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February 06, 2019
Caesars Doubles Down on Its Non-Gaming Strategy With New Brand
The brand, CaesarsÕ first purely non-gaming hotel brand ever, made its debut during the annual Americas Lodging Investment Summit in Los Angeles this week, with the very first property slated to break ground in Scottsdale, Arizona, by the end of this year.
Ò[Caesars Republic] has much of the same look youÕd have in a Caesars Palace that has gaming, but you remove the gaming and youÕre left with a great culinary experience, great music and entertainment, and live performances,Ó said Marco Roca, chief development officer for Caesars Entertainment. ÒItÕs all the fun youÕd have in the Vegas property, minus the gaming.Ó
The launch of Caesars Republic comes more than seven months after Caesars announced it would license four of its brands Ñ Caesars Palace, Flamingo, The Cromwell, and The LINQ Ñ to hotel owners and developers that want to use those brands to build hotels and resorts worldwide.
Since then, Caesars has opened two beachfront Caesars-branded resorts in Dubai: a Caesars Palace Blue Waters Dubai and a Caesars Resort Bluewaters Dubai. It has also signed a deal to develop a non-gaming Caesars Palace resort in Puerto Los Cabos, Mexico.
The motivation behind launching a non-gaming brand like Caesars Republic, Roca said, was driven by consumer demand, and that non-gaming revenues are driving the companyÕs business, even in traditional gaming destinations such as Las Vegas.
ÒMillennials are no longer interested in a hotel thatÕs just a basic hotel offering with rooms and a bar and a three-meal restaurant,Ó Roca said. ÒThey want curated experiences and shareable moments. The demand for more than just a nice, clean room is there. People have begun to look for things that are other than your basic hotel experience.Ó
In June, Robert J. Morse, president of hospitality for Caesars Entertainment, told Skift, ÒMore and more of our business is non-gaming related. Our group business, our FIT [fully independent traveler] business, I mean, if you saw surveys now, over 20 percent of people who come to Las Vegas say they have no plans of gaming at all.Ó
ÒEvery single year, the portion of revenue coming from non-gaming is outpacing gaming now, particularly when you look at the customer statements of where thatÕs coming from,Ó Caesars Entertainment Vice President and Executive Associate of Hospitality, Dan Thaler, said in June. ÒMost people, historically, thought of Vegas as gaming and then everything else around it. Now, gaming is just one piece of the broader offering.Ó
Roca noted, ÒDevelopers are looking for alternatives and this is why these lifestyle hotels are popping up. Caesars Republic is for people who really want the experience, minus the gaming.Ó
And for Caesars EntertainmentÕs Total Rewards loyalty members, the ability to earn and redeem points outside of destinations such as Las Vegas and Atlantic City, will also be welcome, Roca surmised.
ÒWe have 57 million loyalty guests and they are asking us to be able to burn points in locations other than traditional gaming,Ó he said. ÒThey want the same experiences they enjoy in Las Vegas, somewhere else. If I earn those points in Vegas IÕd like to burn them somewhere else.Ó
When asked if the debut of Caesars Republic complicates CaesarsÕ existing loyalty partnership with Wyndham Hotels & Resorts, Wyndham CEO Geoff Ballotti told Skift, ÒNo, not at all. I think itÕs still very complementary.Ó
Not only that, but the 266-room Scottsdale property will open right next to a luxury retail center, the Scottsdale Fashion Square, reflecting another emerging trend in the hospitality space: the hotels located within or within walking distance of malls to form comprehensive mixed-use entertainment and lifestyle campuses Ñ minus the casinos.
HOW CAESARS REPUBLIC COMPARES TO CAESARS PALACE
Caesars Republic is also different from other Caesars-branded properties, Roca noted, because it will always be a brand whose properties are purely non-gaming.
ItÕs also more limited in its services than a traditional Caesars Palace or even a Caesars Resort or Caesars Hotel would be, and Roca classified it as an upper upscale lifestyle brand thatÕs meant to work both for newbuilds and for conversions in gateway cities such as New York, Los Angeles, Hong Kong, and Tokyo.
Full-service Caesars Palace is a Òfull experience with a signature Qua Spa and multiple restaurants and venues and shopping outletsÓ and ÒCaesars is a step down from [Caesars Palace] with a large spa and a reduced number of restaurants and shopping outlets,Ó Roca explained.
Caesars Republic, however, has no casinos, and Òmore limited food and beverage outlets, although still with celebrity chefsÓ as well as entertainment. ÒIt has a more reduced footprint and more reduced entertainment offering,Ó Roca said.
When asked if the Caesars name may cause confusion among consumers who associate ÒCaesarsÓ with casinos and gaming, Roca said, ÒWeÕre not concerned at all. We donÕt feel that at all because of the locations where this product is going.Ó
Not only that, he said, but Caesars Republic will stand out among its competitive set. ÒWeÕre not a Ôme tooÕ hotel company,Ó Roca said. ÒItÕs not the same basic hotel offering. ItÕs not a boring three-meal restaurant. ItÕs all about edge and entertainment, and taking this to the next level.Ó
Whether WyndhamÕs Ballotti sees Caesars Republic as competition or not, however, itÕs clear that the more Caesars develops its non-gaming hotel development, it is, at some basic level, competing with other well-established hotel companies such as Wyndham, Hilton, Marriott, and Choice Hotels, among them.
And its success in this space will rely heavily on finding the right developments and owners, as well as ensuring clear and understandable branding and marketing going forward.
ÒWe want to go about developing Caesars Republic very cautiously,Ó Roca said. ÒWe want to have the right partners and locations. WeÕre not driven like the same other hotel companies. I donÕt have a quota for meeting a number of deals annually. I never envision 100 Caesars Republics or Caesars Palaces existing anytime soon. We want to have the right locations with the right partners over time.Ó
Copyright 2019 Skift. All rights reserved. From https://www.skift.com. By Deanna Ting, Skift.
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