by

Casino Revenue Management

Industry Overview

The casino industry is well-known for its use of revenue management techniques.  Because there are a multitude of services offered within a casino, there are many different opportunities for revenue management practices, from the restaurants to the rooms to the spa to the casino floor itself. Additionally, many casinos rely heavily on CRM systems/loyalty programs to create the forecasts upon which their revenue management is based.  This gives casino operators a great deal of non-rooms data to draw upon which assists in their non-traditional revenue management tactics. Overall, I would place casinos in Quadrant 2, with individual components existing in Quadrant 1 (convention space, concert/sports arenas) and Quadrant 3 (restaurants, golf courses, etc.).  This blog post will focus on casinos in the United States.

http://en.wikipedia.org/wiki/Casino

Space

In most cases and for most services, casinos define their space implicitly.  In the hotel, space is divided into rooms and suites, in the restaurants, space is divided into tables, in the spas, space is divided into treatment rooms, in the event areas space is divided into seats or conference rooms, banquet halls, etc.  There are some services associated with the casino that define their space in what could be viewed as a combination of implicit and explicit.  For example, the casino floor is divided into different areas where different types of games are available, but games can be moved, and games are not sold by the space to the consumer; any guest has access to all games on the floor at any given time.  Additionally, spaces like nightclubs and pools have both explicit and implicit space (the main dance floor or pool is available to everyone, but tables or cabanas are defined and sold on an individual basis).

Casino Floor at New York, New York in Las Vegas, NV

Suite at The Bellagio in Las Vegas, NV

Tryst Night Club at Wynn Las Vegas

Tryst Nightclub Las Vegas

Of course, because casino properties are expansive, even after accounting for the gaming floor, the restaurants, the nightclubs, the event spaces and the hotel rooms, there is a large amount of additional space that can be used to generate more revenue.  One of the primary sources of revenue is alcohol sales.  There are bars located throughout the casino, independent of the clubs and restaurants, that provide a space that is separate from the main gaming floor for guests to relax and have a drink (or many drinks).  Many of these bars have additional table games or slot machines, so there is always the opportunity to get more money out of guests, even when away from the bulk of the tables/slots.  Furthermore, drinks are offered on the casino floor, most of the time at no cost to those guests who are gambling, but many casinos charge for drinks at lower-limit tables or at the slot machines.  Encouraging guests to drink, especially when drinks are available at a low price compared to the bars and restaurants nearby, not only brings in a consistent supply of revenue, but also lowers guests’ inhibitions and can lead to riskier behavior on the part of the gamblers.

Another source of revenue is the rent collected on retail space that exists in the casino.  Often, to fill the empty space between the parking structure and the main lobby, or the elevators to the guest rooms and the casino floor, or the walking distance between various restaurants and night clubs, casinos will create retail space for various vendors.  Guests don’t even have to leave the casino to find high-end products to further fill their suitcases.  Because the casino can guarantee a constant flow of potential customers, these retail spaces are highly valuable, so the property owner can charge a premium for leasing agreements.

Casino Bar, above the gaming floor, MGM Grand in Las Vegas, NV

The Forum Shops at Caesar’s, Caesar’s Palace in Las Vegas, NV

Suggestions for Space Division

Though many casinos have expertly divided their space, and have done so in a way that makes it somewhat difficult for guests to easily navigate, there are some opportunities to creatively split up the existing space within the property.  First, the casino floor itself provides a unique opportunity to capitalize on additional revenue through space utilization.  From the massive amount of data that is available, casino reservation and loyalty systems can predict which loyalty guests will be on property on any given day, and can track which games these guests play most frequently.  In order to have the appropriate table mix on the floor, to ensure that guests will have the chance to play what they want when they want, instead of waiting to get a seat at a table, casinos can use the data to determine what percentage of the total floor space should be dedicated to each specific game.

There may also be the potential for multi-use space, that can be adjusted as trends change.  For example, there is currently a huge food trend of trucks and carts that serve gourmet food on the street, quickly and easily, to passing customers.  There is so much space in a casino, along hallways or outside nightclubs, that could potentially house a “food truck”-esque space to capitalize on the demand for quick and relatively inexpensive meals.  Not only does this utilize empty space, but it may also keep guests on the gaming floor longer, if they are not taking an extended break to go eat at one of the higher-end dining establishments.  As trends change, these spaces can be altered to meet different demands, at minimal cost to the company.

