True. He probably got that last part wrong.Originally Posted by mickeycrimm
Two things about the article
At Walmart I buy the 40 packs of 16.9 ounce bottled water for $5.36 plus sales tax if applicable. I carry bottles into every hotel room. I refuse to get gouged for water.
And, MGM is going to sell a lot more bottles of water at $3 a pop than they did at $6 a pop. Meaning the 3 mill loss is an overestimate.
It's the old "Lemonade Stand" concept. Remember that game from the '70s? They brought it to my elementary school and let us play it on the Apple II computers which had been donated. Anyway, I found it interesting as an 8-year-old because it introduced me to merchandise pricing concepts. Initially I tried to charge a ton of money for my lemonade in the game, only to have nobody come buy it, my lemonade going to waste, and booking a loss for the day. Then I tried to make it super cheap, and I ran out of lemonade fast, yet barely made a profit. It took a bit to find the sweet spot of the correct price to charge, to where demand would still be high, yet I'd make maximum profit.
I enjoyed the game so much that I made my own version for the IBM PC in the mid '80s, seeing that it hadn't yet been created. I distributed it as freeware. Probably can't be found at this point.
Anyway, back to MGM. You're correct that they'd sell a lot more water for $3/each, and probably make more profit overall.
That was always my argument about other expensive hotel things, such as pay-per-view movies (before it was easy to download movies on your computer or iPad), and minibars. I said that people wanted this stuff, but wouldn't pay the outrageous prices. I said that they'd do way better overall if they dropped the price to at least be in the ballpark of reasonable.
Mirage was at least smart enough to carry high end water, so when they charged $17/bottle, it didn't seem quite as bad. I mean, it was bad, but at least you knew it was premium water. Hilarious that MGM was dumb enough to carry a brand sold in 24-packs at Walmart. Fail!!!
BTW, one time Vegas Matt was filming at Mirage, and I was staying there. I was invited to come down and be part of the show that day, so I did. I was mostly in the background and not seen much, but one of Matt's sidekicks (who is a PFA radio fan) offered me a water. It was one of the $17 waters! I said, "Oh, I can't take that from you, it's $17 water!", and he insisted he got it comped as part of their action there, so I took it. But before he explained it, I legit felt guilty about taking the water and costing poor Vegas Matt $17!
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