An interesting situation

Implications: The companies that have multiple properties in Las Vegas have an interesting dilemma

Analysis: I have spoken about this in various forums before but I see an interesting situation arising relative to companies with multiple properties in las vegas. Those companies that manage huge databases are actually cannibalizing themselves to an extent. Here is what I mean. Let's say that you are a Bellagio player and your win/loss per day is 5k and let's assume that in the past that made you a Bellagio customer. Now for whatever reason, recession problems in your business, gas prices, or foreclosure problems in your market, you cut back on your trips, what do you think the Bellagio direct marketing people are going to do. Basically they will say we are not getting enough 5k players so let's go down to 3k players and direct mail them an offer. This player (3k player) gets excited because he always got his offers from the Mirage (same company) but now he goes to the Bellagio. Now the Mirage people say well we have to go after the 2k customer because our 3k customers are going to Bellagio. Well, this 2k customer was a NYNY customer (same company) and now he upgrades. The essence of the story is that the odd men out are the lower end casinos of the particular company such as, Luxor (until they are done rehabbing the place), Excalibur and circus-circus get the remains of the database. So this is really what I mean when I say that these multiproperty companies are somewhat cannibalizing themselves. This would hold true for stations, boyd and harrahs as well. Very interesting as the rates continue to fall and promotions continue to rise to see how the bottom lines are effected.