Friday, April 24, 2020

The new normal




There are a few ways that the current global situation ends - the most extreme is that civilisation falls, the infected turn into zombies after they've spent too long injecting themselves with bleach and inserting UV lightbulbs up their arses in a futile attempt to cure themselves and spend their days seeking out the healthy in order to crack their heads open and feast on the tasty treats inside. Those who remain uninfected spend their days avoiding the zombies and trying to scavenge enough food to make it until the next day. There are no farms, utilities or power because .... well, civilisation has fallen. At least the zombies will be easy to spot if you have a UV sensitive camera or happen to be a bee (which can see in UV) because the zombies still have a UV light stuck up their arses. Fuck knows what any invading alien species will think when they finally invade and find millions of corpses with UV lights lodged in the bodily remnants of the fossils they find.

The other extreme is a return to normality. At the moment, without a vaccine and without knowing whether recovery from infection provides lifelong immunity this scenario is just as unlikely as the first.

I think we'll see somewhere in the middle. This may take far longer than most people think - I'm guessing sometime towards the end of this year but it will certainly be measured in months, and not days. It will become the new normal, at least for a while anyway - but anyone expecting things in Vegas to change will be in for a very rude awakening. I've read numerous tweets, blogs and news stories about Vegas in the last few weeks and they all have one thing in common - what will Vegas be like when we get to the new normal?

The consensus is that things will change: room rates will decline, resort and parking fees will be dropped and everything will be done in order to entice people back into town. This is rubbish, in fact I think they'll do quite the opposite - rates will increase, more fees will be implemented in order to squeeze every last dollar (forget nickel and diming now, they want paper money not pocket change).

"What the fuck have you been smoking?" might be your response but hear me out. The new normal is where economics is turned on its head - I mentioned a few blogs back https://ayecarambapoker.blogspot.com/2019/12/lies-damned-lies-and-statistics.html?m=1 what I do for a living so I (sometimes at least) think my thought process is rational and I might be on the right track. 

In a normal situation there is one thing a supplier can do to stimulate demand - reduce price. It's a basic tenet of supply and demand that demand increases as prices drop (there are certain situations where the opposite is true but these are called Veblen goods - think fancy perfume or celebrity endorsed goods, if the price of smelling like Britney Spears's Snatch is $2 then no one wants it but increase its price to $100 and it's suddenly more desirable). 

So let me get back on track - in the new normal there are still social distancing restrictions meaning that tables can only seat 3, 1/2 the slots are removed or kept dark and restaurants and bars are only allowed 30% occupancy. In short - Vegas doesn't want to be full. Far from it. They don't want 100% occupancy in cheap as chips rooms when people can't drop a few hundred bucks a day into slots or on table games. They only want to attract 2 types of people - the first being the total degenerates who come to gamble away every dollar they have and have missed the place so much that they don't care about the price (we call this price inelasticity) and for the second group we're talking about whales, Moby fucking Dick. These are the guys who will keep the lights on in the new normal. They don't want people like me there (to be honest did they ever want me there in the first place? But I wouldn't want to be a member of any club who wanted me to join!) as I don't fit into either category. So they won't try to attract people like me, if you find yourself being targeted by Vegas you're either the Moby Dick (in which case congratulations and can I please borrow a few quid?) or you've got one hell of a gambling problem. 

But I'm just a monkey throwing darts at a dartboard, what do I know? 

Please let me know if you agree or disagree in the comments below. 



3 comments:

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  2. I'm actually with you on this. Wynn, Bellagio, Venetian, etc. haven't torn down Boardwalk offer you $5.99 steak dinners. If we recover at limited capacity you get the big gamblers back first. Then you hike rates once you get back to 100% capacity because the others come for all the other stuff other than gaming.

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