By eliminating the last of its parking fees that it started imposing in 2017, is Wynn Resorts (NASDAQ:WYNN) simply trying to gain a competitive advantage over its rivals, or is it actually worried about a slowdown coming on the Las Vegas Strip?
All major casino operators followed the lead of MGM Resorts (NYSE:MGM) in 2016 when it reversed decades of tradition and started charging for parking at its resorts. For a city that has made a science of separating visitors and tourists from their money, this nickel-and-diming of guests was seen as especially invidious. Getting rid of parking fees first may pressure other casinos to follow suit.
Angling for a better position
Wynn actually began unwinding its paid-parking policy last year when it announced that guests at its resorts or hotels could self-park or use valet parking free. Then in May, it expanded the policy by saying all self-parking would be free, and now it has said valet parking will be free, too.
Wynn president Marilyn Spiegel said, "Free valet parking is an amenity that is highly appreciated by our guests, and we are pleased to offer it to all of our visitors."
No doubt it is, but maybe Wynn sees more to it than that. While the major casino operators now impose parking fees at most of their properties, visitors, tourists, and even employees are rejecting the surcharge.
More people drive into Las Vegas than fly there, which is probably why casinos thought it would be an easy way to make money. The Las Vegas Convention and Visitors Authority says 52% of all visitors last year arrived by ground transportation, whether by car, bus, truck, or RV, versus the 48% who flew in. But whether they drove or flew, most often they were coming from Southern California (19%).
That, however, was a precipitous drop from 2017 when the parking fees went into full effect at all the casinos. Back then, 26% of all visitors were from Southern California, a figure that had been fairly constant for five years. That suggests parking fees were a big deterrent to visitors and tourists.
Moreover, the 2018 community survey conducted by the Las Vegas Global Economic Alliance found 37% of workers in Las Vegas avoided parking at casinos that charged fees and almost 30% avoided using any services at casinos that didn't offer free parking.
No one was happy with the parking rules, and in Las Vegas last fiscal year, which ended in June, the gaming win at Strip resorts fell 1% from the year-ago period. Meanwhile, all of Clark County -- and the State of Nevada, for that matter -- saw a near-1% gain.
Last year was a rough year for gambling in the city, and though Strip gaming win was up 1.6% in July, that's about half the rate of the county and the state.
Ready for anything
By eliminating the last vestiges of its parking fees, Wynn Resorts looks like it's trying to match the policies of the casinos that immediately surround its properties that have never imposed fees, and also stand out from its major rivals.
If Las Vegas ends up seeing a new slowdown, Wynn Resorts is positioning itself as the more visitor- and tourist-friendly resort.