Monday, January 10, 2011

Palms a good fit for Caesars Entertainment?

News has surfaced that Caesars Entertainment parent company TPG Capital, along with Leonard Green & Partners are in talks to take a controlling stake in the Palms. This has fueled speculation that Palms will become part of the Caesars Entertainment "Evil Empire" as some have called it. People are assuming that Palms will join the Total Rewards network as a result of the move.

If this transaction does happen, I have to wonder if the Palms is a good fit for the Caesars Entertainment portfolio. Palms is unique because it is part locals casino and part celebrity hot spot. Caesars on the other hand is known for running tourist casinos with less than favorable odds on their games. If Palms is acquired by Caesars it will be interesting to see if they choose to keep the locals happy, or focus more on pushing tourists off the Strip.

I have a feeling that Caesars will take the latter approach and will concentrate on the tourist dollar. I think they will use the Palms trendy reputation to market to their younger Total Rewards members. It will give them a hip hotel to market at reasonable prices, but will they keep payouts high to hold on to the locals? I guess we'll have to wait and see, if the deal even happens at all.