Wednesday, Feb. 25, 2009 | 2 a.m.
- Anthony Marnell III talks about how his "business plan has remained unchanged."
- Marnell talks about sticking to core values to make it through rough economic times.
- Marnell talks about getting back into the business.
- Marnell on collaborating with his father on the project.
- Marnell describes the interior of the M Resort.
- M Resort next in line for Marnell family (2-21-2009)
- Studio buffet highlights M Resort dining options (1-29-2009)
- M Resort to include nine restaurants (1-21-2009)
- M Resort licensing gets OK from gaming board (1-7-2009)
- M Resort asks for 11.5 more acres (10-20-2008)
- Up in the sky, a (moving) sign of suddenly desperate times (10-7-2008)
- M Resort to hire close to 2,000 (9-2-2008)
- It’s on Las Vegas Boulevard, but M Resort aims mostly at locals (8-11-2008)
Beyond the Sun
- M Resort will open to the public at 10 p.m. Sunday. For more information, call 877-M RESORT or visit themresort.com.
Built on a hill with a dramatic view of the Las Vegas Valley, the M Resort features a television studio for live cooking shows, an on-site pharmacy, a rooftop restaurant, the world’s largest mother of pearl ceiling and a modern design of inlaid wood and cantilevered glass.
But eye candy won’t sustain the $1 billion M Resort, which started construction two years ago when Las Vegas was booming and opens Sunday on the southeast corner of St. Rose Parkway and Las Vegas Boulevard South amid a recession with no end in sight.
While competitors grew into corporate giants by taking on billions in debt and building luxurious properties, Anthony Marnell III was taking notes on the dark side of the spending spree.
He saw hotels with automated methods of communicating with customers. He saw gambler swipe cards, points programs and loyalty club kiosks proliferate. He saw rising customer service complaints. He saw gamblers upset by reduced-odds table games and slot machines. He saw outrage over $15 martinis and $90 steak dinners.
His resort, he said, would be different.
Instead of a giant hotel, Marnell would build fewer than 1,000 rooms – about 400, in fact.
His company would be private, with one banker rather than a convoluted financing scheme with multiple loans and hundreds of lenders — all the better for resolving disputes and working through economic challenges.
He would screen potential employees for friendly personalities and put them through weeks of training. He would remind them to interact with customers in a way that’s required but rarely done at many casinos. Dealers must smile and greet potential players. Customers walking through the casino can expect a hello, or, if they look lost, a “May I help you?”
He would own and manage the resort’s restaurants and bars rather than outsourcing them to third parties, as many properties have done over the years to cut costs or gain specialized expertise. He would create value-oriented menus rather than letting third-party operators set prices based on their profit margins rather than the casino’s. He would offer free meals and drinks at any of his venues to any deserving gambler — loyalty card points be damned.
And there won’t be a $15 martini or a $90 steak anywhere in sight.
These aren’t new ideas. They are as old as Las Vegas. So old, in fact, that they’ve become myth.
In reality, few casino owners know the names of their customers, even their regulars. Many don’t spend much time walking their floors, chatting up employees and customers. They rarely hear and address complaints firsthand.
When the economy was booming, managers didn’t have to try as hard to win over customers. Eye candy — a new nightclub, show or restaurant — was enough.
Good customer service is harder for big casinos to pull off, especially with companies cutting payroll and other expenses, Marnell said.
Customer service and value have become critical in the downturn. These concepts, Marnell said, will be key to the M Resort’s survival.
“The casino owner’s ego is always talking about ‘mine’s bigger, better and newer and you haven’t seen it before,’ ” Marnell said. “People don’t care about all this bigger and better stuff. They come here with their hard-earned money — and every day they realize how hard-earned it is — and they’re going to spend it where they’re going to get value. They want to know that they are going be taken care of, and that you’re going to treat them like they want to be treated.”
With growing companies forced to streamline customer relations, most gamblers these days don’t get an audience with the owner or even the general manager, Marnell said. They enter a pin number in a kiosk that tells them whether they have racked up enough points in the casino pit for a free buffet or a show.
“That’s not what service is about anymore,” Marnell said. “Good customer service doesn’t necessarily mean more people, it just means having the right people and continually motivating people along the way.”
Jeff Voyles, a casino consultant and professor of gaming management at UNLV, says Marnell will have to deliver on his promises of high-quality customer service to succeed. While the margin for error in the casino business is smaller than ever, there’s still room for a more entrepreneurial, less-corporate approach to casino management, Voyles said.
“Service in Las Vegas was bad to begin with. Now it’s gone from bad to worse,” he said. With business and tips down, employees have even more reasons “to put their heads down when they go into work.”
Marnell has a golden opportunity to create a culture that values service over other goals, Voyles said.
The customer service that some big casinos lost sight of was key to the success of the Rio, which Marnell’s dad opened in 1990 to rave reviews, Marnell said.
Marnell, 35, learned the business from his father, who sold the Rio to Harrah’s Entertainment in 1999. As a 5-year-old, he recalls visiting his father at the coffee shop at the former Maxim, another casino owned by the elder Marnell, Tony.
Tony Marnell, who designed and built the M, also built the Mirage, Treasure Island, Bellagio and Wynn Las Vegas casinos for Steve Wynn.
The Rio boasted a hip nightclub and a loyal following of both locals and tourists. Like many casinos at the time, the Rio lacked much corporate meeting business, relying on repeat business from loyal gamblers.
“Gaming is high-touch, low-tech business,” he said. “We’ve gotten away from that.”
Now, the M Resort is luring corporate groups and other business with deluxe convention facilities. Results are mixed so far — good in light of corporate cutbacks, Marnell says, but slow.
Over the next three months, some rooms are available midweek for $59 and some weekends are sold out at rates above $150 per night. A few groups have bought up the entire hotel for their gatherings. Other nights are less than 10 percent occupied, Marnell said.
“We’re entering the perfect storm. It’s going to be very choppy.”
If business is a crapshoot, the odds, Marnell says, are slanted in his favor.
With a relatively small loan on his resort, Marnell says his building doesn’t have to perform as strongly as typical locals casinos that were financed during the real estate boom.
“We delivered the property two months ahead of schedule and under budget, so everyone’s happy,” at least for now, Marnell said. The bank wants to stick it out rather than take the money and run — to another developer — if things get rough, he said.
He expects some business from his nearest competitors — the South Point, Silverton and Green Valley Ranch — though his long-term goal is to grow the market with customers who don’t regularly patronize casinos and seek a “Mirage-like” experience off the Strip.
South Point owner Michael Gaughan says the M Resort will likely take more business from Station Casinos’ Green Valley Ranch than from his property because the M appears to be closer to Green Valley in luxury.
Unlike many casino owners these days, Gaughan, also a solo operator, isn’t encumbered by debt. He sold his Coast Casinos chain to Boyd Gaming in 2004.
Still, the going is rough for everyone.
“He’s a good operator. But it’s tough for all of us,” Gaughan said. “If times were good he’d have no problem.”
Now that times are bad, Marnell is focused on closing what he calls “a wide gap” between what customers are paying and what they are getting for their money. That, better odds and how to comp a dinner on a dime.
“You can’t standardize service,” he said. “If casinos continue to operate that way, guys like me will shred them.”