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UPDATE: Here Come The New Fees From MGM

By Chuckmonster on Wednesday, 5th August 2015 11:25am
  » filed under Las Vegas  comments: 22

   

You may wonder why we talk about the corporate end of things so much on VT. The answer is simple - the suits make the decisions that affect your Vegas trips in the future. This is where the story usually starts.

MGM Resorts International (owners of the casinos in the M Life program - MGM, Mandalay Bay, Excalibur, Luxor, NYNY, Monte Carlo, Aria, Mandarin Oriental, Vdara, Bellagio, Mirage and Circus Circus) discussed their quarterly earnings with investors.

MGM is embarking on a "Profit Growth Plan" that aims to reduce costs and increase revenue by streamlining hotel operations where possible and adding fees to some hotel services.

MGM is planning on monetizing existing hotel services by adding extra fees. For example - making service requests to the front desk, fridge rentals, equipment delivery, specific housekeeping requests, needing a hand to help move things or have the safe unlocked should you forget the combination.

The company also aims to realize cost savings by unifying hotel operations, products and processes by standardizing hotel offerings across all strata of operations.

A small example of this would be to offer only one brand of bathroom amenities and linens across all core properties instead of allowing individual hotels manage costs, ordering, selection and reporting processes. If you stay in any MGM core property, you'll get the MGM soap. If you stay in top tier properties, you'll get the luxury MGM soap. Co-branded properties (Delano, Four Seasons, Mandarin Oriental) would probably manage their own offerings.

MGM currently has eight versions of towels & linens across all of their properties. They've worked with hotel operations to develop an "optimum specification" to streamline procurement, reduce waste and reduce cost.

They've engaged in similar optimization process regarding food and beverage offerings. They hope to offer the best product, which Murren describes as "farm to table, organic, local", by using MGM's scale to bypass middlemen and negotiating prices directly with cattlemen, farmers and other providers.

UPDATE: we've heard from people in the know that a third strata - Luxury+ - will cover the absolute top tier of room categories - Skylofts, The Mansion, villa offerings at Bellagio and Mirage and perhaps the A.S.S.. These strata will retain custom amenities, linens and other offerings.

MGMRI believes that these changes will all happen behind the scenes with no visible impact to guests.



Tagged: mgm resorts international   hotels   amenities   fees   





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Comments & Discussion:

So does this mean that as a guest of say MGM I would be using the same soap as Excalibur or will they have different amenity tiers like MGM Budget Brand, MGM Deluxe Brand, and MGM Luxury Brand? Next time I spring for a Skyloft will my soap and linens be shared with Bellagio? If it is what is the point of spending all that money?

This is really crap on every level. Last trip I noticed MGM was cutting corners. My time at Aria Sky Suites and Bellagio confirmed that. When I left I was leaning towards time to go back to Wynn as my Vegas home or maybe trying Mandarin. This pretty much confirms it.

They best not take away that damn pyramid soap at the Luxor.

pk-
there will be two brands. core and luxury. if you are at skylofts, you get luxury. if you are at mandarin you get mandarin brand. if you are at luxor you get core.

Crap. If they raise fees then everyone else will raise fees. At what point is a free room going to cost $100 a night?

Peter-
There really never was such thing as a free room, you paid for it at the poker slots.

Ummm more central planning vs. local control. Uniformity, monotony and conformance thy name is MGM.

I wonder if the MGM Mansions will still have bvlgari soaps and such?

They say "core" and "luxury" so I would assume MGM Mansions will get the luxury brand whatever that is. I'm pulling for "Jim's Soap" but I don't think I have much of a say in it.

If they stop making the pyramid soap all is lost.

I tend to prefer my soap of the Bronner's (hippie crap) variety, but that Bvlgari soap they have in the swanky rooms at MGM is pretty damn wonderful.

Oh nononono... I'm a big fan of the Bellagio shampoo and will be royally ticked if I now have to get "MGM shampoo deluxe"

Interesting point though - I stayed at the B last week and did NOT get turn down service or the chocolates. I know turn down service is now marketed as an "add-on" but I stayed via the American Express FHR plan which included the turn down service the last 2 times I stayed there in April and last October.

