Analyst Aromatherapy: Why Covering Casino Stocks Smells So Exotic

I spent about twenty years working as an equity research analyst. For much of that time, I covered the stocks of casino operators, including major gaming resort companies. The due diligence associated with that role involved frequent trips to Las Vegas, where many gaming companies are headquartered. I've lost count, but I suspect that I visited Sin City about fifty times as part of my professional duties. 

When I first began following the leisure industry in the early 1990s, my colleagues and friends would snicker when I told them I was off to Las Vegas or Miami to meet with the management teams of casinos or cruise line companies. While I spent a lot of my time grinding through spreadsheets and writing up meeting summaries, I felt lucky to be covering such dynamic and exciting companies.

I got a kick out visiting Las Vegas for meetings and conferences. The city crams a lot of kitschiness into the confines of huge themed hotels. The Strip is home to elaborate replicas of medieval castles, pirate villages, Manhattan skylines, Venetian canals, and ancient Egyptian pyramids. As a rookie stock analyst, strolling through these resorts was an exciting way to put my MBA to work.

Although I still follow casino stocks, I no longer visit Las Vegas as frequently. While I don't miss the hassle of cross-continental flights, I sometimes get nostalgic about visiting the city. The developers of these casinos did an excellent job creating amusing indoor entertainment environments that are not easily forgotten.

I wouldn't call the experience a "suspension of disbelief." One is no more likely to confuse the Venetian hotel with the real St. Mark’s Square than mistake the inside of an Outback Steakhouse for an outpost in the Australian bush. Still, Las Vegas offers visitors an evocative sensory experience. When I think about walking around the Wynn or Bellagio, I recall being impressed by how they look, sound ... and smell.

It turns out that the vaguely exotic aroma of Las Vegas casinos is a carefully crafted design feature. Forgot all the nonsense about Las Vegas casinos being pumped with oxygen to make gamblers want to wager more aggressively. That's an urban myth. Something else is going on in the air circulating around casinos that makes visitors "feel" like they're vacationing on a Polynesian island.

A 2010 story in the Las Vegas Sun explains that "there are metal devices the size of breadboxes attached to the ventilation systems of nearly every Strip resort. The boxes vaporize highly aromatic and shockingly expensive oils into the ducts, where the airflow dilutes and distributes them." The device that creates these exotic scents, manufactured by a company called Aromasys, looks like this:

According to the Aromasys website, these devices can be integrated with a hotel's HVAC system. They "convert fragrance oil into a microscopic ... vapor that mixes with air flowing through [the] HVAC system and fills [a] chosen space with an expertly developed fragrance."

The Las Vegas Sun article explains that different scents evoke different responses. "Citrus smells are refreshing. Floral smells are relaxing. Herbaceous smells are usually relaxing but can also be invigorating, especially peppermint. Cedar and other wood smells relax and soothe." Apparently, this is why "the Mirage smells Polynesian, Mandalay Bay smells Southeast Asian and the Bellagio has the scent of Northern Italy.”

It would go too far to say that visiting these hotels is a "transporting" experience. Casino floors can be smoky, crowded, and noisy, and not the least bit "exotic.“ Looking beyond the paper-thin veil of themed imagery, one is quickly reminded that these are mammoth-sized slot parlors. Still, touring a casino floor with a notepad in hand is a lot more fun than visiting a factory floor.