Time

The casino industry sells time both implicitly and explicitly, depending on the service.  Rooms, of course, are sold explicitly, based on length of stay, and spas sell by treatment period.  However, there are many other services sold implicitly, like meals in the restaurants, admission to a night club or entertainment event, and the time spent on the casino floor.  The casino floor is in a unique position, as there is no real cost for admission (at least in US casinos), but guests are constantly “paying” for their experience through the bets placed at the tables or at the slot machines.  Though the casino is not getting a rate or fare from the guest, it is clearly making a great deal more in revenue because of the rates/amounts at which people gamble.

Reservation Page, Cosmopolitan Las Vegas

https://www.cosmopolitanlasvegas.com/book-a-room.aspx

Massage Services Menu, Red Door Spa, Harrah’s in Atlantic City, NJ

http://www.reddoorspas.com/spaservices/servicelisting.aspx?catid=25

Invite to Hyde NYE Party, The Bellagio in Las Vegas, NV

Suggestions for Time Division

Due to the high volume of demand for both rooms and club entrances, there are a couple of ways in which casinos could more creatively split up their time.  However, the practicality of these suggestions is debatable. First, because there are many guests who come to cities with a large number of casinos, like Las Vegas or Atlantic City, and perhaps only come for a brief trip (in Atlantic City especially, guests may only be on property for a few hours before returning home), there is potential to further split up the time spent in the hotel rooms.  Currently, most casinos rent rooms by the night.  However, in properties with several thousand rooms, there is certainly a possibility that, during the day, many of these rooms will be unoccupied.  The rooms division could potentially rent these rooms in short blocks, by the hour, so that guests will have a place to leave their things, take a break from the activities on the floor, etc.  If this practice does not throw too much of a wrench into housekeeping and reservations, it could be a way to generate additional revenue (especially because so many rooms are comped and earn the hotel no money whatsoever).  Second, there is also great demand for the night clubs and pools that are housed in these casinos.  Often, people wait on line for hours just to get inside for a chance to party.  On top of charging high admission prices, these clubs rake in money on alcohol sales.  One potential way to better split up the time is to have multiple “seatings”, to use a restaurant term, so as to maximize the amount of people that can potentially come in and out of the club in a given night.  I would think that one early “seating” and one late “seating”, with the exact same performance or entertainers, could be made available.  In that way people can choose which time period they would like to attend, and can attend multiple parties in the same night, instead of being miserable on a line for hours on end.

Price

Most of the rate fences currently utilized in a casino are similar to those utitlized in a hotel.  For physical rate fences, we have premium pricing for nicer rooms, rooms with better views, rooms with access to specific lounges, etc.  There are also packages, that come with discounts or freebies, like spa or restaurant gift certificates, but these are essentially built into the price of the room.  In terms of nonphysical rate fences, many casinos will charge a cancellation fee for less than 24 hours notice, will reduce rates during the week or during slow periods to drive demand, or will set rates based on reservation forecasts.  The major difference between a typical hotel’s rate fences and a casino’s rate fences is the loyalty program, which is based on how much a person gambles.  Loyalty tiers create an entirely different set of rate fences, based on revenue generated for the casino outside of the rooms division (as would be the case for loyalty guests in a typical hotel).  The more a person spends gambling, the more perks they are entitled to from the casino, like comped rooms and meals, free tickets for shows, transportation to and from the casino, etc.  One company that runs their loyalty program particularly well across their portfolio of casinos is Caesar’s Entertainment.

https://www.totalrewards.com/e-totalrewards/content/pages/overview.html

Suggestions for Rate Fences

One suggestion for an additional type of rate fence would be to change the way drinks are sold on the casino floor. In many cases, drinks are free, which loses money for the casino.  I would suggest creating physical regions on the floor, based on the limit-level of the tables or the slots, and charge for drinks based on those limit-levels.  Drinks should still remain cheaper (by quite a bit) than at the bars, in order to keep patrons on the casino floor, but drinks at the penny slots should be the most expensive, followed by the nickel slots, and up the chain until you arrive at the high limit tables where drinks remain complementary.  Depending on how this rate fence psychologically affects an individual person, it may keep them at the lower-limit games, paying more for drinks, or push them to the higher limit tables, where they eventually end up spending much more money (but less on drinks!).

13,624 thoughts on “Casino Revenue Management”

  1. Hey, Such an informatic article you have shared. I appreciate your effort in providing such detailed information. If you’re looking for assistance with udyam registration, we are here to help.

