Problem Identification

Problem Identification

Nicholas Pedroza, Trizah Morris, Steve Hrustyk, Eric Lee and Jose Saravia

PHL/320

October 05, 2016

Edward Douglas

Problem Identification

Rather than constructing convenient parking or arranging parking in the best interest of the public, MGM Resorts built the T-Mobile arena without planning for parking.  As a result, MGM Resorts has reported that even if you valet as a guest at one of the hotels, they will be implementing a $10.00 per day parking fee at MGM Resort properties.  

This is a serious issue for Nevada residents, guests from California, and tourists who rent cars that need to park at one of the many MGM Resorts.  Clearly MGM resorts did not consider the rise in cost for those “spur of the moment” visitors who love to hop in the car and enjoy an inexpensive trip to Las Vegas.  The financial ramifications and repercussions start out an average of $30.00 extra for parking per trip and the price goes up if several MGM Resort properties are frequented during a visit to Las Vegas.  

The excellent customer relations that MGM Resorts provide are what keeps guest consistently returning to MGM Resorts’ properties.  MGM Resorts announced their $90 million parking strategy would start June 06, 2016.  The parking fee rates are as follows: $7- $10 self-parking, $13-$18 valet, and $30 for lost tickets.  Nevada residents are free until 12/29/16.  Many patrons of the company, expressed disgust with MGM Resorts parking fees imposed on patrons visiting their properties on the Las Vegas strip.  Many loyal and long-time patrons who frequently visit Las Vegas announced that they are forced to remove their allegiance with MGM Resorts.  Hence, many patrons threatened to take their patronage to competing resorts in Las Vegas.

As a result, a possible problem is MGM Resorts will lose revenue from patrons that frequently visit their resorts due to the parking fees.  None of the other competing resorts on Las Vegas enforces a parking fee.  Patrons of MGM Resorts will book accommodations and dine at competing resorts to avoid MGM resorts’ parking fee. In fact, when one surfs the web, you are able to find numerous partitions to boycott MGM Resorts.  Patrons who frequent MGM Resorts are asking other patrons to boycott MGM Resorts until they no longer impose the parking fees.  Many feel that MGM Resorts patronage to their resorts will suffer, and staff at their facilities will see a decline in tips.

The decision made by the top brass at MGM properties to increase revenue by charging their guests for parking may prove to be a poor business decision in the end. Competition for business is fierce on the Las Vegas Strip, and many of the other properties that compete with the MGM are sure to be chomping at the bit, and are working diligently to offer the once loyal MGM clientele hard to pass incentives to come over and give their properties a try. Casino Executives are in a constant battle, having to compete and come up with new and exciting offers to generate new business. This move by the MGM Resorts could be looked at by the competing properties as a gift, because these other properties are sure to increase their business with the local and out of town clients that would rather spend their hard earned money on their experience, and not parking. This is a golden opportunity for other properties to treat these guests extremely well and provide them value, along with a great experience where they do not have to shell out for parking.