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Hotel Brand Name

The name game

Dr. Elinor Garely, eTN  Aug 10, 2010

(eTN) - Does it really matter if the name of the hotel is MGM Grand Inc., the MGM Mirage, or MGM Resorts International? To the guest it may not even be noticed – but it seems to make a huge difference to the MGM shareholders who approved the name change in June 2010.

It’s a Process
Apparently the idea to change the name started in May 2007 when the MGM Mirage Hospitality subsidiary was formed to identify new global markets. Macau was the first project. Known as the biggest gambling hub in the universe, Macau casinos generated revenue of approximately US$2.1 billion as of July 2010. With earnings larger than the budgets of some countries, the opportunity to develop a 50-50 partnership with Pansy Ho Chiu-King, the daughter of Hong Kong and Macau-based businessman, Stanley Ho, has definite curb-side appeal.

Currently the MGM has significant holdings in gaming, hospitality, and entertainment; owns and operates 15 properties (41, 451 rooms) located in Nevada, Missisippi, and Michigan; and owns 50 percent investments in four other properties in Nevada and Illinois, as well as Macau. In the next ten years, MGM Resorts Hospitality intends to manage 42 international properties in such destinations as China, India, and the Middle East.

Not Just Vegas
The Middle East financial interest in the MGM brand is quite evident by noting that the City Center, an unprecedented urban resort destination on the Las Vegas Strip, features as its centerpiece the ARIA Resort & Casino, a joint venture between MGM MIRAGE and Infinity World Development Corp, a subsidiary of Dubai World, an investment company that manages and supervises a portfolio of businesses and projects for the Dubai government.

Branding Decision
During a recent exclusive interview with Scott Voeller, vice president of Brand Strategy and Advertising, as to why the decision to change the name was happening – now – during an economic downturn and a decline in Las Vegas gambling revenue, Voeller commented, “The new name is part of an overall strategy to bring clarity to the product line.”

Top 25
Nominated among the “Top 25 Extraordinary Minds in Sales and Marketing” by the Hospitality Sales and Marketing Association International (2009), Voeller has a profound understanding of the Nevada casino landscape. Having been on both the agency and hotel sides of the equation, Voeller has been a partner in Nevada’s largest advertising agency where he developed strategic marketing campaigns for the Reno-Sparks CVB and the Nevada Commission on Tourism, and, as a senior corporate executive, held marketing and advertising positions with Mandalay Bay and the Luxury, as well as the Silver Legacy Resort and Casino.

MGM Resorts invested US$154 million to remodel 3,223 rooms, and the accommodations reflect the new wants/needs of the Vegas visitor, according to Voeller. Guests like to relax in their rooms, be entertained, shop, dine, and be pampered. The new MGM Resort room design addresses the changing profile. Attractive amenities include 42-inch flat screen plasma televisions, sleek furniture, pillow-top beds, cordless phones, MP3 docking stations, upgraded mini-bars, wireless Internet, and upgraded in-room safes.

It’s an M Life
The M Life Players Club is unifying the loyalty program and enhancing the customer’s experience. A US$15 million investment on technology and software links MGM properties and clearly defines a serious commitment to the project. M Life Club members have the opportunity to customize their own MGM experience through a tiered system that ties rewards to company brands.

The more you play the more you earn, and the higher your tier the faster accrued rewards are redeemable at 12 world-class resorts. In addition, there is a personalized website to help Players keep track of their points and benefits, as well as review exclusive offers. The Express Comps program permits players to comp themselves at MGM Resorts International via food and beverage outlets and entertainment venues.

Guest Spending
MGM may have lost US$1.291 billion in 2009 (US$3.41 per share), compared to a net loss of US$855.3 million (US$3.06 a share) in 2008, but hotel guests/ readers of the hotels’ magazine M, are spending freely at the rate of US$6.7 billion annually (i.e., dining: US$2.5 billion; retail: US$1.1 billion; entertainment: US$541 million; and gaming: US$2.5 billion).

Las Vegas Continues to Dazzle
Over 3 million people visited Vegas in May 2010, as increase of 2 percent from April 2010 and a 1.5 percentage increase since 2009. People come to Vegas (2009) for vacation/pleasure (40 percent), gambling (13 percent), and visiting friends and family (15 percent). Most visitors arrive by car (58 percent), while the remaining 42 percent arrive by air. Forty-seven percent of the surveyed guests indicated they used the Internet to plan their trip, with 69 percent making online hotel reservations and 58 percent using the Internet to book transportation.

In 2009, visitors stayed an average of 3.6 nights and 4.6 days with 96 percent staying in hotels or motels, spending an average of US$75.79 per night on lodging. Over the course of their stay, visitors spent an average of US$250.32 on food and drink, US$53.31 on local transportation, an average of US$101.97 on shopping, US$39.87 on shows, and US$5.77 on sightseeing. Eighty-three percent gambled during their Vegas visit, spending an average of 3.2 hours per day in the casino. The average gambling budget was US$481.57 (down from US$626.50 in 2005).

For time away from the tables and slots, Vegas visitors sought other entertainment and 64 percent went to a show (69 percent went to a lounge act; 18 percent selected comedy; and 19 percent went for a big name headliner). Vegas is doing something right – since the study reported that 94 percent of the visitors were very satisfied with their experience.

Vegas visitors are likely to be married (78 percent), earning US$40,000 or more (83 percent), employed (65 percent), or retired (28 percent). This is not a young market, and visitors are likely to be 40 years of age and older (72 percent). More than 50 percent of the current market lives in the western USA with the bulk from California (31 percent). Only 14 percent were from foreign countries ( ).

Fortune Tellers
Tourists, experienced hotel executives, and world financiers believe that there is a future for fun and investment opportunities in Las Vegas. The data shows that there is a need for new attractions, and entirely fresh target markets have to be identified if the area is to prosper. It is curious that while the Las Vegas Convention and Visitors Authority issued their findings in 2009, innovative plans have not been generated by those with heavy stakes in the economy.

Maybe it is too soon to read the tea leaves... perhaps there is a need to wait for the Obama stimulus package to be opened. Since President Obama advises “not to blow a bunch of cash” when the money could be used to fund a college education, it may take patience to find additional assistance coming from Washington; therefore, the hunt for a stimulus has to come from faraway places (like Macau and Dubai).

The name game
Scott Voeller, VP Brand Strategy and Advertising, MGM Resorts International


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