Tammy Farley

Full House: Technology For the New Global Gaming Landscape

The casino model that once revolved around gambling revenue is rapidly changing with multiple factors contributing to this global trend. One of the most significant of these is the growing number of players entering the global casino marketplace.1 Within the U.S., people can now gamble in nearly every state in the country. Canada’s gambling industry is booming.2 And nearly half of all surveyed Brazilian nationals (45.7 percent) say they want casinos.3 In addition, Asian jurisdictions like Taiwan, South Korea and Japan are tracing Macau’s footsteps as they look to legalize casino gaming within integrated resort settings.4

Despite the increasing number of casinos, however, the gambling market itself has not grown at nearly the same pace.1 The Vegas Strip’s 34 percent of revenue from gambling in 2016, is a giant step back from its almost 59 percent rate in 1984. And although Macau is enjoying a rebound,5 the Chinese territory’s nationwide anti-corruption campaign has further slowed the already slowing casino market.6 Compounding the situation is the rise of experience-hungry, social media-driven Millennial travelers who spend less on the casino floor, and more on a casino’s “non-gambling experiences,” such as hotel accommodations, nightclubs, shopping, food and entertainment.

The combination of these trends has led to an increase in the development of integrated casino hotels and resorts, a new model of casino that focuses beyond slot machines and table play. To continue generating revenues and posting profits in today’s global gaming marketplace, casinos must adapt to the changing landscape by embracing new technologies that optimize both gaming and non-gaming revenue streams – transforming them all into revenue-generating profit centers.

Guarantee Wins with Dynamic Revenue Management Software

Understand Total Guest Value

The days of relying on gaming profits to determine a customer’s value and reinvestment percentage are over. The global trend toward integrated casino hotels requires flexible, science-based revenue management (RM) technology to segment guests, determine total guest value and maximize profitability across an entire enterprise. In the past, casinos considered gamblers to be the most profitable guests, no matter how much they spent. This model no longer works. Because integrated casinos include spas, golf courses, high-end restaurants and nightclubs, they attract customers who may spend a lot of money, but never gamble at all. Total guest value is not based merely on theoretical wins, but hotel room revenues, food and beverage, and purchases from other non-gaming sources. A state-of-the-art RM solution creates a data-rich customer profile, analyzing a guest’s spending history to create a complete picture of a person’s projected spend throughout their stay.

Hotel Room Revenue: A Catalyst for Growth

According to Stockton University’s Millennial Entertainment Preferences Study,7 Millennials are more likely to extend their stays at gaming resorts for a week or more – and at much higher rates – than members of other generations. Once considered a benefit given away to almost any gambler who poured money into a machine, hotel rooms are now catalysts for growth, valuable assets for attracting guests. Rather than establishing a blanket comp policy, casinos need RM technology that helps them properly yield room rates.

Optimize Non-Gaming Revenue

Non-gaming amenities and services have risen to a level of vital importance in casinos worldwide, with some properties claiming that non-gaming revenue accounts for 50 percent or more of their total revenue. Good scalable cloud technology will help you tap into these lucrative profit centers, allowing you to track and analyze guests’ non-gaming spending habits, so that you can optimize revenue from every outlet across your property.

Bet on a Sure Thing with Effective Business Intelligence

Marketing Matters

Savvy casino operators around the world are beginning to rely on the benefits of robust business intelligence (BI) solutions for accurate, timely information and data-driven support for business decisions. BI provides you with a thorough understanding of your customer needs, wants, behaviors and expectations, providing key information you can use to secure peak levels of customer acquisition and retention. Through effective use of BI, casinos can develop targeted marketing campaigns that are more likely to convert, and loyalty programs that account for the value of a guest across all revenue streams.

The Personal Touch

To differentiate from the competition, casino marketers understand that personalized experiences are the name of the game when it comes to today’s travelers.8 And smart personalization begins with smart data. BI technology leverages a mix of first-party data from within your own casino hotel, with third-party data from outside sources, to create relevant content and messaging that engages customers on a personal level, maximizing the guest experience and increasing customer loyalty.

Predict a Profitable Future

By inserting the right technology into the equation, casino operators can create forward-looking forecasts that accurately predict customer behaviors. Predictive models are based on customer profiles and historic interactions, including any promotions guests have accepted in the past. BI also factors local influences such as competitive set, holidays and special events into the forecasted demand, so casinos can optimize room rates for maximum profitability. BI allows you to offer guests what they want, before they even know they want it, and present that offer when guests are most willing to pay for it.

