Gone are the days when a casino is just a casino. Competition has increased as new markets and “new players” enter the gaming sector, all competing for a larger share of wallet from customers. And those customers themselves are changing the game. Millennials are making up an increasing proportion of gaming customers. And Millennials simply don’t gamble as much or in the same way as other generations do – with only 8.5 percent of a Millennial’s budget going toward gambling versus 23.5 percent spent by non-Millennials. This has led to the steady growth of expansive integrated resort complexes that incorporate a multitude of revenue-generating outlets.
A Multitude of Revenue Streams
In addition to offering endless fun on the casino floor, these resorts strive to encourage gaming and non-gaming guests to stick around and spend more of their discretionary income on property by offering a variety of options that include:
- Lounges and Nightclubs
- Golf Courses
- Live Entertainment
- Meetings & Conventions
- Upgraded rooms & services
In the same way that you can use big data and analytics to maximize revenues on your casino floor, you can maximize revenues across all your available revenue streams, fueling increased profits.
Total Revenue Management
The majority of casino hotel operators already understand the need to move beyond traditional revenue management to employ a more sophisticated “total revenue management” (TRM) approach – one that incorporates total guest value (TGV). To optimize this approach and accurately assess TGV, you must capture the right data on guest behavior, including on-property spend across all revenue-generating outlets and the impact of intangibles such as social media influence and reviews.
With the right tools, science-based algorithms allow you to mine your data at a granular level, segmenting your guests based on preferences, demographics, and spend history. Hotel operators gain the ability to move beyond basic “comp versus no comp” decisions to make informed rate decisions and calculate optimal reinvestment strategies. Furthermore, promotional offerings become highly targeted and personalized, generating higher conversion rates, greater customer loyalty, and a positive impact on the bottom line through more strategic profit management.
Galvanizing Your Group Revenues
One way casino hotels are keeping gaming and non-gaming guests (and their wallets!) on property is by offering on-site meeting and convention space. Group sales help casino resorts exponentially increase their profitability. But evaluating the precise degree of that profitability is complex because it requires a more advanced level of revenue management – one that compares a group’s overall value with competing non-group demand. And one that accounts for ancillaries such as catering packages, meeting room, and audiovisual equipment rentals.
By implementing technology to optimally price group business, you can quickly extract and analyze a group’s revenue and factor it into the overall profitability of your hotel. The right software uses lead scoring to speed up decision making. It can also guide you in determining the appropriate number of rooms to set aside for transient guests versus groups versus comps for those high-value players who are notorious for last-minute bookings.
Casino hotel operators have realized that if they focus solely on gaming revenue performance, they’re leaving money on the table in the form of untapped potential available from other revenue streams. Technology that leverages total customer value provides casino hotels significant leverage and allows them to put the right guests in the right rooms to maximize profit.
Learn more about our take on where the hospitality industry is with total revenue management in our recent blog - The Path to Total Revenue Management.