Today we peel back the curtain on the Las Vegas market with Mike Dominguez, SVP, Corporate Hotels Sales, MGM Resorts International.
Wednesday, March 06, 2013
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Las Vegas is resurgent. And for the first time in many years this market has a lot to be excited about. New projects are again happening, record numbers are coming in droves – and a few are spending too, and the meeting market seems to be making a comeback as well.
To find out exactly what is going on in what’s arguably the most dynamic hotel market in the country, we went to speak with Mike Dominguez, who is the senior vice president, corporate hotels sales with MGM Resorts International. He is fully on the pulse on what the market is all about and in this interview shares his thoughts on the current and future state of Las Vegas.
You can read the story below or listen to it is via the miracle of podcasting. OK, so miracle may be overstating it. But it is pretty cool to listen this interview while you are working, driving home, or making the kids dinner. Enjoy!
We recorded this interview during the second week of February, 2013 at Vdara, a hotel that is part of MGM’s CityCenter Complex.
Glenn Haussman: Thanks for coming here today. I’m loving what’s going on in Las Vegas now. It seems to me that that long, long night is finally over. The sun has come up and life is back, and let me tell you, it is packed here. What’s going on?
Mike Dominguez: Well, you know what? We are starting to see some stabilization in demand, and things are active, as you said. We’re starting to see a lotta people here, and it’s nice to be coming off Super Bowl weekend, and we have Chinese new year, so a lot of activity coming in. I think it’s important to note we’re gonna hit all-time records of visitors to Las Vegas, which is encouraging for us. The challenges we still have as a destination – we have 20,000 more rooms than we did in 2007, so it is –
Glenn Haussman: Catching up.
Mike Dominguez: Just a little bit.
Glenn Haussman: I see that you’re able to have some sort of absorption of those rooms in the city because the extra people. I think that the problem is still that – and I think the city’s adapting nicely to this – is how the spending is changing. People are spending less. They’re spending differently, and you guys are making changes to meet that, right?
Mike Dominguez: Absolutely, and where I think Vegas has really changed – and we’ve seen it especially in our group customer that they keep mentioning the focus on rooms, food and beverage and entertainment versus just casino and realizing that 60 percent of the revenues now being driven in these markets are coming from other avenues than just the casino.
Glenn Haussman: And that’s exciting for us, and ain’t that something, and I think the city needs to kind of really focus the fact that forever more gaining revenue’s now gonna come off the casino floor than on the casino floor in this particular market. Now, if we’re talking Macau, then I’m surprised anyone’s making any money off the casino floor, ’cause those people just love bellying up to the tables and staying there 24 hours a day.
Mike Dominguez: They always say they’re not addicted; it’s just their way of life. It’s just how they do it. But you’re exactly right, and that’s why you see the focus and the emphasis on some of the finest restaurants that you’ll find, and it was interesting. I just came back from London and I’m talking to a hotelier and it’s his comment to me that, “I go to Vegas now for the best dining experiences,” ’cause he thinks we kind of lead the charge. And it’s nice to hear from a European view.
Glenn Haussman: Well, let me tell you. There’s another segment that’s gonna be on this show. I got to talk with Jason Johnston, the executive sous-chef at Bellagio.
Mike Dominguez: There we go.
Glenn Haussman: We had an amazing meal at Sensi and talked all about how that’s coming up, so I think I’ll run that interview after this one, so maybe we can tease it here, right?
Mike Dominguez: Glad to tee that up for you.
Glenn Haussman: So we got that. We went to Jean-Georges, the prime steakhouse last night at Bellagio and just a lotta, lotta super world-class cuisine. But the way food and dining here is changing is interesting. I love the whole shift from the very, very high-end dining experience to more approachable casual cuisine yet still with great fresh ingredients that really stand out and pop.
Mike Dominguez: I agree. I call it a comfortable elegance, and –
Glenn Haussman: That’s a great word for it.
Mike Dominguez: There is a way to deliver that type of food and beverage experience and still be very comfortable and be very Vegas in style. And to me, that’s Vegas. It is about being comfortable, and more than anything, that experience and that delivery to me has been very genuine.
Glenn Haussman: And the one thing that I’ve really admired about this company is how you’ve managed to stay far ahead of consumer trends, especially when it comes to issues like technology, but I’m gonna throw you one more food comment before we get into technology stuff, ’cause I love what you’re doing with the new buffet at Aria, really contemporizing it again and going more towards single-serving portions. I think that’s really the way that people like to eat today, little tastes everywhere, and you’re able to make it – and I bet you guys wind up saving on food costs too, ’cause people aren’t globbing on all this stuff on the plate too. But you’re director of sales; you don’t know about that sorta thing. You’re not in the nitty-gritty on the pennies made per food, right?
