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MGM CEO Jim Murren Blogs About Parking

By Chuckmonster on Friday, 22nd January 2016 3:14pm
  » filed under Las Vegas  comments: 24

   

While the east coast of the U.S. is getting hammered by blizzard, MGM Resorts CEO Jim Murren has been busy shoveling snow of his own - in the employee parking garage. Jim Murren has taken to the corporate Wordpress installation to address employee concerns in a 1000 word essay he creatively titled "Parking Strategy". Ooooh.

In the post, @jim_murren, lays out a half dozen reasons why the company decided to shift to paid parking. I'll condense and paraphrase:

1) People pay to park in other parts of the universe, why not on the Las Vegas Strip?

2) Free parking is an antiquated idea and will go the way of the 59 cent breakfast.

3) We've consulted with experts and decided to invest new parking technology. This costs money.

4) We're building a new parking garage behind Excalibur because of the arena. This costs money.

5) More people are coming to Las Vegas, and their tastes are changing. Las Vegas isn't a gambling town anymore... we can't give everything away like we used to.

6) Millennials, mobile technology, Uber and Lyft.

After multiple waves of layoffs, cost cutting and penny pinching, Jim Murren and MGM top brass have lost the trust of their employees. Will Murren's 1000 word, "c'mon guys, we're a team right?" Lombardi speech work?

Jimbo's commandeering of the company blog and spilling his guts tells us the answer.

A very large contingent of VT's readership are locals, the majority of whom work in the casinos themselves. I can't think of one of our local readers (other than The Murren himself - hi Jimbo!) who doesn't hate paid parking. They hated it when the news broke on VT in October and they hate now. a full three months later.

Locals hate paid parking for the obvious reasons - fees and inconvenience. They hate it even more because locals know tourists, and how adding a dumb fee in exchange for available parking technology is going to adversely affect the tourist experience... FOREVER.

Nobody knows tourists like locals do. This is a good and a bad thing. A local's Strip casino experience is the tourist experience times a zillion. You think tourists hate walking from the MGM Parking Garage to Restaurant Row? Talk to a local about it. One of the main tenets of casino design is to place the poker room and sports books close to the parking garages.... these gamblers pop in and pop out, jumping from joint to joint to find games, odds, conditions that suit their skills and advantages. Add $8-10 for each in-and-out and you'll be down the equivalent to lunch and a tank of gas just by sniffing out the job site every day. Do that five times a week... and you're in the hole $150 before you've checked your cash.

At its core, locals, particularly casino employees, really and truly care. They live in a service economy where their jobs, livelihood and health of their city depend on the 40+ million of us idiots who fly or drive in to stay, play, eat, party and park at their hotels. When their employer does things that makes THEM not want to visit, they know for damn sure what tourists are going to think.

After mass layoffs, departmental outsourcing, dramatically reducing Employee Dining Room offerings to basics and Jim's Plate healthy choices and limiting access to EDR to one meal per shift, MGM CEO Jim Murren, turns to his work force to support the paid parking initiative.

I laud Mr. Murren's effort. Some of the explanations are compelling, some of them sound a little snitty, some of them are bullshit.

By definition, I'm a Gen X skeptic, not a selfie obsessed Millennial. I do love technology, food, entertainment and ride sharing services. I even use Snapchat, badly. Like my Millennial brethren, I don't gamble (anymore). I used to, but tightened games in the name of driving profits have driven me out of the casino. If games were still fun and occasionally profitable, I'd probably still be losing money in the casino. But instead, I don't play.

I don't buy the Millennial excuse. I've high five'd enough grannies at the Wheel of Fortune slots to know that casino gambling just doesn't become unfun because of generational shift or advancing technology. The casino owners slit their own throats when they kneecapped casino games. By slowly turning up the heat on house advantage, they taught equal percentage of casino goers that gambling is a waste of time and money. These toads boiled themselves.

What Mr. Murren won't dare mention is why they're rolling out this paid parking program and the other cost Profit Growth Plan cutting plans they're faced with everyday. So Seven top MGM executives can reap upwards of $10 million in bonuses if they can raise MGM's stock price by the end of 2016. Sources have told VT that MGM's Profit Growth Plan was developed in conjunction with Bain & Company, noted corporate dismantlers (along with sister company Bain Capital.)

