Las Vegas and its perfect business model

Las Vegas offers the ideal business model: it has developed a culture in which spending money is integral to the experience of being there, and where people expect very little in return for their squandered dollars.

Most people who visit Las Vegas, that gaudy tribute to capitalism at its sparkliest, go home with a lot less money but not a lot more things. To part with one’s cash is par for the course.

The casino waitresses offer you free drinks that will dampen your instincts, there are no clocks to remind you how late it is and no one suggests that you 'take it easy' until you throw in your car keys. Some casinos even pump oxygen into the pit area to keep people lively past their bed time.

To their credit, none of the Vegas casinos say they’ll make you rich, more that you’ll have a great time becoming poorer. And hundreds of thousands of people every year are totally fine with that.

The business of making people poorer is arguably more successful as a model than all the get-rich-quick schemes combined. A standard Las Vegas Casino hotel can cater for between 15,000 and 20,000 tourists at once, and even in credit crunched 2009, they are all full.

So full in fact there’s room for more and a building programme that began in earnest 15 years ago is still in full swing. Now it’s not just casinos but futuristically-designed luxury condos, mini theme parks and scale replicas of the world’s most famous landmarks.

Even if you don’t gamble, there are plenty of ways to decimate your wallet.

Few things are complimentary: at the MGM Grand broadband is $13 for 24 hours, breakfast is not included so you have to buy it at Starbucks (located on the ground floor between the slot machines and the gym-cum-spa, membership of which is $35 a day) and room service comes with tax, an admin fee and, of course, a tip.

Yet this system of charges, unavoidable costs and incentives to spend is not questioned, quite the opposite in fact. I can’t think of a comparable model anywhere in the world. It’s an incredible coup for the city, which on this basis will fuel structural and economic growth until people get tired of gambling. And that’s never by the look of it.

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By Dan Matthews  on   Jun 22,2009

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Keywords

Las Vegas    gambling    business model    Vegas    hotels   

Comments

YVONNE
YOUR ABSOLUTELY RIGHT PEOPLE WILL ALWAYS COME TO VEGAS IT'S THE LAND OF HOPE, AND WEALTH IF ONE HITS THE RIGHT NUMBERS, OR THE RIGHT SLOT MACHINE, AND THE ENTERTAINMENT IS FANTASTIC. Report Abuse

Bernice
Not everyone would agree with you, Dan, about the fact that Vegas is still booming. Have a look at this, which I can tell you is pretty accurate based on firsthand reports from my son who lives and works there. http://www.guardian.co.uk/business/2009/jun/26/las-vegas-citycenter-recession
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Dan Matthews
You're quite right Bernice. My observation of Vegas was from the week that I visited and based on - the fact that all the hotels were sold out and that their is a huuuuuuuge construction project happening in the middle of the strip. The town is growing quickly, but of course, there are underlying problems as you rightly suggest.
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