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Best of Liz Benston

Gaming Guru

Liz Benston

Casinos Eager to Deal in Hispanics

21 August 2006

LAS VEGAS, Nevada -- Major U.S. brands such as Coca-Cola and Ford are doing it. As are Bank of America, AT&T and Microsoft.

But Las Vegas casinos - faced with the more nuanced task of selling the image and flavor of a resort vacation rather than a product - are years behind other companies in recognizing that promoting their wares to the nation's largest and fastest growing minority group is no longer a matter of choice.

Indeed, for casinos, like other companies, marketing to Hispanics has become a matter of simple math.

About one in seven people in the United States is Hispanic, with half of the Hispanic population younger than 27. In California - Las Vegas' biggest feeder market - one-third of the population is Hispanic, with Hispanics estimated to become the largest ethnic group by 2010 and a majority by 2040.

The ballooning Hispanic market is fairly young, with high birthrates outpacing new immigrants. That could be important to gaming's future because the casino industry's typical customer is about 50 years old and cannot sustain the industry for generations to come.

"It's a very untapped market here in Las Vegas," said Jim Medick, chief executive of MRC Group, a Las Vegas-based market research firm that has conducted Hispanic marketing studies for Las Vegas casinos.

Casinos stand to capture a big percentage of the estimated $25 million that Hispanic Nevadans could potentially leave behind in Las Vegas casinos and a chunk of the estimated $215 million Hispanic tourists could spend overall, Medick said.

While casinos know this, many are uncertain how to tap into a group that is not necessarily swayed by the same sexed-up, irreverent messages that attract a primarily white crowd. They also know that cultural marketing - for an industry schooled in generic direct-mail offers for gamblers - is a potential minefield for marketers unfamiliar with Hispanic culture.

Some American companies have invested years and millions of dollars to learn a host of marketing do's and don'ts. Translating catchphrases directly into Spanish can result in embarrassing or ineffective messages. Add to that some concern that Hispanics tend to include their children in trips to hotels, which accommodate kids but prefer adults with money to burn.

Casinos, though, will have little choice but to pay attention to niche groups as industry growth slows because of competition and graying slot customers, said Dennis Conrad, a Reno-based casino consultant.

The Hispanic market has largely been ignored by casinos relative to its size and profit potential, a situation Conrad blames primarily on the long-held notion that Hispanics don't have much money to spend on a resort vacation.

That viewpoint is changing, with casinos starting to develop more sophisticated outreach efforts based on the latest market research - which points to rising incomes and a desire to spend money on entertainment.

One upcoming event, a tequila festival and trade show inviting tequila makers from Mexico, is expected to kick off next year on the Strip. Earlier this month, four venues, including the Stardust and Mandalay Bay, hosted the Las Vegas Caliente festival, Las Vegas' first multivenue Latin music event.

A couple of weeks ago, the Las Vegas Convention and Visitors Authority wrapped up its first major public relations event for Spanish-language travel writers, pitching media from key markets such as Los Angeles, Chicago and Houston on the latest Strip attractions.

Some companies are running occasional Spanish-language ads, "Latin night" events or Latin musical acts while they conduct preliminary research on the Hispanic market.

Julio Cordova, a partner in Elias Entertainment, a company that promotes Hispanic acts across the Southwest, says those efforts have not been aggressive enough.

"They aren't spending much effort thinking about the general market or even the Mexicans who actually live there," Cordova said. "They probably just think of them as the help."

Some off-Strip properties say that while they already market to Clark County's 25 percent Hispanic population, those efforts have been beefed up recently.

Locals chain Coast Casinos hosts a weekly party at the Gold Coast called "Latin Vida" and regular dances, or "bailes," at the Orleans Arena and South Coast that can draw up to 7,000 people. The company's Sam's Town property, located near heavily Hispanic neighborhoods in eastern Las Vegas , hosts frequent "quinceaneras," or coming-of-age birthday parties for 15-year-old girls. And the Stardust, which offered nine Hispanic entertainment events in the past two years, offered its 10th, called "Salsa Vegas," earlier this month.

Locals giant Station Casinos is following the lead of other corporate brands by appointing a director of Hispanic marketing. Former Four Seasons Hotel executive Ivan Negri will assist on advertising campaigns, advise the company's human relations department and serve as a liaison for Hispanic employees and community groups.

Roughly a quarter of Station's 14,400 employees are Hispanic, and all employee communications are translated into Spanish. Station will soon translate its Web site and slot club kiosks into Spanish as well.

The biggest Strip properties, though, are further behind.

The country's two biggest casino companies admit they do not yet have a comprehensive plan to court Hispanics.

Harrah's Entertainment says it is starting to work on such a plan. Harrah's recently compiled a survey showing that about 29 percent of the Hispanic population had visited a casino during the first half of this year, up from 26 percent a year ago.

Competitor MGM Mirage has focused its outreach on public relations campaigns targeting Hispanic media outlets rather than advertising messages. Those efforts have quadrupled in the past few years, MGM Mirage spokesman Alan Feldman said.

The LVCVA is spending at least $2 million a year - more than any other target market - on Hispanic marketing, a figure to be increased by about $1 million next year.

A couple of years ago the LVCVA ran print and TV ads with the catchphrase, "En Las Vegas, todo se vale" (In Las Vegas, anything is possible).

One ad entitled "Tres Generaciones" featured a daughter, mother and grandmother shopping and lounging by a hotel pool - a far cry from the sexual innuendos in Las Vegas' quirky and brash "What happens here, stays here" campaign.

Last year about 2.4 million U.S. Hispanics visited Las Vegas and spent about $1.7 billion on nongaming activities, according to the LVCVA. A recent survey conducted by the Travel Industry Association of America concluded that Las Vegas ranks as the nation's top destination for Hispanic travelers.

Casinos will do more to market to Hispanics in the years to come - up to a point, MGM Mirage's Feldman said.

While properties will hire more Hispanics and do more business with the Hispanic community, they are not likely to launch year-round Spanish-language venues or entire Hispanic-themed properties, he said.

"I think it's important to cast the net as far and wide as possible, as opposed to going after one group," Feldman said. "Hispanics are the largest emerging market and is clearly the group that needs the most attention. But that doesn't mean at the expense of everyone else."

If consumers see more Spanish-language signs and ads in the future, that's good, said Yvette Sugg, a Mexican tourist who has visited Las Vegas twice and stayed at Bellagio last week with her family.

Sugg, who lives in Southern California, said promotions in Spanish would make her feel more welcome in Las Vegas and therefore more likely to return.

"It's my language," Sugg said. "It's like going to Europe. You'd want to see signs in English and have people who speak English. I know English - I was an English teacher in Mexico - but some people don't know English that well or they're shy."