Is it working? As of today January 23, 2016, MGM stock is down $2.41 (11.08%) since they day they announced the Profit Growth Plan - August 5, 2015.

Mgm Pgp Stock 20160123

Even with MGM stock shedding 11%, CEO Murren and six other top MGM execs still stand to take home handsome bonuses by the end of the year.

Mgm Pgp Stock Bonuses 20160

So it is a race against the clock. MGM bosses are trying to make the cuts, install the fees, decrease the costs, and increase the revenues as fast as possible right now. They need to convince analysts and investors - against the crosswinds of a global economy - that MGM is crushing the numbers and you should BUY BUY BUY and drive the price up.

I wouldn't be surprised if the Excalibur parking garage and installation of the parking garage lights and tote boards are delated until late Q4, pushing the expense off until the books close on the PGP executive bonus. It is also possible that the technology here is all just explain away vaporware.

Perhaps now that Mr. Murren has turned to the blogs to solve that employee morale problem, he can take a moment to assuage the small yet angry Facebook mobs passing around petitions and slicing up vintage MGM Mirage Players Club cards in protest. C'mon Jim. You've got a Facebook account!








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Comments & Discussion:

Hellooooo from the snowy Eeeeast

... Anyway, when do the fees (and taxes) stop? Entertainment taxes. Resort fees. Early check-in/high floor surcharges. Weekend "surge" pricing on drinks. Parking fees.

You'd think a company built on gambling, one that gets 1 to 10 percent of every gaming dollar spent, wouldn't have to resort to such drastic measures. Sure, people don't gamble like they used to, but why *cough-cough* is that *cough-6:5-tight slots-2x-cough*?

Here, here Chuck! Some of the sharpest and most accurate writing on LV's 'state of the union' in sometime. It's chilling to hear corporate executives speak down to their customers in such a transparent and dismissing manner. These aren't hospitality trendsetters, these are greedy suits willing to sell out the future of Vegas (and their own employees) for personal gain. Being surprised by the blowback only shows the depth of the chasm between the boardroom and reality. Locals won't and tourists shouldn't forget the words, "a month from now, three months from now, people will completely forget about it." Pay with your pocketbook and make them regret taking you for granted.

In short, f*** these corporate pigs.

Okay Jimmy.....Here is my new parking policy. I will not --- park my car in your garages, park my head on your pillows, park my empty stomach in your restaurants, park my easily-entertained cerebral matter at your shows or.....park my not-so-good-at-video-poker lard-ass with a wallet in the back pocket in the seats at your casinos. Park that in your blogarage?

It really is a shame.....and I feel terrible for the employees and greatly sympathize with them. I have worked for numb-nuts like this before.......they put on their culottes and get out their pom-poms, then leave a trail of destruction behind them for some type of short term gain. The ending is never pretty.....and almost always results in a very long and painful recovery......if there is one. The shareholders need put their boots on and do some kicking.

Wow Chuck, great work. If a company like Bain is involved, the last thing on their mind is improving the customer experience.

Great article, I'm going to link this to a few people.

It's 1000 words that can be summed up in three. "Because we can." They have stuck us with resort fees, 6/5 blackjack, taxes and fees and people bitch and moan and gripe. But we stay, we play, we soak in the sun and the pools. Where will it stop? It won't. Enjoy free drinks while you can and $20 sandwich hotel upgrades and the door being opened for you.

On a personal note I still love this town. Changes for the last 30 years follow the same path. The strip casinos pioneer ideas at the expense of old time "customer service" which can still be found off strip. I can travel to Miami or Paris or Omaha but I will keep choosing Vegas despite the parking situation.

I don't like it. I admit in a way we kind of "deserve" it, but I still don't like it.

Since a big part of this article is about locals, let me tell you: we could do better. I ride the buses as my primary transportation here, and while the quality of the service has improved dramatically (and fares have doubled) in the past decade, it's underutilized, especially in any higher income area that hasn't fought service completely. We have a car problem that's not quite of Houstonian or Angelean(??) proportions, but it's getting up there.

So on one hand, we're too car-dependent and we're seeing some of the results of that.