Mike Dominguez: Spent nine years in food and beverage, though. I am an operations guy by nature, so I do actually care about that.
Glenn Haussman: That’s great. I just figured you’re too busy making deals you don’t know what the average price of a shrimp is.
Mike Dominguez: True. I got it.
Glenn Haussman: So, now that we got that clear, consumers are changing. It’s not just their dining habits. It’s the way that they interact with technology, and one of the things that I like here at City Center is the major commitment that MGM Resorts has made to technology. Here at Varadero’s great and Aria has got those amazing, amazing rooms that were the first I’d ever seen that were really fully technology controlled with everything.
Mike Dominguez: And you know what I think’s even more important to point out is this was the largest sustainable project ever built, and –
Glenn Haussman: You’re LEED-certified with, what, four, five?
Mike Dominguez: Five. And what’s really interesting, though, is when you mentioned all that technology in a guestroom. All that is powered by the sun, and that’s the fascinating part. There’s rechargeable batteries that are literally in the windows that are powering your drapes up and down and it’s not using electricity, but that’s a really small increment of what we actually accomplish.
Glenn Haussman: But you say it’s small but you have thousands and thousands of rooms. That’s gotta start adding up to real money somewhere along the ride.
Mike Dominguez: And I will tell you there’s a commitment from this company. Outside the money, it’s the right thing to do. We really do believe in it and embrace it, and that has kinda led the charge through the rest of our portfolio, where you’re seeing us have a real commitment to making sure we’re protecting our environment.
Glenn Haussman: And I think that we’ve really moved far away from that from the time that this resort complex opened, and now it’s really becoming standard de-facto way of doing business.
Mike Dominguez: I agree. And today it’s our expectations. We have been recognized for what we had done, and one of the newspapers was asking us, well, why is that so important for you in your group space? Well, certain customers that I have wouldn’t even be here if I wasn’t committed to that, because their – but what we’re seeing as corporate America has much greater focus to their CSR initiatives, and we’re not aligning. We’re not good partners. That really is the expectation today.
Glenn Haussman: I think that’s really important. You also wanna align with all of your guests that’re staying in your hotels, so it’s gotta take me back to that technology thing. That’s right. I’m bringing you back via the segue-way, so what I wanna talk about and that’s the technology. What I’ve liked about this company is, like I said, you guys have always been ahead of consumer trends. You guys were doing location positioning of guests really early to offer them deals on site. I love at MGM Grand how you can text us to a certain number and then when I’m there you guys know I’m there for three or four days. I get 20 percent off this bar, buy-one-get-one-free drinks. I should say buy-one-get-one-free drinks, 20 percent off Ka, for example, I remember they had for a while, lots of great promotions, which I think really touched the consumer in the right way and kept them buying more and more and more at your property.
Mike Dominguez: I would agree, and you talk about that. What I love is there is a filter at MGM Resorts International that everything we’re looking at is what’s best for the consumer experience, what’s best for our customer and our guest, and that’s why you stay cutting-edge, ’cause, candidly, our guests are not shy in telling us what their expectations are and what their wants are, and then it’s our ability to be able to deliver that that keeps them coming back.
Glenn Haussman: And another thing that I like about this company is you have so many properties here in the Las Vegas strip, but each one is allowed the permission to do their own initiatives and learn from that and then bring it to the rest of the company and kinda create a best practices that way.
Mike Dominguez: Absolutely, and you know what has changed and has really evolved as a company is that the culture is consistent, how we treat our guest. The focus is consistent. A lot of the deliverables are consistent, but it’s with their own style of each hotel.
Glenn Haussman: Now, one of the things that you’re gonna be doing at most of your properties is offering free Wi-Fi all over the property, and my hunch is you’re also doing a tiered system if you wanna get much higher bandwidth in the rooms or something.
Mike Dominguez: Well, it’s across the board, and I think it’s important to clarify. What we’ve offered is the free Wi-Fi in all of our public spaces, which is consistent across the board. It’s less about free, and I keep saying this. As an industry we need to start elevating the dialogue. It’s less about free. It’s more about bandwidth and what we’re able to produce today, and the system that we put in was a multimillion-dollar system and, most importantly for us, if you were a customer that has already paid your resort fee and you have access in your room to that signal, that signal now carries even to the meeting space, and you don’t see that in traditional –
Glenn Haussman: You do not.
