Founded in 2011 by casino veteran Rino Armeni, the Las Vegas Business Academy is a nonprofit providing scholarship funds to students pursuing a law degree or a master’s in business or hospitality management at the University of Nevada, Las Vegas. LVBA’s program offers educational enrichment, professional development, financial aid and mentoring resources with top-tier industry leaders.
Trying to impose your will on a market you don’t understand.
I was director of front office operations for the Mandarin Oriental when it opened in Las Vegas in 2009. It was a non-gaming, non-smoking luxury brand with limited exposure in the United States, and it opened in the middle of a recession.
We advertised ourselves with an average room rate of $625. We were targeting the traveler who spends $1,000 a night in New York, so $625 would still be a steal. But those travelers are willing to pay that in New York, not Las Vegas. And our main competitor, the Four Seasons, was selling rooms for $199.
We grossly mispositioned ourselves and, as a result, we opened with 23 occupied rooms out of 400 on the first day, an occupancy of slightly more than 5 percent. And we attempted to hold firmly with that positioning. We would not jeopardize the positioning of a true luxury brand.
But after the first quarter of 2010, it came to a point where the financial performance was unstable. So we finally did embrace the local market dynamics, adjusted pricing, and were able to turn the company around. When I left in 2015, it was a financial success, but it took us two years to make it profitable.
Don’t try to impose your will on a market you don’t understand.
Don’t try to impose your will on a market you don’t understand. When in Rome, do as the Romans do.
If you are in a unique environment, you must understand the environment before you attempt to position yourself. You can certainly influence the environment, but you cannot create any tectonic shifts in the local market like we attempted to do.
Photo courtesy of Max Tappeiner