On the other hand, MGM (and the Strip dads at large) hasn't proven to me that they've done anything but exacerbate the problem and now see to exploit it. What's the transit plan for this arena? I follow transportation in this town as a bit of a hobby and I still don't know.

You know what town has an indoor arena with a lot of parking? Oakland. And Oakland is losing it's NBA team and probably a lot of events to a new arena in San Francisco, where property is at a premium and transit is deeply embedded. Transit access is an important part of any city's stadium/arena plan, but our plan only looks like "so long as it's privately funded, who gives a shit." Talk to any Vegas local who has left an event at T&M and ask them if they could remove the parking element from their adventure and many would.

So MGM's arena plan is a monster garage and talking about how much more pleasant the present garages will be. They could add something of a transit hub but I haven't heard of anything. MGM's desire to charge locals for parking would still be inane (again, we're talking scarcity of supply, and it seems they understand that somewhat if they're charging less for Circus than they are Monte Carlo), but at least it would make a little sense if I got any feel that they are making the public less reliant on parking by accommodating alternatives.

Now wait a minute Chuck! You called me an idiot since I'm from out of town. Well OK, I guess you have a point.

One of my beefs with the Mandarin was the required valet parking. Now that MGM is charging for parking. The Mandarin is more attractive. I tend to drive to different places for shows, gambling, and meals. No more of that, so no rental car, and taxis instead.

I hope the entire town doesn't flip like they have for resort fees. It will hurt Vegas and the many awesome people who work there.

I think that we all are missing a big piece of the pie. Diamond Jim Was put on the hot seat about MGM's stock price underperforming. The institutional investors are restless and Jim is feeling the heat. Anytime a ceo feels heat about stock price, it is a "guaran-God-Damn-Tee", that penny-wise pound foolish decisions are comin' to town. The gaggle of consultants that lined up to tell Jim how to spike the stock price must have been impressive indeed. Come hell or high water, they will raise that stock price. Unfortunately, it may be at the expense of the long term health of the company, the customer experience, and most importantly the employees. But hey, if you work at Aria, you maybe got to see Matt Damon or Tommy Lee Jones.

As always, a terrific article from Chuck.

This gets at why the parking news is irritating to me, who gets to visit the Strip probably twice a year, usually without a car. You'd wonder how any of these places could have made money when they had decent games, without drink vouchers or paid parking.

Maybe also because this going either way - the Duck Dynasty musical was going to fail, Giada was going to succeed, but I can see paid parking being the wave of the future, or causing a real decrease in MGM traffic. Some of the outrage will probably cool but at least there's been some noise about it.

If the implementation of parking fee take hold I expect it to be a game changer - the ripple effect of unintended consequences could be striking.

The incentive will be for drivers to use non-MGM casino parking lots and those casinos will eventually be forced to implement fees of their own in order to protect their customers which will then cause other non-casino establishments around the Strip with parking lots of their own to protect their parking spots with their own fees or guards, and so on.

Side streets will eventually have to put in parking meters and the general area of and around the Strip will end up with the same allure of the parking hell of downtown.

I'm planning on doing my part to lessen the burden by cutting my driving trips to Las Vegas from 4 to 6 a year down to zero. There are simply too many less costly, less hassle alternatives closer to home where I don't (yet) feel fleeced at every turn.

The tribal casinos in California and Arizona must be very excited about MGM's decision to implement parking fees in Las Vegas.

Butler, I think odds are a different matter. There's been a demographic shift, both in the city chasing gambling cultures but also among Americans as a whole being less opposed to gambling. In an age where Americans spend $12 going to the movies or throw $25 at Candy Crush Saga, spending $100 in a casino over the course of a day is no big deal.

First of all, gen X and millennials are easier to sell on gambling because of the reason above. The old social stigmas are gone, spending money at a casino is just something some people sometimes do, no different than all that money that was spent at Powerball recently. So because gambling is more acceptable, it doesn't have to offer such favorable odds as it maybe once did when gambling in a casino felt like you were offending your parents/neighborhood/pastor/etc.

Then there's the budgetary allocation.

