ATLANTA—Transitioning into the gaming industry from the world of hotels isn’t all that daunting when your job functions include instituting a hotel mentality into casino operations. Mike Leven, president and COO of Las Vegas Sands, is finding out first-hand a lifetime spent in the hotel industry can provide a big payoff even when switching industries toward the end of a career.
With a gleam in his eyes, Leven said during an interview held during last week’s Hunter Hotel Investment Conference that he was having the time of his life helping LV Sands Chairman and CEO Sheldon Adelson integrate the company’s properties in the United States and Asia. As he prepares for this third anniversary with the Las Vegas-based gaming giant, Leven said he enjoys what it offers.
“I turned (Adelson) down originally, but due to the advice of a very close adviser to me, my family, as well as my wife, they said, ‘You’ve got to take the challenge,’” Leven said. “I thought at 71 years old it was ridiculous because I was running the Georgia Aquarium at the time and was having a nice time feeding my fish in the morning.”
Now three years after accepting the challenge, Leven is helping to integrate a hotel mentality into an industry that, for most of its past, looked at hotel rooms as a necessary evil.
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Mike Leven, president and COO of Las Vegas Sands |
“In the United States, the gaming part of the business has changed dramatically over the years, so you just don’t give rooms away,” Leven said. “You have to look at them in terms of the whole revenue-management scenarios.”
That’s where the crossover between gaming and hotels has occurred.
“There’s an enormous integration between hospitality and gaming,” Leven said. “For the first time, we have been able to prove that the mixture of both hospitality and gaming works. Usually it’s either one or the other, it’s either gaming or it’s hospitality. We put it together, and by operating the properties the way we run hotels and by managing the gaming business in the way that maximizes profitability, we’ve been able to turn the company around.”
Bouncing back from the bottom
When Leven joined the company on 1 April 2009, its stock was trading at less than $5 per share. A few weeks earlier in March 2009, it bottomed out at $1.42 per share. The stock closed Wednesday at $58.03 per share. Part of the credit, Leven said, can be attributed to a hotelier’s way of thinking.
“We had to manage differently. We had to take advantage of what was really good and really important about the gaming part of the business and about the convention, meeting and transient part of the business, as well as the various segments that all the hotel companies do business with,” he said. “The hard part was getting it executed because there was a fallback. People tend to fall back to what they’re comfortable with. Hotel guys get comfortable with hotels. Gaming guys get comfortable with gaming. My job is to put them together so that the marriage works.”
Leven’s hotel career has spanned five decades, during which he was the leader of Holiday Inn Worldwide and Days Inn. He also launched the Microtel brand, U.S. Franchises Systems (since acquired by Wyndham Worldwide Corporation) and was a co-founder of the Asian American Hotel Owners Association. That stability and versatility has been an asset to him in his current capacity.
“The most important thing that I brought to the table was the ability to look at the entire business in terms of its segmentation,” he said. “I’ve always been a segmenter going all the way back to the ‘60s and ‘70s in terms of how the business developed for an individual property and for a region and for a chain.
“These businesses are massive. We have 40,000 employees and an (earnings before interest, taxes, depreciation and amortization) that’s bigger than four of the largest hotel companies in the world combined,” Leven added. “… You get specialists. I knew that from the hospitality business, and my job is really to put the silos together to a common purpose, and that’s essentially the way we try to run the business.”
Hotel brands have work to do
Leven, who has been known as a sales-and-marketing expert throughout his career, said the climate in the hotel industry smells of change—especially in the brand arena.
“Brands are looking for a change,” he said. “The competition amongst the big brands today for share has been in recent years about what kind of a point program you can have or what kind of a bed or duvet that you can put on the bed. The future of these brands that are so big, it’s going to be difficult to justify some of their cost structures for owners in particular when they’re all in the fee business.
“In the next 10 years in an improving hotel cycle, brands are going to have to work a lot harder at getting a higher share of the marketplace,” he said.
He said a recent conversation with a hotel-brand president revealed that even people leading brands are having a hard time differentiating them from their competitors.
“You’re going to see brands paying a lot more attention to how they’re going to make their property and their service level and their rooms different,” he said.
Mike Leven, a hotel-industry icon whose career has spanned more than 50 years, had this advice to young hoteliers who want to get ahead:
“Don’t just take a job that’s going to be paying you more money to do the same thing. Do something different every couple of years to get more broadly experienced in a variety of situations. When you do that, stay long enough so that you become a reasonable expert in it. Then move on to something else, even if you take a step back financially.”
The president and COO of Las Vegas Sands said the broader a knowledge base someone has of the complexities of our business, the better they will be as a leader later.
“We need leaders to come up that have sensitivity for the whole variety of people that you run into in this business in the properties and outside because we’re a global business,” he said. “That’s the fun of it. But you’ve got to know how things work. You’ve got to study not only your food costs, but you’ve got to study a little political science and a little psychology along the way.”
Leven was emphatic when he extolled the hotel industry for the opportunities it provided him.
“I would wish that every single person in this business would have 51 years that I have had, even with the ups and downs,” he said. “It has been a fascinating, rewarding and amazing career for me. I stepped out of the business once and became a meeting planner actually, which was a great experience because I learned from the other side. It’s always helped me in understanding what’s wrong inside (the industry).
“It’s OK to step out and step back,” he added. “Too many people go from one job to the next which is exactly the same for a few thousand dollars more. That doesn’t do it. That’s just doing the same thing over again. If you really want to build your career, do something different, even for the same money. Just build your resume, which is essentially your ticket. … That’s what I tell the kids in schools when I talk to them. That’s what I tell my sons. And the more experience you get, there is no substitute for that.”