What is your impression of how Las Vegas is faring in this down economy? Where do you think Las Vegas is today?
Jones: I think where it is today is we hope we’ve bottomed out.
What do you see that indicates that that has happened?
Jones: The precipitous fall seems not to be so precipitous. It’s holding steady.
There are positive signs then. Can you be more specific?
Jones: Well, you’re just not seeing the tremendous fall in revenue, in bookings. You see people coming back. You see some of the meetings and conferences coming. People still are not spending nearly what they were before the economic meltdown, which gives us a whole new list of challenges. Because people are coming, they’re coming for bargain rooms, they’re coming with their coolers, they’re spending less on gambling and other entertainment, and yet our occupancies are still in the 90s, so you have the same customer service expectations.
What does that mean long-term? How is the gaming business fundamentally going to change because of that, or is it?
Jones: I think that eventually Las Vegas will come back. I think we’ll be at the end of the swing for a number of reasons. First of all, there have to be clear signs that the economy is truly stabilizing. Because if the consumer does not have economic confidence, vacations in Las Vegas are going be following their ability to pay for their home, their family, their food. So first you have to have clear indications that the economy is, in fact, stabilizing.
When the economy does stabilize, then what?
Jones: I think people come back to Las Vegas. You know, Las Vegas is an institution. It’s still the best value. It’s still the heart of gaming, not only in the U.S., but in the world.
Given the fact you’ve had to do a lot to get the people here, in terms of discounting, isn’t it going to be difficult to go back the other way?
Jones: Oh, I don’t believe that. I think Las Vegas always had a broad range of products. They had value products. They had high-end luxury products. To keep occupancy we’ve been packaging a lot of different experiences. But that never stays constant. Prices are what the market will bear. There still will be great values, but I just think things will stabilize.
How important is the convention business to all of this?
Jones: Convention is key. We built Las Vegas on a visionary model that really targeted the experiential, the vacation traveler, and then balanced that with the meetings and convention travelers, particularly mid-week. And that’s always been core to our success and will continue to be core to our success. And we hope that as American business stabilizes and begins to travel again, they remember that the best value for convention and travel is Las Vegas. There’s not another city that compares.
Are you seeing signs of that business returning?
Jones: A little. This is like awaiting spring. You’re seeing winter is over, and you’re awaiting the bloom.
How important is CityCenter’s opening?
Jones: I hope very important. I hope it brings customers. All of us should be very positive about the opening of CityCenter, but there’s no way to predict what that reality will be.
When you drive down the Strip and you go past Fontainebleau and Echelon what goes through your mind?
Jones: Well, with Echelon I’m reminded again about the real wisdom of [Boyd Gaming Chairman] Bill Boyd seeing where the market was going and realizing that completing that project at that point in time would not be in the best interest of the shareholders. I think he made a great decision. There is a time that he will complete the project, and again, I don’t think anyone can say when that happens. You know, with Fontainebleau, I hope the project gets completed, because having unfinished projects on the Las Vegas Strip is in nobody’s best interest.
What is Harrah’s strategy in Las Vegas going forward?
Jones: At Harrah’s it’s our same, very clear strategy, that we have a seven-stop strategy. We have some of the most diverse and best properties for gambling and/or entertainment in the city. We have linked them all with Total Rewards. We have embarked on all sorts of new marketing campaigns and sales campaigns to bring in a whole new type of meeting and conference business. We’ll continue to look for ways, center Strip, to build a project at the right time that adds another component of entertainment to the city. You know, we’re very bullish on Las Vegas.
Last year there was talk about Project Link at Harrah’s on the Strip. Where does that stand at this point?
Jones: We’re still moving forward and filling out that concept. We like the location, we like the ability to do something powerful, center Strip. Now that may not be in fact a new megaresort. We’ve talked about the Link and a “party district” and maybe a wheel like the London Eye, things that provide other elements of entertainment to bring people back to Las Vegas.
Conceptually speaking, can you sharpen that a little more?
Jones: If you look right at center Strip, really between Harrah’s and the Flamingo, it goes all the way back down to Koval [Lane]. Originally we talked about building a “party district,” which is an area where you have clubs and restaurants and maybe some pads for non-gaming hotels or specialty hotels. The London Eye project is intended to go in that space. But what you’re doing is you’re bringing a lot of different things for younger audiences, growth audiences, to come to Las Vegas and experience. And I think that’s what you’re going to see in Las Vegas. You’re going to see operators reinvesting in their properties. You’re going to see operators looking at how to build out existing entertainment in a meaningful way. You’re not going to see new $4 billion, $5 billion resorts. So it’s really about keeping your content current and fresh and the experience new and interesting. And I don’t think anyone does that better than Las Vegas.
Harrah’s has indicated it wants to acquire the Planet Hollywood resort on the Strip. Where does that stand at this point?
Jones: I’m not sure how much I can talk about that. We have begun. We’re hopeful that that comes to a favorable outcome. It’s a great property. It’s right next to our other properties and really allows us to continue with our strategy of linking a variety of different properties and experiences together as well as different concepts with Total Rewards.
As Las Vegas moves forward, do you see a new order, post-recession? Do you see a change in industry leadership and direction?
Jones: I don’t think you see a change in leadership. I think you see a little change in focus. I think it’s good that we’re getting new operators - Phi Ruffin, Alex Yemenidjian, even the opening of the Cosmopolitan. It’s sort of going back to the old Las Vegas prior to all of the big acquisitions. So instead of having three operators, now you have several operators. And operators who see the world a little differently and are looking to offer different kinds of experiences. That’s good for Las Vegas because it keeps it vibrant.
Are there other steps Las Vegas needs to take in terms of shoring up for the future?
Jones: I think we’ll all learn from this. Nobody will ever go back to doing business the same old way we did before. It forced innovation. It forced us to look at how you provide the highest level of service while managing your costs from an entirely different lens. It’s made us a lot more disciplined in how we commit our revenue and how we spend our revenue. So I think as painful as this has been, you’ll find that Las Vegas has learned a lot.