Mike Dominguez: So with that one fee you are now accessible, and what’s really important to our group customer, when you walk into the meeting space, we’ve doubled your bandwidth. So now that you’re in the meeting room, you’ve gone from 256 to 512, so that is huge.
Glenn Haussman: And that’s important to me, too, as someone who attends meetings, so instead of taking a nap during some of the general sessions, I can check my e-mail, which I really like.
Mike Dominguez: Well, and that is the purpose. As I’ve told you being involved in the meetings community, hybrid meetings, but the social interaction – we want people on networks today. It’s important for us to be able to deliver that.
Glenn Haussman: Well, and the other thing is it’s really critical for you guys to have that access to the Internet instead of saying free. I’ll say access to the Internet in the public spaces because of the way that people are interacting with the universe these days.
Mike Dominguez: I agree, and that is the biggest thing that we’re seeing, the multi-device issue coming to play. People used to have the one device. Now it’s multi-device, where it’s two to three devices per individual, us to be able to have that capability, that is what we’ve been able to put in, and what’s brilliant with this system, we’re able to amp up or amp down as necessary. So there’s a huge group, and it’s basically monopolizing the hotel and we know that, and the need’s gonna be in the conference space. I can basically push more bandwidth to the conference space, lighten it up in other areas if necessary.
Glenn Haussman: That’s great. And I think the other benefit to me that I see with this opportunity is get people off their cell phone networks. In certain places here, the phones that I have don’t really work too well, but I can still connect via Wi-Fi, which is great, and I think it gives your guests an ability to promote your products even more.
Mike Dominguez: Absolutely. And some of the neater features that you were talking about earlier, once you’re on our network, you can literally download an app and it is GPS-driven, but you become a blue dot on the screen, so if you’re looking for a certain meeting room, you actually hit the meeting room and you will see the path. And it’s kind of like the Fidelity commercial, where you see the arrow going. You follow the path, and if your blue dot comes off of it, you know you’re going the wrong way. It is that type of technology that we’ve been able – and to me, the beauty isn’t even that component. The beauty is our campus here in Las Vegas, once we’ve put it in play across the board, your signal’s gonna carry or your access is gonna carry from property to property. So if you’re staying at Bellagio and you decide you wanna go to Mandalay for the evening, your signal’s still gonna go with you.
Glenn Haussman: And then I can see exactly what’s gonna happen in a couple of years from now, once it’s all over the place. I’m gonna walk over to Mandalay Bay and then you’re gonna start pushing me offers and opportunities based on everything else that you’ve witnessed me doing as well, right?
Mike Dominguez: Absolutely, and once you’re on the network, we’re able to do that. The beauty for our group customer is if I have you on our network and we’re offering that type of wireless signal, you also now have the opportunity to sell sponsorships on the network for people to communicate to the customer, and on top of that, any time you need to communicate to your entire attendee audience, we could do it seamlessly. That’s the beauty of this program.
Glenn Haussman: That’s great. And, remember, this is not just groups. This is just the regular people that’re coming to the hotel as well. So, we’re looking at the ability to deal with the groups and up your ability to service those groups and your regular leisure clientele. Now, what I think is going on – and this is more for the people listening here – is that consumer spending habits have changed. There’s only a finite amount of dollars they’re gonna spend, right? They’re very experience-driven. They’re very focused on what they want, so it’s not a matter of trying to get them to spend more overall. It’s trying to get them to spend more of their wallet’s share with you and your hotels, and this is really underlining what’s going on here, right?
Mike Dominguez: Absolutely, trying to keep them within the family, and I’ll tell you. I’m relatively new, not only to Las Vegas but to the family, the MGM Resorts family. I’ve been here seven months now, and as I’ve told everybody, I’ve been able to experience MGM Resorts through the consumers’ eyes, trying to understand who we are and what we offer. I haven’t left our properties once. I haven’t needed to, trying to get all of that experience. I haven’t even had a chance – ’cause people have asked me, “Well, have you gone here? Have you” – I haven’t had a chance to get outside my own properties, because we have that many options when it comes to dining and entertainment. Literally I’m just trying to get around to learn all of our product before we move out even outside of that.
Glenn Haussman: Which is pretty a probably smart thing to do, learning about your own product, especially if you’re out there running sales and stuff like that.
Mike Dominguez: I call it job security. That’s a good one.
