Diversity to be the name of the future gaming game

Two weeks ago, the Governor’s Conference on Tourism explored the possibilities of its theme, “Celebrating Diversity.” Many of the seminars presented at the event showed that gaming was already a diversified industry.

Judging from the effect on the audience, perhaps the most striking lecture was “Diversity in the Hotel Industry,” delivered by Punam Mathur, MGM Mirage vice president for community affairs and a state tourism commissioner. She discussed the direct economic consequences of the increasingly diverse ethnic, racial and sexual composition of the U.S. population could have on the tourism industry and is worth repeating for those not fortunate enough to have been present.

Mathur argued that in the near future, the success of casino operators as well as most other service businesses across the country will be determined by their assimilation of the growing mix in the population into their workforce as well as by their investments, product offerings and anything else businesses traditionally do.

The statistics bear out the assertion. With a population totaling about 280 million in the 2000 count, the U.S. Census showed that more than one out of every four Americans came from an ethnic or racial minority. In fact, minorities were the fastest growing segment of the populace, with the Hispanic population growing by 57 percent between 1990 and 2000 to surpass African-Americans as the largest minority group with a population of 35.3 million people, or 12 percent of all Americans.

The Asian-American population also expanded vigorously, growing by 50 percent to reach 10.1 million Americans, or 4 percent of us all. In comparison, the African-American population grew a modest 16 percent, totaling 34.7 million, or 12 percent, of all Americans. Nonetheless, all the ethnic and racial segments achieved a faster growth rate than the 13.2 percent for the general population.

Indeed, the census showed that overall ethnic and racial minorities are actually majorities in slightly less than half of the country’s largest cities and the projections show no let up. By the next census in 2010, minorities will comprise onethird of the population. At that time, one out of every five children will be Hispanic, a 22 percent increase, while the population of white children will actually decrease by five percent. In fact, while the general population is expected to grow by 7.9 percent in this decade, the white population will only expand by 6.9 percent while blacks will increase by 11.7 percent, Hispanics by 30 percent and Asians by 31 percent.

Perhaps most startling, traditional families consisting of a husband, wife and children will become an even greater minority, as about two-thirds of all families will be nontraditional.

So what does it mean and who cares? What it means is if you could get one dime from every minority member currently in the U.S., you could quit your day job. The estimated buying power of African- Americans equaled $688 billion this year and is expected to hit $921 billion in five quick years (or four years on Thursday).

In addition, Hispanic-Americans have $653 billion this year and are due to reach $1 trillion in 2008, while Asian Americans hold $344 billion presently and will get $526 billion in 2008 and Native- Americans have $42.5 billion now and will have $63 billion then.

And that is just race and ethnicity. When you factor in the X/Y factor, women have about $4 trillion in spending power today while gays and lesbians, who comprise about 10 percent of the population at 28.1 million Americans, have about $485 billion to spend.

So who should care? If you’re an executive, shareholder or plain old cocktail server, you shouldn’t need a hint to generate a tip. If, however, you’re a casino executive, shareholder or service staff here, then you better start planning to get ahead because you’re already failing behind.

Minorities spent $100 million in the domestic travel market this year, accounting for 19 percent of all the trips taken in the U.S, yet trips that included gaming activities comprised a scant 7 percent of minority travel.

Take African-Americans, for instance. About 25 percent travel monthly and 64 percent take leisure trips. The segment dedicates a larger share of their disposable income on leisure, attend more conventions than any other group and actually prefer gaming destinations. Does it sound like Las Vegas can benefit? Similar travel rates apply to Hispanics, for whom household incomes of more than $100,000 grew by 126 percent in the last decade compared to 77 percent of the general population.

“Are we set up to be successful?” Mathur asks. “If I say to affluent AfricanAmericans, please patronize MGM Mirage but you can’t work here or you can’t run one, it won’t work. Does it make sense to say to [Hispanic-Arnericans], spend with us but we’re not spending money on Latino businesses?”

Meanwhile about a third of all AsianAmericans, who have the highest average income and level of education of any group, travel monthly and 60 percent take vacations. Is anyone targeting them in their ad campaigns? It wouldn’t take much, since more than 60 percent live in the western U.S.

“It’s an easy drive to Nevada,” says Mathur.

What about sex for Sin City? Almost one-third of all women have household incomes above $100,000 and women decide 70 percent of all travel plans. With fewer children and thereby more disposable income, gays and lesbians are an even more lucrative market, with 97 percent vacationing in the past year compared to 64 percent of the general population. In fact, 56 percent of gays and lesbians have taken three or more vacations in the past year and are willing to pay higher prices as long as the destination shows more openness to them.

“You will not find higher loyalty than this market segment,” Mathur says. “That’s particularly relevant because they can afford to travel.”

Mathur showed the strides taken by her company. With 41,695 employees working for MGM Mirage, 51.7 percent are minorities while 28 percent of the 2,594 managers and executives are minorities. In addition, of the $680.5 million the company spent on other businesses in 2002, 9.56 percent, or $65 million went to minority- or women-owned businesses, with 22.7 percent of MGM Mirage’s $57 million construction spend, or $12.9 million, going to minority- or women-owned businesses.

Although straight white guys are already a minority, the segment still predominates the marketing of the gaming industry here. Mathur promotes broadening the approach to be more inclusive, noting that economic sense can overcome any resisting social nonsense when it is made plain.

“Diversity in business is an imperative,” she says. “[The question is] how will a valet parker’s tips be affected by diversity? If you can’t see the finish line, you’ll never make it. [Our method] is education, education, education.”

Copyright Las Vegas Business Press Dec 29, 2003