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Rod Smith
 

Price Wars: Caesars Takes on Travel Sites

15 March 2004

LAS VEGAS -- At least one major casino operator is fighting technology with technology, starting with a promise to beat any room rate customers can find anywhere if they book its rooms through its own Web site.

Caesars Entertainment will up the ante in its competition with major Internet providers today when it launches its new "Best Rate Plus Guarantee" program. If a customer finds a lower Internet rate for at room at one of the company's resorts, Caesars will match that price, then beat it by offering an extra 25 percent discount on its own rooms.

The program was designed to offer guests more incentives to book rooms at the company's 18 domestic casino resorts directly through the company's Web sites.

Vegas.com Senior Marketing Director Bryan Allison said such programs are becoming common in the lodging industry although the gambling industry in Las Vegas is just now discovering them.

Mandalay Resort Group and the San Remo also have meet-and-beat rate programs, Internet providers said, although the operators could not be reached for comment.

"(The hotel-casino operators) have had challenges in the past of not managing their inventory and their most loyal customers well," Las Vegas.com President Chris Bradshaw said. "This is a good way for them to bring loyal customers back. A lot of hotels worldwide are doing it."

Caesars marketing chief Steve Rosen said recapturing loyal customers is the program's primary goal.

"With the advent of the Internet, people would go to your sites, but they could find cheaper rates other places because of the wholesalers," he said. "The airlines have had to go through this also. As the Internet has become more popular, people shop around."

Vegas.com, one of two Las Vegas-centric Internet travel Web sites, also promises its rates are as good as those on any other site.

Las Vegas.com does not offer such a program because Internet users who are brand loyal are already going to individual operators' Web sites, Bradshaw said.

"We are appealing to a broad market to bring new customers to Las Vegas," she said.

Bradshaw said the wholesale groups, Expedia.com, Travelocity and Orbitz, for example, historically understood their relationships with hotel-casinos and added value.

However, in the past few years they have contracted to buy large blocks of rooms at steep discounts and they have raised rates. Rates in general have been rising, increasing their margins, but giving no return back to operators.

The same development has been taking place in the lodging industry generally, and the meet-and-beat rate programs are an effective way for operators to fight off the inroads major Web sites have made capturing previously loyal customers.

Bradshaw said programs such as Caesars' new rate program are moving Las Vegas into the mainstream battle of fighting technology with technology.

"We think it's great. We want the hotels in Las Vegas to get their rates up," Allison said.

Bookings on Vegas.com must be completed at least eight days before arrival, Bradshaw said. By selling out more rooms earlier on their own Web sites, operators can cut the volume of rooms they sell to online wholesalers.

The programs help them increase their average daily rates and the financial margins they get from each of their rooms.

The programs are also designed to assure customers they are getting the best deal possible. That is particularly important for the casino-operator Internet sites because consumers are flocking to wholesale travel sites in increasing numbers.

"The programs help companies manage their (room) yields and they give customers comfort they are getting the best rates available while helping hotels charge higher rates on the average and increase their yield per room," Allison said.