  7. I am heartily thankful to you for sharing this best knowledge. custom award This information is helpful for everyone. So please always share this kind of knowledge. Thanks once again for sharing it.

  26. Now Time To Get Safe, Proven and Powerful SEO Backlinks.

    Tested with latest Google updates,

    We provide High authority MANUAL High TF CF DA PA PBN BackIinks on aged web 2.0s blogs ensuring high-quality standards. Simply buying bulk low-quality Links are no more part of SEO. Google keeps changing itself and so do you. Align your own SEO strategy with Google Updates and think out of the box.
    Get 10 MANUAL High TF CF DA PA PBN BackIinks for best SEO results

  28. Salerno Service Station: Your Trusted Geico Auto Repair Xpress Shop

    Introduction:
    Finding a reliable and trustworthy provider for your vehicle repairs and services is crucial. Salerno Service Station, a family-owned business spanning three generations, has been serving the Williamsburg community for years. They have established themselves as the go-to Geico auto body destination for all your Geico auto repair needs, specializing in Geico Auto Repair Xpress. In this article, we will delve into why Salerno Service Station is your best choice for Geico auto repairs, highlighting their exceptional services and what sets them apart from the competition.

    A Legacy of Quality Service:
    Salerno Service Station has built a long-standing reputation for providing exceptional customer service and delivering top-quality repairs. As a family-owned business, they take great pride in their work and treat every customer like family. With three generations of experience, their knowledge and expertise in Geico Auto Repair Xpress are unparalleled.

    Geico Auto Repair Xpress Experts:
    If you’re insured with Geico and require auto repairs, Salerno Service Station is the ideal destination. They specialize in Geico Auto Repair Xpress, ensuring a seamless repair process for Geico policyholders. Their skilled technicians are trained to handle all types of auto body repairs covered by Geico, from minor scratches to major collision repairs.

    State-of-the-Art Facilities and Equipment:
    Salerno Service Station boasts state-of-the-art facilities and cutting-edge equipment, enabling them to provide top-notch repair and maintenance services. Their advanced tools and technology allow for accurate diagnostics, precise repairs, and efficient turnaround times. Rest assured that your vehicle is in capable hands when you choose Salerno Service Station.

    Comprehensive Range of Services:
    In addition to being a Geico Auto Repair Xpress shop, Salerno Service Station offers a comprehensive range of services to meet all your automotive needs. Their skilled technicians can handle everything from routine maintenance to major repairs. Whether you need an oil change, brake repair, engine diagnostics, or electrical work, Salerno Service Station has got you covered.

    Competitive Pricing and Transparent Estimates:
    Salerno Service Station understands the importance of fair pricing and transparency. They provide competitive pricing for all their services, ensuring that you receive the best value for your money. When it comes to Geico Auto Repair Xpress, they offer free collision estimates, allowing you to make informed decisions about your repairs.

    Conclusion:
    For all your Geico auto repairs, Salerno Service Station is the ultimate destination. With their legacy of quality service, expertise in Geico Auto Repair Xpress, state-of-the-art facilities, comprehensive range of services, and competitive pricing, they stand out as the top choice in Williamsburg. Trust Salerno Service Station to handle all your Geico auto repair needs and experience the difference that their exceptional service can make. Contact them today to schedule an appointment or request a collision estimate.

  32. Modelpaper is an initiative of professional writers who have banded together to provide focused news coverage of current events in India. Our team is made up of professional writers and citizen journalists with a wide range of journalism interests who are passionate about reporting Education Updates modelpapers2021.in with transparency in the general public interest.

  36. *** According to Latest Google Update 2022***

    If you have not experienced higher Google Ranking for your money site, then it’s time to boost your website visibility on search engines through our Powerful Contextual 3 Tier Backlinks. It is 100% manual, result oriented and unique strategy and guarantees to add power to your money site.

    What Do We Offer?

    Tier 1:

    5 Contextual Links on DA – 100 to 50+ Sites

    Including:

    WordPress

    TumblrGet Tier3 Contextual Backlinks, Safest Seo Links Manual Submission

  37. *** According to Latest Google Update 2022***

    If you have not experienced higher Google Ranking for your money site, then it’s time to boost your website visibility on search engines through our Powerful Contextual 3 Tier Backlinks. It is 100% manual, result oriented and unique strategy and guarantees to add power to your money site.

