hospitality industry Archive

[An open letter response to Kevin Phelan, Sr. Vice President, Sales & Marketing, BP Products North America]

Thank you for writing to me about how your company is doing everything possible to stop the leak and protect the shoreline. I had a feeling you’d be writing me; I’m surprised it’s taken you this long to get around to it.

I pass several BP stations regularly here in South Florida. I’ve noticed there’s rarely a car or truck in them, and the tone of your letter tells me that you’ve noticed that too. Maybe the number crunchers in your department believed that things would blow over. Maybe you figured we were so pissed off it was prudent to wait. Or maybe you just don’t give a damn.

My money’s on “don’t give a damn,” because your letter is just another attempt to hide behind yet another group of people whom your negligence and reckless disregard is slowly destroying. I’m talking about the “vast majority of [BP] stations [that are] locally owned and operated and employ more than 50,000 people across the United States.”

I do feel sorry for these folks, but I also wonder why they believed in you when your history as an oil company is one disaster after another, and the investigations into those disasters reveal that you knew better but preferred to try and save a buck. A close look at the refinery fire in Texas City or the tundra along the Trans-Alaska pipeline should have predicted what happened on the Deepwater Horizon.

If your independent gas station owners had been taking care of business themselves, they could have already done what thousands of Citgo independent resellers did when their brand became tarnished by its association with Venezuela. They rebranded their stations with a logo that helped sales rather than hurt them.

Yes, Mr. Phelan, I have a BP credit card, but don’t count on my support. I haven’t bought more than a tankful of gas from your stations in several years, and that probably won’t be changing at least as long as you keep hiding behind hollow words on form letters trying to drum up sympathy for people you’ve hurt. They didn’t hurt your brand: you did.

You know how to solve this, because you’ve promised to mend your ways each time you’ve been caught. You can start gushing money in the gulf like your hapless well; you can start selling gas to your resellers at tremendous discounts; you can really put safety first, even though that delays production in ways you once thought unacceptable.

All these things will be a magnificent departure from what everyone expects from you; the story will tell itself, and you won’t need to send weasel-worded letters to your customers.

We learned last week that Harrah’s, struggling under billions of dollars of debt, will postpone the opening of the Octavius Tower, which has been under construction since 2006. The 660-room tower won’t open until demand for Vegas hotel rooms improves. There’s a subtle irony here, for those who know strip real estate history.

The rise of Steve Wynn from slot manager and minority owner at the Frontier, to hotelier controlling the Golden Nugget, came because of a brilliant real estate deal forged between Howard Hughes, banker E. Parry Thomas, Wynn, and Caesars’ (long before Harrah’s was involved). The land was the very property on which today sits the unfinished Octavius Tower.

Power lines at Caesars (click to enlarge)

Its all about those  high voltage power lines that run along the south edge of the Caesars’ property, that jog and run between Bill’s Gambling Hall and Saloon (formerly the Barbary Coast) and the Flamingo. In the 80s, those lines ran a straight line across the street and formed the southern edge of Caesars. Howard Hughes owned the property south of the lines to Flamingo Boulevard.

Wynn was able to convince Howard Hughes to give him an option to buy that land, which was a remarkable feat as Hughes rarely sold investment land, and he let it known around town that he intended to build a casino much like the Barbary Coast. It wasn’t long before Caesars’ was offering the sun, sky and moon, and with the profits, Wynn took control of the Golden Nugget.

So Caesars’ cancelling expansion plans shortly after Wynn successfully opened his Encore expansion has some real historic irony in Las Vegas. Steve Wynn end-runs Caesars’ again!

Like most of our installed infrastructure, motels have been around long enough that there’s a wide range of vintages that await you on the Interstates, but there’s a whole legacy of them that are nothing but memories.

The first motel was probably the Milestone Mo-Tel in San Luis Obispo, built in 1925 halfway between Los Angeles and San Francisco. In the 20s, that distance was a good day’s travel by Model T.  This launched the era of the auto court or motor court and they grew like weeds along the US highways that were our main travel corridors before Eisenhower began building the Interstates.

An old motor court in Ft. Stockton, Texas

A few of these are still in operation, most of them converted to cottages for low income and elderly residents. You find them on the Interstate business routes that often have exotic names like East Motel Drive, or Old Highway 66.

The Milestone Mo-Tel lived a long life as the Motel Inn, and as the longtime home to KVEC, San Luis Obispo. Today, most of it is gone, parking lot for the Apple Farm Inn. Most of its contemporaries are gone too.

The motel business went through some of the same phases as most other commercial archetecture.  During an early period, especially in the West,  we built them like tepees or forts. Those were the days before auto air conditioning, and they worked well with the roadside juice stands built like giant oranges, and frozen custard stands that were giant ice cream cones. They’re pretty much gone.

We’re losing most of the next period too: the motels of Googie archetecture, because these were post-interstate and the sites had value. They’re either right at the Interstate offramp, or they’re ocean or lakeside, and they’re knocked down for condos or more modern resorts. Florida’s Satellite Beach area is a great example.

But that leaves motels from about 1970 forward, and its here that things can get dicey if you’re trying to find a nice one, which is a great subject for another post, another time.

There’s old Vegas and new Vegas, and the line between the two was probably drawn November 22nd, 1989. That was the day Wynn’s folly–the 3,044 room luxury hotel–opened on the Las Vegas strip. The old Vegas casino magnates clucked their tongues about the impossible daily take CEO Steve Wynn would have to pull in just to keep the doors open.

But the Mirage shocked the experts, and it wasn’t long before the old Vegas hands had to make a choice: either emulate Wynn and build mega-resorts in his image (Mandalay Bay) or hold on to the 99 cent cocktail, the free slot pull and the marketing message that Vegas gives you something for nothing.

It really started before the Mirage, when Steve Wynn gained controlling interest in the Golden Nugget, downtown.

The Mirage Today

He swept the sawdust off the floors and brought in decorators who replaced it with marble, which was polished every night.

Fine art went up on the walls, even in the rest rooms, and the staff were schooled in treating guests like they were at the Ritz-Carlton and not at some sleezy gambling joint in sin city.

The buffet, which used to be a way to eat cheap food for a pittance (Circus Circus priced its breakfast buffet at 99¢), cost a whopping $27 for the Cornicopia dinner at the Nugget and included all the steamed crab legs you could eat. Steve Wynn saw Las Vegas differently than it had been seen for decades, and his success in turning a failing downtown hotel into the talk of the town attracted the investors that enabled him to change Vegas.

The old Vegas still lives on, in downtown properties like the El Cortez, owned by the venerable Jackie Gaughan and in some of the downtown and Henderson Boyd properties.

But most of today’s Vegas can trace its lineage either to Steve Wynn, or someone trying to emulate him, and now Wynn has upped the ante in an industry that is hanging on for dear life. Harrah’s and Station Casinos are trying to stay afloat.

When Wynn opened his Encore hotel, a near twin of the hotel that bears his name on the old Desert Inn property across from Fashion Show Mall, and aggressively cut rates to keep it full, he’s changed the game in Vegas again, and while no one is sure how it will come out, my money’s on Wynn. He hasn’t always made the perfect decisions, but he’s rarely made a wrong one.