If Joe Schmo is already in a room that costs $125 a day, and spending $100 on his entertainment ticket for the night, and spending $100 on dining a day, another $100 spread out in the hours he's not doing anything isn't any big deal. The thing is, people used to spend larger shares of their budget on the gambling, far and away so, and the people who did that wanted the best deal for the largest part of their vacation budget. Increasingly, though, the public is willing to gamble but isn't deeply passionate about gambling over all other expenses, so odds have gotten worse outside of the High Limit Area (where customers see gambling as the whole point of being there.)

Basically, look at it this way: twenty years ago, you had two types of properties; the lower end hotels like Flamingo and Sahara and Old Aladdin and Stardust and Sands which focused on odds, and then you had these new spectacular hotels like Mirage and MGM Grand and Luxor, with Paris and Bellagio on the way. And the word online was that these big themed full service hullabaloos offered less odds, that they were a poor gamble. The original editor of CheapoVegas put it succinctly: "Gambling at Mirage isn't about winning; it's about being seen gambling at The Mirage."

The difference is that before 2003 there were still these fleabag hotels with great odds, and customers could go to them and the mid-range casinos had to at least look scared that their customers could go there. Now look at what's been demolished: Boardwalk. Westward Ho. Stardust. Even IP and Barbary Coast have lost the grittiness inherent with the value market.

I think in a lot of ways this is the final evolution of Caesars opening in the 60s. All of those Sarno fantasies about Roman icons and grape goddesses weren't cheap, and they made up for it by having one of the most profitable casinos in town. And I'm sure even in the 60s there were people who looked at Caesars and said "well screw this place, I'm going to the Hacienda or someplace where the odds are better."

Basically, Caesars won, and the places on the Strip that stood in opposition to Caesars for many years have been destroyed for more Caesars style resorts. Sending that old Barbary Coast crowd to Golden Gate, that old Stardust crowd to Golden Nugget, that old Westward Ho crowd to Plaza, etc.

This is also another reason why some people with a gambling acumen curse Steve Wynn for closing the Desert Inn, because it was generally regarded through the mega resort period as just about the only place in the Strip that combined the luxury market's expectation for customer service with the gambler's expectation for fair odds.

I have two single friends in Vegas right now for the AVN Expo. They could care less about gambling, resort fees, parking charges or anything else other than to hang out and meet their fave Adult film stars. That's the dirty little secret of Vegas that a lot of people don't talk about (or possibly don't know or understand) : as long as there are pretty young women willing to party with men with money, Vegas will do just fine!

Thanks for shining a light on the cockroaches, Chuck. If only 'real' news outlets actually did their jobs.

Murren looks to have sold a lot of stock over the last year or so. So has the other top executive team. They are in a win/win situation. If the stock price climbs, well they still have some stock plus they get their bonuses for PGP. If it falls, then they got out at a good time, and will still get golden parachutes on the way out the door. The only losers here are the customers of MGM, and Vegas herself.

The fact that bankrupt Caesars is spending money to upgrade the worst of their properties/rooms, while MGM is for the most part shuffling around furniture is telling. Murren should have been given the heave ho off of the USS Lion along time ago.

In the history of written discourse, no one has ever begun a winning argument with "Colleagues." Just sayin' is all.

as an MGM shareholder, I'm definitely peeved that the stock is down 11% since the announcement. clearly the markets are telling us one thing: parking isn't even paid yet and already I can tell that parking prices aren't high enough. $10? Parking should obviously be $20 or higher. And why stop there? What about a scenario where, in line with table limits vs odds, $25 parking can be found near the door with good lighting and soft jazz playing over the PA system, while $10 spots can be found on non-premium parkade floors with flickering fluorescent lights and a faint smell of urine in the air for ambiance.

Jim: "in the end, it’s the right decision because it creates a better experience for our guests". Um, no.

Anyone in the industry get any scuttlebutt on whether they are implementing employee-paid parking at any of the hotels, or at the MGM executive lot? After all, free parking is as archaic as 59 cent breakfast and free hot dogs. I don't pay for parking at my workspace, why should all these entitled hotel workers get their own luxurious parking tower? I mean, don't they want to create a better experience for their employees? What better way to start than paid parking!?! These poor customers and employees have been struggling with how to put their cars and SUVs within the two painted lines all these years, good thing MGM is coming to the rescue with "enhanced technologies to help make parking easier". Like at my local mall, where they have a green light above an empty spot and red one over a full one? Good thing that light is there, I almost drove right into a spot already occupied by an F-350!

