MGM Resorts To Charge Customers Parking Fees
MGM Resorts International, the biggest casino-hotel operator in Las Vegas has decided to make changes to its policies with regards to customer parking and recently announced that it will charge customers a fee going forward, a move that surprised many considering free parking was a perk offered to customers in the past in an attempt to get as many clients into their casinos.
MGM Resorts is now proposing to charge up to $10 for overnight self-parking at most of its properties on the Las Vegas Strip.
The rule will come into force from the spring of this year and MGM executives expect to add millions in additional revenue on a yearly basis.
This latest decision by MGM Resorts is in line with its history of pioneering new forms of fees. In 2008, MGM was the first to levy “resort fee” which is now charged by all casino-hotels on the Las Vegas Strip. Other Strip properties followed its lead after a period of five years and MGM Resorts expects something similar to happen over its new parking fee proposal.
MGM Resorts currently owns over 15 properties with 35,310 rooms and 37,000 parking spots on the Strip. Parking fees will be levied at Mandalay Bay, Delano, Luxor, Excalibur, Monte Carlo, New York-New York, Vdara, Aria, Bellagio, The Mirage and MGM Grand. Fees for hotels will be priced differently, so parking at some of the MGM hotels will be cheaper than others.
The company has stated that customers participating in MGM’s loyalty program will earn free parking rewards and that Clark County residents will get a grace period. Parking has been kept free in certain places like the Circus Circus hotel, the Crystals and Mandalay Bay Place shopping centers. Parking in MGM properties in other locations – Mississippi, Michigan and China will also remain free, atleast for now.
According to market analyst Alex Bumazhny of Fitch Ratings, this latest decision by MGM is in consonance with its decision to leverage the database of gamblers who are a part of their reward programs. Customers and locals have protested at the decision, promising to shift their loyalties to other operators as a response. Currently around 58 percent of visitors to Las Vegas are said drive into the city.
In a statement, Corey Sanders, chief operating officer, MGM Resorts said,
There’ll be initial backlash, but a month from now, three months from now, people will completely forget about it. In general, these decisions are really hard decisions to make, but I think we have enough positive things to say about it and are creating enough enhancements to justify it.
According to Sanders, although MGM has gone against the prevailing norm, competitors are likely to follow suit soon. With declining gambling revenues, casino operators are depending more on non-gambling activities for their revenues and might follow in MGM’s footsteps as the company derives close to 70 percent of revenue from non-gambling related activities such as its celebrity restaurants, high-end shops, shows and nightclubs.
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