Glenn Haussman: Good move. So, again, when you guys are at home thinking about how are consumers changing – and Wi-Fi, I think, is really a great initiative for other companies to do as well, so if you’re out there in your small hotel and you’re not offering that sorta stuff, I think you really need to rethink that, because this is the way that your guest is communicating with the world, and if you give it to them, I think they’re gonna be able to promote you better while they’re on property. I mean, who isn’t taking pictures of their hotel rooms or their food these days, right?
Mike Dominguez: And I think it’s important even for those hoteliers if you’re gonna deliver it, it’s not just in lip service. I get the question all the time, “Why can I get a free signal at Starbucks?” You can’t do anything with it, so it’s important that if you’re gonna invest and you’re gonna promote, hey, we have access, that it’s accessible, that you can really do something with the signal. That’s the important key.
Glenn Haussman: You know what I’m still getting used to is being able to use your phone with the pictures on the casino floor. The first whole part of my life once I turned 21 before the modern smartphone era, it was like you would take out a phone, the security would come running over and yell at you. Now it’s just like they don’t care. Nobody cares anymore.
Mike Dominguez: Just don’t point them at the tables. That’s what _____.
Glenn Haussman: So funny. So, before you wrap up, I wanna talk about what’s going on here in Las Vegas. We started off by saying things are coming back, but to what degree do you see them coming back, and where’re we gonna go from here, ’cause the hotel industry itself overall is chugging along, but Las Vegas has really been its own thing.
Mike Dominguez: It really has been, but we do think it’s important that what we’re seeing as far as all-time-high demands in North America, that’s gonna lend very well for our recovery as well here in Las Vegas, ’cause that compression nationally will help start driving the kind of business that we still need. And, as I said, we’re having record visitors to Las Vegas. The challenge is we have a lot more rooms to fill, so we still have a little bit of a ways to go. I will tell you the biggest opportunities we’re seeing is with international travelers and the emerging markets, what we’re seeing from Brazil and from Australia, huge for us and something that we’re all gonna continue to focus on.
Our biggest challenge we have in this destination that – and I think a lot of destinations are struggling with this and we don’t talk enough about it. We’re about 10 per – well, going back to our peak, we’re 20 percent lighter in the amount of seats that’re coming as far as air service into the destination from where we were. It’s not wrong, because the airlines are finally making money. They have a business model where they’re finally making money, so we get it. Challenge is, how do you continue to grow the market and continue to bring new people in with limited service?
Glenn Haussman: Right, and I know that the airport has done a good job on working on deals to bring in people from other countries, new carriers, so that way each of the airlines is still able to bring in the amount of people they feel is right, but you’re widening the pie with the amount of people coming.
Mike Dominguez: Exactly, and our airport has done a phenomenal – combined with our Convention of Visitors Bureau here, they have done a phenomenal job of really growing that. And what we are seeing, it’s not that the airlines aren’t willing to grow it. They’re growing it by changing aircraft, not by adding more routes, so they’re adding aircraft that’ll bring more people per flight versus adding that whole new route in. Still a little bit of a challenge for us, but we just opened up Terminal 3. It’s probably the best international terminal you will ever see. It is phenomenal, and that just opened up earlier this year, so –
Glenn Haussman: As a matter of fact, I got to walk through there. I wanna say it was late October. My flight was still in Terminal 1, but I had to go in through Terminal 3, for some reason. I was glad, because I got to see it.
Mike Dominguez: It’s beautiful.
Glenn Haussman: Really, really beautiful.
Mike Dominguez: Very well done, and I will tell you we’re excited, because we’re actually being able to host the Roots Conference this year, which is all the airlines, and it’s the World Roots Conference that will be here in Las Vegas in fall of this year, and we’re hoping that we’ll be able to get the American Roots Conference here in a couple of years.
Glenn Haussman: Well, that would be super. So wrapping up, the last thing I really wanna talk about is the meetings business. How is it coming back here? And the reason I wanna talk to you specifically about it is ’cause you’re involved in Meeting Planners International, right?
Mike Dominguez: Chair-elect, currently.
Glenn Haussman: Chair-elect? Man, so you’re gonna be the big cheese.
Mike Dominguez: The clock is ticking. Ask me in August how excited I am.
Glenn Haussman: We’ll do a follow-up interview in August and we’ll wipe the shell shock off your face. We’ll get going. But that’s a really important job. You’re looking at the whole meetings industry overall. What’s going on from your point of view?
Mike Dominguez: Well, we’re seeing strength in the market. The optics of meetings have started to subside. Now, everybody was still running scared from the AIG effect and literally the visibility of meetings in the market. That’s starting to subside, because we do have a pent-up demand and we do get people to the point right now that they’re understanding, you know what? This is part of what we do. This is part of a compensation package, even if it’s an incentive program, so from that perspective, we’ve never seen better dynamics.
