 1954 there was an average of 8 million people visiting a year. In 1966 Howard Hughes checked into the penthouse of the Desert Inn and never left. He ended up buying $300 million dollars’ worth of hotels, starting the rise of mega casinos. Then, in 1989 and for the next couple decades to follow the strip was transformed and old casinos were turned into new ones representing glamorous escaped such as Paris, Rome & New York. Casinos and entertainment has remained Las Vegas’ major employer, and the city has grown with the size of resorts and the numbers of annual visitors each year.
Today, Las Vegas is the most populous city in the state of Nevada. It is an internationally renowned major resort city known for gambling, shopping, fine dining and night life. It is the leading financial and cultural center for Southern Nevada. The city calls itself “The Entertainment Capitol of the world” and is well known for its mega casino-hotels and entertainment. The city has popular attractions in the downtown area located on the Fremont Street Experience as well as on the Las Vegas Strip (Exhibit 1), which is where the largest and most notable casinos and buildings are located.
Exhibit 1: View of the Las Vegas Strip
Discussion:
The planning, development and management of Las Vegas is a critical factor in determining their future. While Las Vegas is a booming city with a wealthy economy, they have experienced some struggles in recent years. By using a SWOT analysis we are able to see where Las Vegas’ strengths and weaknesses as well as their threats and opportunities.
Strengths:
- Well known image of destination
- Good infrastructure
- 81% annual repeat visitors which means a loyalty to the destination
- High tourism from close states in America
- Ability to provide a wide array of experiences
- Brand Recognition
- Attractive for the convention and meeting market
- A high standard of services
- Creates high employment
Weaknesses:
- Failure to capture other markets such as family tourism
- High competition with other places such as Atlantic City
- Online gambling becoming more popular
- Location of Las Vegas and natural resources limits growth
- “Gambling” image restricted to market segments
- Over 21 laws deter 18-20 year old travelers
Opportunities:
- Appealing to wider markets by adding new entertainment & attractions
- Cross marketing between night clubs, restaurants, shows, etc.
- Marketing to target markets specifically
- Maintaining the large amount of repeat visitors while also increasing new visitors (Exhibit 2)
- Taking advantage of new forms of technology to improve design
- Liquor regulations that are not as strict as many other states and cities
Threats:
- Development of other destinations around the world
- Access to natural resources
- Possible reduction in visitor volume
Las Vegas has been successful and held a strong competitive positon for many years and in order to do this for the future it will be extremely important to monitor their position in the market and figure out what is working versus what is not working.
Exhbit 2: A marketing tool in Las Vegas which is a sign requesting visitors to return
Issues:
After reviewing the SWOT analysis of Las Vegas, there are some easily discoverable issues that need to be solved. One of the major issues Las Vegas has had to deal with recently is the growing competition not only in the United States but also across the world. Due to this increased competition they have experienced lower hotel profits, visitor volume and gambling revenues. Because of this, Las Vegas is facing the problem of trying to reinvent themselves to stand out amongst their competitors. Another issue they have dealt with is that their target market pinpoints only a certain population of people. With a limited target market, profits and occupancy are limited as well. Las Vegas also faces the issue of increasing their amount of loyal customers. This goes hand in hand with the competition factor – if other people have closer places to travel to, they will most likely go to those places versus Las Vegas. With these issues, Las Vegas is struggling to keep their numbers as high as they have been in the past. It is clear that something needs to happen in The Sin City the question is just “What?” How can Las Vegas reinvent itself and cater to new trends, without losing its culture and history?
Solutions:
- Las Vegas needs to reinvent the customer experience.
- Needs to tap into other markets and cross-market.
- Needs to find a way to keep their loyal customers loyal, while continuing to gain others with the rising competition of other gambling areas and new trends.
Conclusion:
It is apparent that there are issues in regards to the success within the future of Las Vegas. New trends and competition of gaming are two simple examples previously discussed. However, Las Vegas’ high reputation and esteem will keep it from becoming so easily vanquished as many other “fad” and “trend” driven cities. In order for one to keeps its reputation, generally speaking, it is essential to remain true to one’s primary brand and structure, while still looking futuristically at ways of personal growth. Just like Las Vegas, its reputation can remain a success if this simple idea is kept in mind. Every industry, regardless if it is hospitality based or not, fears complacency and strives for its market to view it as a sanctuary where all can reside happily.
References
http://www.history.com/topics/las-vegas
http://www.forbes.com/sites/larryolmsted/2014/10/15/las-vegas-hottest-trend-reinventing-the-visitor-experience/
http://www.nytimes.com/2013/04/17/realestate/commercial/as-las-vegas-evolves-boutique-hotels-gain-status.html?pagewanted=all&_r=1&
http://www.reviewjournal.com/business/business-press/megaresort-trend-fades-companies-focus-luxury-small-settings
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