Marketing to Hispanics is an obvious exercise for an industry whose largest feeder market is one-third Hispanic.
There's also the simple fact that Hispanics are the nation's largest and fastest-growing minority group. And that they are fairly young. The average age of U.S. Hispanics is 26, versus 35 for the total population, latest census estimates show. The casino industry's typical customer is mid-40s to mid-60s — a graying group that can't sustain the industry for years to come.
And yet, Hispanic promotions aren't just another exercise in niche marketing. Besides the obvious growth in Hispanic consumers, experts say the group demonstrates tendencies that are especially appealing for casinos.
Not only do Hispanics gamble at nearly the same frequency as the rest of the U.S. population, they also show more receptivity to advertising than the typical U.S. consumer and a tendency to try new products, said Mike Fitzpatrick, a vice president with market research company Cohorts.
The Denver-based company works with such giants as Target and Kohl's and has helped the Circus Circus casino in Reno identify and market to Hispanic customers in the property's database.
Fitzpatrick said his company, which will be helping Harrah's Entertainment create a comprehensive Hispanic marketing program, uses software to segment households by level of income, cultural assimilation and proficiency in English.
"What trips up many marketers is they try to market to the amorphous combination of any ethnicity," he said. "Hispanics aren't all the same. They are multi-generational, they are third and fourth generation residents and they are folks who came to the country to work for a summer."
They already are coming to Las Vegas in record numbers, while evidence of their spending power is mounting. Some little-known research nuggets:
Last year about 2.4 million U.S. Hispanics visited Las Vegas and spent some $1.7 billion in non-gambling activities, according to the Las Vegas Convention and Visitors Authority, which expects to launch its second flight of Spanish-language print and television ads next year at an extra cost of about $1 million.
Of Hispanic visitors, 92 percent gambled compared with 87 percent of the total visitor population from 2000 to 2004, the LVCVA found. Hispanics paid an average room rate of $81.74 during that period, a tad more than the general average. And Hispanics spent $106.35 on shopping, more than the $99.07 average spent by the total population. The daily spending budget was $232.78 for Hispanic visitors, 4 percent less than the total.
A recent survey conducted by the Travel Industry Association of America concluded that Las Vegas — mirroring the general population — ranks as the nation's top destination for Hispanic travelers.
Another recent study compiled by Simmons Market Research Bureau backs up that claim. Of Hispanics who gamble, 34 percent said they went to Las Vegas compared with only 8 percent of the U.S. population.
A survey by Entravision Communications Corp., which owns multiple Spanish-language television and radio stations — including KINC Channel 15, the local Univision affiliate — revealed that 35 percent of Las Vegas viewers played slots in the past three months, followed by 20 percent who watched a stage show and 13 percent who played video poker.
A study commissioned by Spanish-language broadcaster Telemundo Communications Group found that total Hispanic consumer spending reached $531 billion in 2002. That amounted to $51,208 per household or 81 percent of the U.S. average. Personal consumption spending by Hispanics will grow at an average annual rate of 9 percent through 2020, outpacing the national growth rate of 6 percent.
Casinos have been hesitant to jump into Spanish-language promotions, concerned about alienating their non-Hispanic majority and wary of an unfamiliar culture that hasn't been run through the market research gauntlet. In some cases, marketers perpetuate a stereotype that Hispanics don't gamble or have much money to spend on entertainment.
That's changing as locals giants such as Boyd Gaming Corp. and Station Casinos host more events for Hispanic customers and Strip companies such as Harrah's — working on its first comprehensive initiative — start to take notice.
Like other casino giants, MGM Mirage has run a handful of Spanish-language ads and some others in English-language publications read by Hispanics.
The biggest companies have programs to help promote minorities into front-line jobs such as dealers and front-desk clerks as well as management roles. The programs, less than five years old, also aim to generate business for minority-owned vendors but don't yet involve full-scale marketing programs to various ethnic groups.
Advertising remains a small fraction of MGM Mirage's budget and tends to consist of local ads and ads in trade publications read by event planners and tour operators. Many ads are placed by third parties that sell air and hotel packages to Las Vegas, with few ads placed directly to consumers.
MGM Mirage spokesman Alan Feldman says that's one of the reasons casinos are further behind consumer brands such as Ford and Coke in developing Hispanic marketing campaigns.
"The consumer products world is more linear — they sell to retailers," Feldman said. "Our business is more fragmented."
The company has focused on PR outreach efforts with Hispanic media -- efforts that have quadrupled in the last few years.
Casinos aren't the only local businesses that are behind the curve.
Spanish-language media need to do more to promote the Hispanic market as a gold mine for American companies, entertainment promoter Julio Cordova said.
Cordova is a partner in Elias Entertainment, an Arizona company that books Hispanic acts across the Southwest.
While some events in Las Vegas draw a capacity crowd, others don't, Cordova said.
"Las Vegas is a tough market," he said. "Some people just assume that because it's a Hispanic event that Hispanics will show up."
Most Las Vegas customers come from California, where more than a third of the population is Hispanic and where Hispanics are expected to become a majority by 2040.
The Chumash tribal casino in Santa Ynez is a primary example of Hispanic marketing becoming a necessity.
As many as 40 percent of the casino's staff speak Spanish, while many of the property's marketing materials and musical acts are in Spanish — all the more effective at reaching the roughly 30 percent of customers who are Hispanic. The property also launched a Mexican buffet and a weekly fiesta — including authentic food and roaming mariachis.
Chumash Casino Resort General Manager David Brents says the Spanish flavor hasn't turned off non-Hispanic customers, who return for the atmosphere.
Hispanic guests tend to involve their entire families in activities, which translates into more time spent in the property, Brents said.
"Our Hispanic guests come well dressed and they stay longer," he said. "It's a long night out."
Recent hires: The Aug. 11 column on new entrants to the casino business tapping experienced executives failed to note several recent hires at 3700 Associates, the company building the $2 billion Cosmopolitan casino resort and condominiums at Harmon Avenue and the Strip.
The Cosmopolitan recently appointed former Resorts Atlantic City Chief Executive Audrey Oswell as chief operating officer. Oswell, who was responsible for operations and long-term planning at the Atlantic City casino, also helped parent company Colony Capital raise money for casino acquisitions and expansions. She previously served as president and chief operating officer of Caesars Atlantic City and was the first casino executive in the nation to be appointed to the Board of the Federal Reserve Bank.
The Cosmopolitan also recently hired former Mirage Chief Financial Officer Bob Kocienski and former Wynn Resorts General Counsel Mark Rubinstein.
Liz Benston covers gaming for In Business Las Vegas and its sister publication, the Las Vegas Sun. She can be reached at (702) 259-4077 or by e-mail at benston@lasvegassun.com.