Vegas: I Love You But Stop Fiscally Sodomizing Me!

Vegas: I Love You But Stop Fiscally Sodomizing Me!

I love Las Vegas. I love the people, the atmosphere, the gambling, the lifestyle, the lights, and the glamour. I love it all. For all that, there is one thing I have come to first dislike, then resent, and now hate with a murderous fury: the price of a drink.

Yes, I'm aware that drinks can still be had for "free" at the gaming tables. Yes, I'm aware that high rollers are getting this stuff comped... probably even medium rollers. I'm also not talking about the $200+ bottle services at the ritzy night clubs... you're paying for the club as much as the drink. I get that; that's not my beef.

My beef is, quite specifically, with the price of a drink you walk up and order at the bar. It's not just Las Vegas either... other hotels and metropolitan areas are awash in massively inflated prices for garden-variety drinks.

Two examples:

  • I ordered a round of Mojitos at the Caesar's Palace Pool (an astonishing, hedonistic place littered with pretty people looking and being looked at) fully recognizing that I'm paying for a bit of atmosphere. But they came back at $16 each. They were nicely prepared and used fresh mint. But the base rum was Cruzan—a fine rum but it comes in at $12 a bottle... retail! A lime at $1, a measure of Cruzan at about 90 cents, a little simple syrup and soda water at just about free... and you're looking at a drink that cost the casino maybe $3 in raw costs.

  • I ordered a round of shots at a casual bar in one of the Vegas malls on the strip (a nice place with ample people watching) recognizing I'm paying for some real estate. I asked for a honey liqueur—either Beam Honey Bourbon, Jack Daniel's Honey, or Dewar's Honey—and asked them specifically not to overcharge me because I was buying 12 of them. The bill came back at $152. That's $12.66 per shot. The whole bottle costs about $27 (retail!) and without a fraction of the preparation costs associated with the Mojito at the pool. After all, we're talking about lining up 12 glasses and doing a straight pour.

Cocktail pricing is pretty variable. There's a great article at Serious Eats (Roger Kamholz) Where Do Cocktail Prices Come From discussing this phenomenon. In it, he mentions "pour costs," that is, the percentage in raw costs in the retail price that this is usually around 20%. He also points out that most establishments are trying to make margins of around 10%.

Let's go back to my experience. That mojito, which we're guessing was about $3 in "pour costs" would suggest a total cost of $15. In the Dewar's example, were' looking at about $2 in pour costs suggesting about $10 per drink. Suddenly, these Vegas prices I'm paying don't look too far out of line.

But let's go back to the original assumption: this premise essentially assumes that Pour Costs + Margin + Other Costs = Retail Price. Using a little junior high algebra, you can move that formula around to see what the "other costs" (atmosphere, real estate, and everything else) is theoretically costing: that is Other Costs = Retail Cost - Pour Costs - Margin. In the mojito example at the pool, this means Other Costs = $16 - $3 - $1.60... or, $11.40 on every single drink is going into labor and everything else. That's 71% of the entire price of the drink!!!!! The other example is no better: Other Costs = $12.67 - $2 - $1.27 meaning that $9 of every shot is "everything else" or, once again, about 71% of the price of the drink! That makes complete sense when you think about it logically: if pour costs are 20% and your expected profit is 10%... then the rest of the price must equal 70%.

This, to me, is a real problem. It's a problem because everything else I buy doesn't enjoy this kind of mark-up. The only place this bears a resemblance to is the mark-up for a hotdog at a baseball game. The poor guy buying the drink recognizes that 70% of what he's paying are costs he wouldn't normally bear at home if he'd done it himself. In other words... I'm already participating in the venue, I'm already soaking up the atmosphere, so why should I continue to pay that 70% each and every time I order a drink? This leads to behavior like:

  • Trying to sneak in your own alcohol,

  • Nursing drinks over long periods of time,

  • Steering purchasing decisions towards cheaper items,

  • Stiffing the staff on the tip,

  • Leaving early, and—did we already mention—

  • Trying to sneak in your own alcohol.

Vegas is one of those few places on earth—as opposed to sports stadiums, movie theaters, and grade school Christmas programs—where I never expected to see full-grown adults sneak their own booze into different establishments. But I saw it everywhere the last time I was in Vegas. I saw it in the pool cabanas (we brought in ours in the backgammon game), I saw it in the restaurants (one enterprising fellow was filling his glass up out of little bottles he carried in his pocket in the bathroom), I saw it in the casino itself (many people poured drinks in their hotel rooms and carried their drink around the casino, returning to the hotel room whenever they wanted a refill), and I saw it in the dance clubs where bouncers were consistently searching people not for weapons but for smuggled booze. It's like Prohibition in Vegas all over again but this time it's market forces rather than the Fed responsible!

The other issues are problems as well and it all leads to putting a damper on the evening. Alcohol should be about lubricating revelry... not about illicit and high schoolish behavior. One of the things that made Vegas was the ready availability of alcohol in the gaming areas and most other places. That availability enabled everything else. Trying to turn that enabling component into a profit center is the equivalent of lowering the tide for all ships. It's a terrible mistake and I'm personally sick of it.

By the way, casual Google searches suggest food costs for restaurants are around 35% rather than the 20% associated with "pour costs." That puts a different lens on thing. Add on to this fact that a happy, inebriated person who feels he's getting a good deal on booze now has cash and credit to spend more willfully on everything else the property has to offer (the very essence of the free drink at the Blackjack table in the first place, right Las Vegas?).

The thing that makes me the most deeply unhappy, though, is the damper it puts on experimentation. No one wants to try unknown drinks on a menu that costs so much money. They're going to go back to beer, shots of cheap spiced rum, or whatever the hell else it is that they're used to. They're certainly not going to be looking for craft vodka; exotic liqueurs; or premium end whiskeys at those sorts of inflated prices. That's a terrible shame because Las Vegas and similar places are avenues for "spiritual explorations" in this regard. I should want to try a 30yr old scotch in Las Vegas where I might never buy a bottle at home and Las Vegas should price their stuff to help me do just that!

Until things change, this is one liquor nerd who is now committed to carrying flasks and anything else I can get away with all around Las Vegas until I see the pricing change

by Neal MacDonald, editor

PS—the pricing, by contrast, was absolutely splendid at the Strip's new LINQ. I highly recommend that as a drinking venue.

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