Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Eric Wold – Merriman Curhan Ford.
Eric Wold – Merriman Curhan Ford
I guess two questions on your comments toward the end. One on Vegas, you talked about what experience you've seen in the past when there has been cab wars in the past and you've had some market shares shift and then you kind of revert back to maybe more normalized cab [inaudible] what happens to market shares after that? Do customers return back to where they were before or do they tend to stay to where they are going to now?
Eric Langan
Well, you've got to remember, in our industry it's all about the girls. So he who has the girls can have customers and he who has customers have the girls, so it's really a chicken and egg and which came first. So the trick is, of course, keeping the girls and the customers on a platform.
So as the marketing costs come down, some of the customer count may come down initially, but it's just really more of a matter of keeping the girls happy and keeping the girls there and then the customer base will always return. The guys go where the girls are.
Eric Wold – Merriman Curhan Ford
What's happened with the payments the girls are making to work at the clubs during this trip in Vegas?
Eric Langan
They are probably some of the highest levels they've been.
Eric Wold – Merriman Curhan Ford
Do you think that's sustainable? Once the war ends.
Eric Langan
We're still below everyone else so I think our numbers are sustainable. I don't know if some of the other clubs are. Some of the other clubs offset have gone to like $50 to get in the club, 2 drink minimums, they have raised the house fees on the girls $50. They've done a lot of things that’s hard to offset those expenses. We've just kind of kept right on eating the losses that we had been sustaining before. We are happy.
When I set out to do this I really thought that we would increase our losses by about $250,000 a month. And I figured they would last about three or four months. What has been amazing to me is not only have I not seen those losses, I have actually lost less money than I was losing before. And when I went out there and we talked about doing this and we did all the numbers and I crunched everything, I could not foresee how rapidly the change would be.
- To read the full transcript on Seeking Alpha, click here »