    What Do We Offer?

    Tier 1:

    5 Contextual Links on DA – 100 to 50+ Sites

    Including:

    WordPress

    Tumblr

    Livejournal
    Get Tier3 Contextual Backlinks, Safest Seo Links Manual Submission

  38. *** According to Latest Google Update 2022***

    If you have not experienced higher Google Ranking for your money site, then it’s time to boost your website visibility on search engines through our Powerful Contextual 3 Tier Backlinks. It is 100% manual, result oriented and unique strategy and guarantees to add power to your money site.

    What Do We Offer?

    Tier 1:

    5 Contextual Links on DA – 100 to 50+ Sites

    Including:

    WordPress

    Tumblr

    Livejournal

    Weebly

    Squidoo

    Bloggers

    and many more

    Tier 2:

    10 High DA Social Bookmark and Profile Links,

    Tier 3:

    30 Blog Comment From DA 90 to DA 30+

    This Powerful Strategy will add immense power to your money site. We use the safest method for building this 3 Tier Package. The powerful net of Backlinks is Linked to each other and money site too backed with High PR Blog Comment Backlinks.

    Our Package Specialty:Get Tier3 Contextual Backlinks, Safest Seo Links Manual Submission

  40. Social Bookmarking become very precious term in Search Engine optimization.

    mix.com and pearltrees and diigo those sites are top sites in social book marking area.

    So book mark your link to the sites at just 499/-.

    All submissions will be done manually as well as from different IPs.

    More chances are there to strengthen you keyword by using this service.

    Save your site to this high page rank sites right now.
    I Will Save Your URL 10 Times To mix, diigo and pearltrees

  41. Wanna Win ANY Type Of Online Contest ??

    Get 30 face book votes for 499/-.

    Have you participated in any contest and need more votes/likes for your entry?

    If so then you have come to right place At the Right Time …Just Continue Reading And By The Time You End Up Reading This article , I’m Sure You’ll Have A Sure Shot Method To Online Riches .

    We Can Handle Any Numbers (Large Or Small ) .

    We have large community of facebook members to like your contest.

    Can Spread And Distribute The Votes As per Your Requirements .( As Slowly As 1 Vote Per Hour ,Very Helpful For Some Contests )

    Can Monitor The Contests For You .

    Its Easy To Reach Out To us And get Instant Replies For All Queries .
    Buy 30 Facebook votes for any type of online contests or sign in programms

  44. I will post your message or video or url in 50 international business groups.

    Publicizing on facebook give more strength to your keywords also.

    There is average 35000 members in one group so, overall the link reach will be 2 million people.

    Now a days facebook blocking the accounts to stop the publicity. But We have 300 active groups to promote any link and business.

    Please feel free to contact us if you need service in particular category.
    I Will Post You Message Or Website Url In 50 Facebook Groups

  47. Facebook become big market for any business.

    We will provide 200 facebook likes for 499/-

    All likes are real and permanent.

    100% satisfaction guaranteed.

    We can provide likes to any page.

    Specialists in getting Indian facebook likes.

    We can handle the orders up to 100000 likes.

    Feel free to contact for more information.

    This offer is exclusively on arunnn.com
    I will provide 200 permanent facebook likes

  48. I make WordPress (Dynamic) and HTML (static) Responsive Website.

    I’m Professional Web Designers In Hyderabad – and I make personal, business, organization, non-profit, or any-type of website that you may need. All I need is your content and I will handle everything else. I’m able to make own custom designs and templates so you end up with a pixel-perfect website.

    What I need to make a site:
    Content for each page
    Any images you want to use
    What You Get :
    Complete designed website
    1 page
    DNS configuration to your domain
    Website migration to your desired hosting
    Add on page support
    Get a fully functional Website design One page

  49. ****** MONTHLY MAINTANANCE CHARGES ₹ 499 ONLY ******

    GEt ready made ecommerce website in 3 days.

    You can upload products and start selling instantly.

    Responsive Design

    Admin panel

    Payment gateway and cash on delivery.

    We upload up to 50 products in the beginning.

    Install SEO plugins and social media links.

    The site completely Onsite optimized to crawl search engines.

    1 Year Domain Registraion

    1 Year Webhosting

    Feel free to contact for more details.
    Get fully functional ecommerce website @ ₹ 9999

Leave a Reply

Your email address will not be published. Required fields are marked *