Vol. 3, No. 12, December 2007
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Gary Selesner
President and CEO, Caesars Palace
Casino Connection: You’ve been head of Caesars Palace for a little more than two years now. Reflect on that time and what you learned about operating one of the most recognizable hotels in the gaming industry and indeed the world.
Selesner: I feel blessed and fortunate that, at this time in my career, I have been able to work here. It’s been a dream to run this hotel and it’s an honor to have this position.
It has been a tremendous experience; very positive in almost every instance. The assignment when I was brought in was very simple. We were to merge two great companies’ mindset about how to market this property. Some people expressed fears when Harrah’s acquired Caesars that Harrah’s didn’t know the luxury business that Caesars was in. So when we came in, we came in with a soft touch, at least initially, trying to respect the great traditions that had been established here during the 41-year history of Caesars Palace. The job was to preserve the best of those traditions, especially as it pertains to the high-end product. With the best villas in town, we’ve actually been able to grow the high-end business. At the same time, we’ve been able to plug into Harrah’s expertise at slot marketing and middle marketing with the integration of the Total Rewards system. This has dramatically grown this segment of the market. We’ve managed to grow all revenue streams. We’ve managed to find that sweet spot where we continue to position the property at the high end, but also build the value of the brand.
You announced an impressive expansion over the summer, on top of some just-completed projects. Why have you decided to forge ahead so soon after the last expansion?
First of all, because the last one was so successful.
Looking down the road, there’s a lot of competition coming, especially in the luxury section of the market. In one respect, it’s a way to prepare for that competition, but also to expand and enhance Caesars Palace so it can be the flagship of the company as we grow internationally.
Explain the details of the expansion project.
Most important is the addition of the Octavius tower. This is further west on Flamingo and it will create an octagonal pathway around this property, which does not exist now. It will improve traffic flows tremendously.
At the base of that tower will be three poolside villas, which will join two other villas at the pool and six penthouse villas. We’re also renovating the Forum tower, parts of which have not be fully renovated since it opened, including the famous suite that was in the Rainman movie.
We’re also renovating the sports book, the food court and the older of the two areas of the convention center and adding 260,000 square feet of meeting space. That will give us a dramatic presence in that market.
Most visibly, we’re going to renovate the entrance to Caesars Palace, which had a very low ceiling. Much of it is iconic so we’re going to take a contemporary approach to similar designs.
Let’s talk about entertainment. Celine Dion is ending her incredible run at Caesars later this year. People forget that was a very controversial decision when this show was announced. You’ve already announced that Bette Midler would take her place. What is your philosophy in regards to entertainment?
You’re right. The decision to build the Colosseum and bring in Celine was widely questioned. But it’s turned out to be very important to the repositioning of Caesars Palace and regaining its place at the top of the market.
Our customers have come to expect the biggest entertainment in the world from Caesars Palace. There’s a legacy there from the days of Sinatra and the huge fights. The Colosseum was a natural extension of this legacy.
With Celine leaving, we will bring in the same big-league entertainment that our customers expect. It’s very difficult to compare someone with Celine. We think we’ve found that with Bette Midler. She’ll do a different kind of show. We expect it to be a mixture of music, comedy and variety. Still a major entertainment experience that the market demands.
Sports has always played a big part of the Caesars Palace history, with the huge prizefights and other events. We haven’t seen much of that lately, except for some mid-level fights up front in the plaza. Will that make a comeback of sorts, especially with the announcement of the new arena Harrah’s made recently?
We no longer have the outdoor arena where so many of the great fights were held. It’s going to become part of the expanded convention center. In the past few years, we have invested in fights at the Thomas and Mack Center, some in partnership with Wynn Resorts.
They have been quite successful, generating excitement on the property and giving us the ability to bring many of our customers to the fight. We will continue to invest in these kinds of fights when it makes sense for us.
With the announcement of the new arena, you can see that Harrah’s Entertainment is really taking off. In the center of the Strip we have a commanding position and we work very hard to market all of our properties together.
By building an arena in the middle of all those properties, we create an exciting attraction that will benefit all our properties, as well as Las Vegas. I think that will be our play in the future in terms of major sporting events.
Caesars Palace has some incredible dining options. In the past few years, you’ve installed restaurants by some of the world’s greatest chefs: Bobby Flay, Bradley Ogden, Guy Savoy, Jean-Marie Josselin, François Payard, and now Rao’s. How has that impacted your customers and have they responded?
The collection of celebrity chefs and great restaurants now at Caesars Palace are unmatched in the industry. They are great chefs, but they are not overexposed. In many cases, Caesars Palace is the only other place you can go to eat at these restaurants. We’re very careful about who we pick as our partners. Key members of the staffs and the families who run the restaurants are involved in the operations of their restaurants at Caesars Palace.
With all the fabulous amenities here, do you still consider customer service your most important asset?
The employees are absolutely essential to our success.
I speak with many of our loyal customers and ask them why they keep coming back here and they tell me about this baccarat dealer or this front desk clerk and that’s priceless.
We have a great pool of employees who are fiercely loyal to Caesars Palace. We have asked them to embrace our customer satisfaction program, which is common to all Harrah’s casinos throughout the land, and provides bonuses to employees who reach certain goals. Our customers are surveyed on the level of customer service provided at each property. Employees earn bonuses by increasing customer service by 7 percent in any given quarter. Caesars Palace employees have been able to improve customer service by the maximum amount and have earned the maximum bonus they can earn for five successive quarters.
We have a great nucleus of employees. We have given them the tools and a different way of approaching customer service and they have responded.
For our company, increases in customer service is correlated with increases in profits. While we have been increasing customer service, Caesars Palace profits have increased dramatically.
With Wynn and the Venetian having properties in Macau, have you seen any drop-off in Asian business here? Or is there actually an increased desire for Las Vegas when Asian customers visit Macau?
This has truly been a surprise. With the expansion of gaming in Macau, I think everyone expected that business to drop off.
Asian business is up. The Strip’s numbers have been propelled by baccarat. Caesars has been marketing in this area for 30 years. We have marketing offices in Hong Kong, Tokyo, Singapore and elsewhere. We’ve had to work harder because of Macau, but the reality is that Macau is creating new customers every day. At some point, a lot of those customers want to come and see what Las Vegas is all about. In the last year, we’ve seen a record number of new customers coming out of that region. I expect that to continue, but it would not continue without the great work of our team in that region.
Harrah’s clearly sees Caesars Palace as its flagship. Does that put any extra pressure on you to lead it in the right direction?
It makes it more fun and makes me realize what an honor it is to lead this iconic property filled with long-time employees. We will continue to enhance, add to and improve this property so it can be the flagship for future Caesars Palaces. It’s an awesome responsibility to be creating things that will be brands for future Caesars Palaces, so that really colors your decisions. That’s a big responsibility but I’m blessed with a tremendous management team and employees with whom I’m very proud to be working.