They had also changed out the TV services and removed all the music channels. Disappointing as it was always cool to come back to the room with dimmed lights and slow jazz playing in the TV. The fountain show channel was there but muted at the start of the trip but disappeared altogether midway through... Hopefully that'll be back at least.

@Skywise I was at Bellagio two weeks ago and didn't get my second round of housekeeping either. Heck I didn't even get the room stocked with non refrigerated mini bar items when I checked in. I've stayed in nicer, better run Best Westerns.

@Chuck. The idea of spending $1000 a night at Skylofts and sharing the same soap and sheets with Aria or Bellagio is a no go for me. When paying that much per night you don't want to feel like another one of the heard, even if it is the Luxury herd. Wynn Tower Suites here I come.

As someone who has the luxury of staying in higher end hotels semi-regularly (thanks his job!). I would say that sheets and bath products are the visible drivers of the differentiation in the room product. Dig deeper and you notice the nicer mattress and plusher carpets and extra pillows in the closet. The problem is the average person will notice the basics. "Why in my $1000/night skylight do I have the same soap as a comp'd Bellagio room?"

I know nothing is free, but I would focus on differentiation... not only between your competitors, but within hotels in your same company to drive price points. Having only two levels of things that many people see as difference drivers makes people wonder what is the difference between X & Y. And the end state is you as MGM want them to pick the more expensive of the two hotels that you own.

So I call down for more towels, I get charged? Really? I hope I read that wrong

Are they TRYING to make me stay at the Mandy (i.e. Mandarin Oriental) and just get all my comps on the food bill?!?

The service fees seem like they were thought up this way:
"People are tipping our workers for these things. If we add a house charge to them, that money goes to the company instead. People will be less likely to tip with a built-in charge, but oh well!"

Like Wynn's pooling scheme, somebody probably thought that money going exclusively to the middle class and skipping the executive suites on down was unfair.

This plan doesn't quite reach total corporate synergy. Ideally, they should use the same products throughout the company.

For example, Bellagio and the other high-end props get new sheets, mid level get used, but laundered sheets from Bellagio and the low-end places get the used, unwashed sheets from, say MGM and Mandalay Bay.

Same with soap and shampoo. Fresh stuff at the high end and a wad of used soaps like grandma used to make at Excal.

He's not going far enough, there are tons of great ideas. Coin-op air conditioning, pay-per-flush...

I wouldn't be surprised if they installed soap and shampoo dispensers like Linq did at the low end properties (CC, Excal, Luxor, NYNY) while they spend an extra $0.10 a guest on the privileged guests of their higher end properties and give them bars of soap and little bottles.

Next, they can start charging a little more for every higher floor. For example "Oh hello sir, well for your Bellagio Lake View Room, that will be $199.00 a night plus resort fee and tax for floor 4. However, if you would like floor 5 that will be $200.000. Floor 20 is also available for only $230.00".

i can't believe this many people give one fuck - let alone many fucks - about soap.

@Pkluvsvegas
They already do - there's deluxe lakeview (lakeview from the main Bellagio building - standard "lakeview" must be a lakeview from the spa tower) and "premium" lakeview which is an up charge and loosely defined as "higher floors" but in my experience means anything 16th floor or higher.

@Skywise I know they do. What I am saying is slightly higher price by floor not just a grouping of floors. That is the natural progression of their nickle and diming people.

as a MGM employee its actually refresahing knowing that everyone is getting the shaft from murren and crew not just the employees it is so bad they have raised generics by 150%, insurance through the roof no raise in 8 years, and the employee dining room is border line...i cant even find the word amongst the 26 letter availble to describe it, what in gods name is a bean burger???? welcome to corporate vegas they made a deal to build city center with dubai and they want their money back thank your senator Harry and Murren, cause i doubt they pay for anything and after the deal Harry got them i would bet he wil be on the board at MGm when he is done



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