There is a lot of bullishness in the U.S. casino industry.
The Las Vegas locals and Downtown markets are booming and business at regional casinos continues to climb.
With a healthy economy and optimism for the expected beneficial effects of just-enacted federal tax reform, it looks like blue skies ahead.
But there are some indications that slipping enthusiasm for brick-and-mortar experience seen in other industries may be spreading.
We’re accustomed to retail stores losing customers to online, but declines are seeping into dining and entertainment businesses who offer experience, as casinos do.
Consider Cheesecake Factory, whose emphasis on customer experience supposedly insulates it from the slump suffered by casual dining competitors: third quarter same-store sales fell 2.3 percent.
Or Dave & Buster’s, so highly regarded for drawing millennial customers with game experiences that CEO Stephen King was invited to speak to his gambling counterparts at G2E in October: fourth quarter same-store sales plunged 5.1 percent.
Last year, despite all the favorable conditions in Las Vegas, visitation slipped 1.7 percent even though convention attendance grew 5.2 percent.
The declines were not just a lingering reaction to the tragic October shootings at Mandalay Bay, though that obviously had its effect. Visitation declined every month since June and accelerated. Factor out conventions and the annual decline would have been 2.7 percent.
It’s also worth remembering, much convention business is booked years in advance, while decisions of individuals better reflect their current conditions and preferences.
Further, the strength in the Las Vegas locals market may be mostly a reflection of the strong economy and 15 percent population growth. Indeed, per capita gaming revenue of $1,000 is 30 percent below its peak.
Now, not too much should be read into seven months visitation, especially when there are many surrounding positives and one-time and infrequent factors.
But it is worth noting trends to protect against complacency that might find you wishing you had paid attention to harbingers of change.
When Dave & Buster’s announced its same-store drop, surprised investors fled and the stock dropped 22 percent before making a partial recovery.
So, the important question is whether we are at the start of a long-term trend.
Jean Twenge, a psychologist specializing in personality and generational differences, has made headlines with her book iGen: Why Today’s Super-Connected Kids Are Growing Up Less Rebellious, More Tolerant, Less Happy–and Completely Unprepared for Adulthood–and What That Means for the Rest of Us.
Among her contentions is that youngsters born since 1995 comprise an iGen who have lived in a world where the smart phone has always been prevalent and that they act differently, including socializing and interacting less.
Assuming her premise is correct, it might have implications for older generations as more people of all ages now treat their cell phones as appendages and as texting replaces actual conversation.
One of the mega trends that has appeared to be a truism ever since it was postulated by James Naisbitt more than 30 years ago was “high tech, high touch.” The idea was that the more people are separated by technology, the more they want to make personal contact.
But that was before the age of the smart phone.