Jim's quote "Although I’ve lived here for 18 years, I too have come to value many of the qualities of our community that some people believe are our birthrights, with free parking as one of them." Free parking is not a birthright, it is a customer benefit, one that MGM is ripping away not in the name of profits which would benefit shareholders, but rather in the name of a plan to benefit specific executives with PGP-vesting options. As a shareholder, I will be planning on doing my spending in Vegas at places that actually care about the customer experience, which extends to things a little less mundane than helping make parking easier. Forget customer touchpoints at the parkade, how about having decent table odds? I could use that as a positive touchpoint instead of getting hosed for $25 6:5 on busy nights.

And Jim has the AUDACITY in this blog post to point to how 'we' have come to expect high end food instead of cheap or free food at the hotels. Who is to blame for that trend - the customer, or the patron who stocks their hotels with high end celebrity chef enclaves, where even the PUB can't escape the celebrity price point...

is he kidding with this blog? It almost looks like a spoof post except for the legit URL. One word, MGM: INTRANET. Then these crazy puff pieces won't have to be dissected on a public forum like this.

Yeah, jimmybond, it's the smug condescension like the sarcastic "birthright" crack that I find most annoying. If that's what he thinks of his guests, fine by me. But I won't be one of them.

Go back to the beginning. The casinos offered free parking to get you stop and come inside and gamble, where the house has an advantage with the games offered, and they then could take your money. But Vegas has become such a vacation destination, with so many people coming to do things other than gamble, as we keep seeing stories that non-gambling revenues are equal to or even greater than gambling rev's. So, MGM is deciding to just screw the gamblers. They change the table game odds to increase the house edge, they increase fees to stay at their hotel, they take away free parking. Anyone that likes to gamble would have to be a complete and total idiot to go anywhere near an MGM property.

They really have lost the employees. I was sitting at the MGM lobby bar and the dude next to me was playing video poker and wanted a drink. He had burned through 100 bucks in 10 minutes and had not gotten a voucher. The bartender asked the manager if they could go ahead and give him a drink and the manager said any drinks given without the voucher are paid for by the bartenders.

So now we have a pissed off dude to my left and pissed off bartenders in front of me. Oh yeah, that's the place I want to spend my time. I wasn't even looking for a free drink, it just made for a really shitty atmosphere.

BTW, $8.50 for a Corona at that bar. $5 for a CAN of coke at 5-50 pizza at Aria. I think I'm pretty much done with the strip. I might stay downtown, I might just spend the next couple years going to other cities since much like Chuck, I'm not gambling much anymore and I'm enjoying the food diversity. I can do that in San Fran or New York or Seattle or Napa or Berlin or or or or....

Amen. To Chuck’s excellent reporting & analysis, and to every single thoughtful comment above.

I got a reply from a friend who was there for SHOT Show last week. He’s the perfect example of the type of guests MGM wants. Plays, spends, has fun just being there. Copious Mlife free room offers based almost entirely on slot play, and still thinks of Vegas as his Shangri-La.

He claims it was total situation normal, nothing to see here. Good drink service at tables and machines wherever he went. But he’s aware of this situation from previous VT articles and vows to be on the lookout in April. I almost felt a little bad raining on his parade. It could be that they trim hours on the slow days, which is bad for folks like me who prefer to avoid the busy weekends and conventions.

But yeah, this is the all too typical MBA-think bottom-line driven squeezing blood from stone, vs. winning customers thru a good experience and value for dollar spent. Steve Wynn got people to spend buckets of money because the experience was perceived to be worth it. Sad that his organization is also falling victim to this, or I’d consider a return stay.

I can only take so much of Downtown, and haven’t been to the local Indian casino in ages. Maybe it’s time for that to change.

Thanks again Chuck for great investigating and reporting.

They say other cities charge for parking, so that is why Vegas should also. But Vegas is not just any other normal city...I think about my top-10 reasons for visiting Vegas and I really cannot duplicate that in other cities...thus maybe an argument from those MBAs that is why people will pay to park...but IMO just another method of nickeling-and-diming guests.

What really burns me about the MGM PGP is the top brass are the ones to make out the most ($$$$) on the backs of the employees and guests.



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