We see a lotta strength in the market. We’re just a little bit nervous as far as cautious in that we still have some headwinds. We need our friends in Washington to get their act together to pass a budget, get off these cliffs. We need no more cliffs. We really need some good news or that to be out of the news so that we can get that momentum. And everything we see is the time we slow down or tighten up as an industry, it’s when that news and that little clock on CNN starts going because we have a fiscal cliff that we’re about to hit.
Glenn Haussman: So, how is business looking of this year and 2014 for MGM Resorts?
Mike Dominguez: Actually, fantastic. This year we’re getting back to the room nights that we saw or very close to the room nights we saw in the group side of it four or five years ago, so we’re getting there, and it’s starting to feel very good, well ahead of pace for ’14. Fifteen’s starting to look good, and we’re seeing that as an industry. I will tell you, most of the forecasts we’ve seen, whether it’s PKF or STAR, they are all talking right now of ’14 being the year, where it all comes together. And some of the headwinds are starting to subside. We were worried about China. China’s starting to move along again as far as their economy, and Europe is still a big concern for us, because I think sometimes we forget about Europe in that there is an almost 40 percent of the S&P 500 get 35 percent of their revenue from Europe, and we forget about that. The reason Europe matters is when those companies start to slow down. So will their spending domestically. That’s what we worry about.
Glenn Haussman: And that is a good thing to worry about. You have so many puzzle pieces that you have to fit together in order to sell all of these rooms. How many square feet of meeting space are you overseeing completely? Is there a number that you know?
Mike Dominguez: Three million.
Glenn Haussman: Three million. Oh, my goodness.
Mike Dominguez: Three million square feet, and the granddaddy of that is Mandalay Bay at 1.7 million alone.
Glenn Haussman: Wow.
Mike Dominguez: It is one of the largest conference centers in North America.
Glenn Haussman: And in May of 2014 you’re gonna have two major hotel-industry conferences taking place at the same time over there, which should be very, very interesting to see.
Mike Dominguez: It’s gonna be fun.
Glenn Haussman: It’s definitely gonna be fun, and I’m gonna be there. That’s for sure. I gotta get special shoes to walk over that fake cobblestone that you guys have going on back there for that 45-minute walk, but at least you’re rewarded by looking at the shark tanks if you wanna go back there.
Mike Dominguez: I hear you. You get to walk by the pool, get to do all of that.
Glenn Haussman: Which I definitely like. Anything else that you feel that you wanna share with us today?
Mike Dominguez: No. You know what? I really do think that the industry has some really good dynamics and we’re moving in the right direction. And I think that’s the positive, and outside of everybody else, just keep traveling. I will tell you one thing that we’re really trying to impart on everybody in the industry is that we need to really do a better job with advocacy as an industry, and that’s not just legislative. We’re talking about within our own communities. And we make the joke we’ll be successful when you can go to Thanksgiving and tell somebody what you do and they actually know what you do, ’cause right now they’re like, “What do you mean you’re in the hotel business?” It’s not an understanding. We need to have a better understanding in our local communities and our local governments and then also on a national level of what our industry represents as far as jobs and influence to the economy.
Glenn Haussman: And we’ve talked about that before on this show, so in your local community, are you friends with the community leaders? Do you know the mayor? Does he come and hang out at your hotel? If not, he should be. What about that chamber of commerce? Are you fully involved in there? Are you out talking to people at the hospitals, even the funeral homes, even the truck-driving companies to see if you’re driving business to your local neighborhood.
And nationally, you gotta get out to the Legislative Action Summit held every year in Washington, D.C., by the American Hotel and Lodging Association. And I don’t wanna turn you off to going, but I will be speaking at it this year. Come April I will be running the legislative panel to talk about all the major issues that’re going on in the hospitality industry related to government, so you gotta come out and do that. If you don’t wanna see me, that’s fine. I don’t really like to see me either, but you have to do your part and get out there, and the cool thing is you get to go meet with senators. You get to meet with the congressmen and feel really cool on the hill for a day.
Mike Dominguez: I like to be out there, so I will see you there.
Glenn Haussman: So maybe we’ll do another interview and see how you’re handling the impending chairman-elect situation.
Mike Dominguez: You got it. I would love it anytime.
Glenn Haussman: So, I wanna thank you guys for listening. I’ll be right back after this, and thank you, Mike.
Mike Dominguez: My pleasure.