Article Date: 9/1/2006

business advisor
Lessons from Las Vegas

Your patients aren't always looking for the best deal.
JERRY HAYES, O.D.

Are you one of those owners who doesn't want to raise fees because you're afraid of losing patients? Assuming that you have a reasonably good location, a nicely decorated office and an efficient, well-trained staff, I have some advice: Please quit worrying so much. Your middle and upper income patients don't want cheap, they want nice.

Go upscale

If you don't believe me, just look at the startling transformation Las Vegas has undergone in the last decade. Historically known for luring gamblers with $9.95 lobster buffets and $49 rooms, Las Vegas has gone upscale — big time. Last year my room at the Venetian cost $275 per night and dinner with a group of optometric colleagues at a fancy French restaurant cost $100 per person.

If you are one of those optometrists who thinks consumers go elsewhere when prices go up, then you would assume that traffic has to be down in Las Vegas. But just the opposite has occurred. The city is booming!

Take room availability for Vision Expo West. As of this writing, approximately six weeks prior to the meeting, the Bellagio, a five-star property with 3,000 rooms, was quoting $459 per night for September 16. That's about five times what the average optometrist charges for a basic exam. Of course, the Bellagio doesn't have to contend with managed care. But they do have plenty of competition as Las Vegas has more than 125,000 hotel rooms. 

Quality draws a crowd

With that much supply, there have to be a lot of cheap alternatives for places to stay, right? I checked with the desk clerk at the 'Best Western Mardi Gras' in Las Vegas and she told me they have plenty of their 314 rooms available for only $95 per night. If everybody wants cheap, why don't those sell out rooms first? The reality is that the overwhelming majority of visitors are willing to pay extra to stay at premier properties like the Bellagio and the Venetian.

The same thing goes for entertainment in Las Vegas. You can easily get a last-minute seat for a low-cost, even free, show that would be a big act back home. But try buying a $110 ticket (that's $220 a couple, enough to buy a nice pair of glasses in most practices) for Celine Dion, Danny Gans or Cirque du Soleil. They sell out months in advance. That's because middle and upper income consumers don't want the best deal, they want something special.

Another surprising development in Las Vegas: Business is so good in these high-quality venues, revenues from non-gaming sources such as fancy hotels, expensive restaurants and big name entertainers now exceed gambling income. The executives running these mega resorts have discovered our point: class outweighs cost.

Here's the catch

Even though they have a lot of disposable income, consumers at the middle and upper end of the market are quite discerning, which means they aren't going to pay $459 a night to stay at the Best Western. They want something nice. They want the Bellagio. As I mentioned above, if you want to attract this crowd, you must have a reasonably good location, a nicely decorated office and an efficient, well-trained staff. Just be sure to charge the proper fees.

THE FOUNDER OF THE HAYES CENTER FOR PRACTICE EXCELLENCE AT SOUTHERN COLLEGE OF OPTOMETRY IN MEMPHIS, DR. HAYES IS A REGULAR CONTRIBUTOR TO OM. E-MAIL HIM AT JHAYES@HAYESCONSULTING.COM.



Optometric Management, Issue: September 2006