Get Real with Real-time Data

In the casino market, last-minute bookings are often the norm, with high rollers waiting to evaluate the best deal from each property before they commit. Some casinos book 50 percent of their business for a particular night on the same day. With a cutting-edge BI solution that offers real-time data acquisition and processing, casino managers know which guests are coming in, which segments are picking up faster, and how many rooms and suites are available at any given moment. They can then improve profitability by increasing or decreasing rates and reinvestment percentages on the fly.

Adapt to a Changing Paradigm

Technavio published a research report on the global casino market, estimating an increase from $228 billion in 2017 to almost $312 billion in 2021. But that growth will be significantly impacted by the shift in consumer gambling habits. While Boomers and Gen-Xers spend 80 percent of their casino money on gaming and 20 percent on food and entertainment,9 those percentages essentially flip when looking at Millennials. They’re more likely to spend 30 percent on gaming and 70 percent on non-gaming services.

Add to this the knowledge that non-gaming amenities now account for between 45 and 75 percent of revenue generated by most resorts within the U.S.,10 and it’s clear that casinos must reevaluate their business processes and technology stacks to adapt to this changing paradigm. Implementing effective RM and BI solutions at your casino can mean all the difference when it comes to achieving real success and profitability. A casino that employs advanced systems and strategies to exploit its own data will gain invaluable insights and be a clear winner in the global marketplace.

Tammy Farley co-founded The Rainmaker Group in 1998 and serves as its president. She spearheads all sales, marketing and customer-related operations for the organization, which is the market leader in profit optimization solutions serving hotel, casino hotel, resort, and multifamily housing operators. Farley graduated from the University of Michigan with a bachelor’s degree in political science. She lives in Atlanta with her husband and, during college breaks, her daughter Grace. She loves to travel, and when visiting Grace in New York City, the two bond over shopping expeditions that allow Farley to explore the world of fashion through her daughter’s eyes. A work-out fiend, she particularly enjoys putting pedal to the metal at Flywheel. Contact Tammy.

SOURCES
1”Casino Hotels – US Market Research Report.” Industry Research Reports | IBISWorld, IBISWorld, Mar. 2018, www.ibisworld.com/industry-trends/market-research-reports/accommodation-food-services/casino-hotels.html.

2”Fantini Gaming Report.” Fantini Research, Fantini Research, 2018, www.fantiniresearch.com/.

3Davis, Terry. “Brazil’s Gambling Legalization Effort Gains More Public and Political Support.” Casino News Daily, 7 Sept. 2017, www.casinonewsdaily.com/2017/09/06/brazils-gambling-legalization-effort-gains-public-political-support/.

4Staff, GGB. “Crystal Ball: Top 10 Trends for 2018.” GGB Magazine, 24 Nov. 2017, ggbmagazine.com/article/crystal-ball-top-10-trends-for-2018/.

5Daniels, Jeff. “Las Vegas Strip Casinos See Gambling Revenues Drop for Three Months Straight.” CNBC, CNBC, 31 Jan. 2018, www.cnbc.com/2018/01/31/vegas-strip-casinos-see-gambling-revenues-dip-for-third-month-straight.html.

6Staff, Reuters. “Macau Tightens Anti-Money Laundering Regulation for Casino Industry.” Reuters, Thomson Reuters, 6 June 2016, www.reuters.com/article/us-macau-gambling-regulation/macau-tightens-anti-money-laundering-regulation-for-casino-industry-idUSKCN0YS0VA.

7Bokunewicz, Jane, and Rummy Pandit. “Millennial Preferences Entertainment Study Final Report – July 2016.” Stockton University, Stockton University, July 2016, intraweb.stockton.edu/eyos/business/content/docs/LIGHT/Millenial%20Entertainment%20Preferences%20-%20FINAL%20REPORT.pdf.

8”Understanding Travel’s Personalization Revolution.” Skift, Skift, 27 Apr. 2018, skift.com/2018/04/27/understanding-travels-personalization-revolution/.

9Machus, Russ. Changing the Game: Evolving Casino Marketing Strategies to Include Millennials. Anderson Marketing Blog, 17 Aug. 2016, marketingblog.andersondd.com/blog/direct-mail-marketing/changing-game-evolving-casino-marketing-strategies-include-millennials.

10Velotta, Richard N. “Las Vegas Resorts Relying More on Non-Gaming Options, Expert Says.” Las Vegas Review-Journal, Las Vegas Review-Journal, 26 Apr. 2018, www.reviewjournal.com/business/tourism/las-vegas-resorts-relying-more-on-non-gaming-options-expert-says/.