Aug. 7--When the Tropicana opened in 1957, it was called "The Tiffany of the Strip." Today, 44 years later, it occupies one corner of the busiest intersection in Las Vegas, surrounded by megaresorts. 

A little more than a year ago, the Tropicana brought in veteran hotel/casino executive Hector Mon as president and general manager. Lasvegas.com columnist Len Butcher talked to Mon about the aging property and the industry in general. 

QUESTION: What were some of the challenges facing you in taking the helm of a property like Tropicana and how did you address those challenges? 

ANSWER: The biggest challenge was more competition in town, which meant new choices and exciting properties for customers to see. The first thing we had to do was to clarify our positioning in the minds of our team and improving our execution of that strategy. Were we a high-limit, table-game place? Could we compete with some of the themed resorts in town? Where is our future? 

Q: Have you fixed a niche for the Tropicana, and if so, is it proving successful? 

A: This property had a real casino orientation and was pretty singularly focused on casino and direct marketing. What we've done is to bring a little more intelligence and balance to that, so we've been really able to grow our leisure segment and cash revenues. We've improved our relationships with our wholesalers, and improved the rate we're getting from them. If you compare our financials today as compared to two years ago, it's a much more balanced picture between casino and retail. Our growth and profitability last year far exceeded our peer group in the market. 

Q: As an older property, there is always the need for, periodically, either refurbishing or renovating. Is there some capital expenditure needed now, or in the near future, to keep the Tropicana competitive? 

A: Here's our approach to the capital side of the equation. We are not going to be making any major capital investments in the property because clearly we still don't know what the long-term solution here is going to be. The executive team at the corporate level is trying to determine what is the best course of action. There's a lot more that needs to be digested as to how well the market is absorbing the new supply of properties that have come here in the past few years. And competitively, what might be the right strategy for us to ensure that our shareholders get the highest possible return. 

Q: Is there any indication as to what may happen? 

A: Right now, there isn't a direction that's been established, whether to redevelop or to continue to operate in our current condition. The likelihood is that we're not going to do anything for at least the next two or three years. So we're not going to be making any major improvements, and by that I mean we're not going to be building a new hotel tower, add new restaurants, build new entertainment venues, that kind of thing. We have started, however, to spend more maintenance capital than we had in the previous two or three years, making sure we have new slot product and refurbishing the rooms throughout the hotel. 

Q: Do you have any concerns about the future for Las Vegas casinos? 

A: I'm very optimistic about our stability here, although we are going to be vulnerable to national economic trends, as well as any competitive threat that comes at us against any one of our significant market segments, i.e. California and Indian gaming. Those are things that could influence the market, but I think what you're talking there is a 2, 3 or 4 percent kinds of influences. What you have underneath that is a generally upward trend for the long run, which is based on the demographics of Las Vegas and the fact that Las Vegas continues to broaden its appeal. 

We're going more international, we're going more into more segments like conventions, high-end leisure travel, high-end restaurants, entertainment seekers, shoppers, so the market is becoming more and more diverse and more appealing to different types in the leisure segment. That's the underlying dynamic here, and that trend will continue. 

Q: Does that mean you expect, and are in favor, of more megaresorts being built in Las Vegas? 

A: I absolutely think it's essential. The development pipeline in Las Vegas is a critical component in our long-term evolution and I think the minute that new development stops, we should start to worry about our future. What happens is that you get into a status quo mode and there's nothing new to create excitement for the city. 

Q: At the same time, won't this development hurt or destroy some properties? 

A: We have some 125,000 hotel rooms, so what if Steve Wynn builds 3,000 more rooms? You're talking a 2 percent increase in supply. Yes, the people that are at the bottom of the food chain may experience some weakened demand because a customer may be migrating to a product that's fresher and more exciting. But in the total sense, I think it's essential for the city to continue to reinvent itself. 

Q: Lots of talk these days about Internet gaming. You're feelings on it and is the Tropicana making plans to enter that arena when and if it's legalized in the United States? 

A: We are not, as a company, involved in any kind of a venture currently, or looking at entering any kind of a venture regarding Internet gaming. Obviously, we're studying the situation and my opinion is that ultimately, the strong brands will have value in the Internet realm. As the future of Internet gaming becomes clearer, both from the standpoint of regulation and how those businesses are going to be structured financially, we'll take a serious look. We own a very valuable brand franchise in the Tropicana and some day that may be an opportunity for us. 

Q: Since most of the properties in Las Vegas are now publicly traded, has the scrutiny by Wall Street affected the way you do business? 

A: It certainly has had a tremendous influence on it. Over the past 20 years, this industry has gone from an entrepreneurial-driven industry managed by people who had worked their way up through the ranks, to a multi-billion dollar industry where there is access to greater capital and management resources. So in the final analysis, it's a bigger, more sophisticated, more complex industry and it's been good for the most part. You do worry that bigger corporations and a Wall Street environment may result in a stifling of some of the creativity and innovation and some of the risk-taking that you have when there are more entrepreneurs involved. I believe, however, that it was a necessary evolution for the industry. 

Q: Do you feel the need to produce a solid quarterly report puts undue pressure on yourself and your staff? 

A: One of the benefits to this is that you have to report your earnings on a quarterly basis and your performance gets scrutinized. I think that's good. I think that forces you to keep your eyes on the road. It forces management to stay awake, be assertive and make sure your performance is as it should be and that you're not falling asleep at the switch. By the same token, I believe every executive has the responsibility to make long-term decisions, even it means doing something that might cause your earnings in the next quarter to not be as good as they might have been if you'd taken a more short-term view. 

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(c) 2001, Las Vegas Review-Journal. Distributed by Knight Ridder/Tribune Business News.