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!).

13,256 thoughts on “Casino Revenue Management”

  1. XM.com – Redefining Trading Excellence: A Comprehensive Review of Unmatched Pros and Features!
    Looking for a trading platform that goes above and beyond expectations? Your search ends with XM.com, the epitome of trading excellence. Having extensively explored XM’s offerings, I am delighted to highlight the top 20 features that set it apart as the best in the business.

    Unleash your trading potential with XM’s vast array of assets, advanced trading tools, and seamless execution. With competitive spreads and fast order processing, you can capitalize on every market movement with confidence.

    XM.com’s commitment to customer satisfaction shines through its round-the-clock professional support and hassle-free deposit and withdrawal options. Your funds are protected in segregated accounts, ensuring the utmost security.

    Moreover, as a regulated broker, XM.com adheres to the highest industry standards, providing you with peace of mind while navigating the markets.

    Join the legion of traders who have experienced unprecedented success with XM.com. Whether you are a seasoned trader seeking innovation or a novice looking for a reliable platform to kickstart your journey, XM.com is the ultimate destination for traders of all levels. Empower yourself with XM.com and redefine your trading journey today!

    XM pros

  2. Apakah Anda menganggap diri Anda seorang penjudi berpengalaman atau hanya mencari sedikit kesenangan, Game Spaceman Slot pasti akan membuat Anda terhibur selama berjam-jam. Game online yang mendebarkan ini menawarkan grafik yang memukau dan soundtrack dan juga kesempatan untuk menang besar di mesin slot bertema luar angkasa ini.

  3. Tokyo77 Situs Judi Online Slot Gacor Gampang Menang Hari ini Maxwin dengan permainan slot online terlengkap partner slot88 terbaru dan terpercaya.

    slot gacor

  16. Traveling to Turkey was never THIS simple. Find the best tour locations, restaurants, attractions, culture, and everything else with a Turkey Local Expert. Visit here Turkey Travel Planner

  18. Embark on a tga168.net virtual journey of online slots and football, where the excitement never ends and friends become teammates in the game of fun.

  20. Discover the TGA-BET.COM allure of online slots and football, enticing friends and siblings to join in the excitement and revel in the joy of gaming together.

  22. เกมสล็อตเป็นหนึ่งในเกมคาสิโนที่ได้รับความนิยมอย่างกว้างขวางทั่วโลก มันเป็นเกมที่มีความง่ายในการเล่น และเสี่ยงที่น้อย นักพนันทั่วไปและนักเสี่ยงโชคชอบเล่นเกมสล็อตเพราะสามารถแทงเงินลงไปเพียงไม่กี่บาท แต่มีโอกาสชนะเงินรางวัลได้เป็นอย่างดี

  24. สล็อตออนไลน์ เป็นเกมคาสิโนที่ควรลองเล่น ไม่ว่าจะเป็นการผ่อนคลายเวลาว่างหรือแห่งความสนุกสนาน นอกจากนี้ยังมีโอกาสในการชนะรางวัลใหญ่ที่น่าตื่นเต้น หากคุณสนใจในการเสี่ยงโชคและต้องการความสนุกที่ไม่มีที่สิ้นสุด อย่าพลาดที่จะลองเล่นสล็อตออนไลน์อย่างแน่นอน!

  27. Dengan grafik yang jelas dan soundtrack yang imersif Game Spaceman Slot ini pasti akan membuat Anda tetap tenang.Dan siapa yang tahu apa yang akan Anda temukan di ruang angkasa yang luas?Cobalah Slot Spaceman dan lihat apa yang disediakan alam semesta untuk Anda!

  29. Getting the best-grade Human Growth Hormone is much easier and affordable online. Although you can buy hgh from local drug stores or online sellers, a grasp on its characteristics will save you from a lot of issues.

  31. Implemented user interface improvements and responsive design for better accessibility on the Casino Revenue Management blog. Updated content layout and optimized page loading speed to enhance user experience. Fixed minor bugs and errors for a smoother browsing experience. missrosepk

  33. Memiliki agen penyedia slot online dapat membantu Anda mendapatkan hasil maksimal dari slot online Anda. Agen ceria138 memberi Anda pilihan permainan yang luas dan berbagai fasilitas bermain yang meningkatkan kualitas permainan Anda dan menghindari kesulitan.

  34. Di mana permainan situs slot gacor bukanlah permainan yang asing bagi orang Indonesia sebab ada sejumlah situs judi online yang beroperasi di Indonesia di mana mereka menyediakan slot online, kasino, poker, dan permainan judi lainnya terhadap orang-orang.

  35. Saat ini Daftar link situs slot online sudah diakui sebagai slot kelas atas yang paling banyak dimainkan oleh semua penjudi dunia. Provider ternama ini menyediakan ratusan permainan didalamnya dengan tingkat kemenangan tinggi.

  38. Pilihlah Slot Online Terbaik yang menawarkan pilihan permainan yang beragam, bonus menarik, dan dukungan pelanggan yang responsif. Dengan demikian, Anda akan dapat menikmati permainan dengan lebih lancar dan meraih kemenangan besar.

  39. Dalam Permainan Judi Slot merupakan salah satu permainan yang cukup populer di kalangan penjudi. Namun, untuk memaksimalkan kemenangan Anda, dibutuhkan strategi yang tepat. Pertama-tama, pilihlah mesin slot yang memiliki persentase pembayaran yang tinggi. 

  40. Tatkal Travels is your premier Best Taxi Service in Jammu, where scenic beauty and cultural heritage come together in harmony. Our fleet of comfortable and well-maintained cabs is at your service, ensuring you experience the splendor of Jammu with utmost ease and convenience.

  42. SMM Panel One is your one-stop solution for skyrocketing your social media presence and success. With our cutting-edge Social Media Marketing (SMM) panel, you can harness the power of various platforms to elevate your brand, engage your audience, and drive unprecedented growth. From increasing followers, likes, and comments to generating buzz around your content, our platform offers a seamless and efficient way to conquer the digital landscape. Boost your social media game with SMM Panel One and witness the magic of organic reach and genuine interactions like never before!

  43. สล็อตแตกง่าย 2023 ไม่ผ่านเอเย่นต์ เปิดให้บริการ สล็อตแตกง่าย แตกจริง พร้อมให้นักเสี่ยงดวงทั่วทั้งโลก ได้เข้ามาสัมผัสกับการเล่น สล็อตแตกง่าย ได้เงินจริง ในโลกของการพนันออนไลน์ในปี 2023 มีให้เลือกเล่นออกมาใหม่เป็นพัน ๆ เข้าไปเล่นอย่างสุขสบาย กับ เกม สล็อตแตกง่าย ใหม่ ๆ อัปเดตให้เล่นทุกวัน ทำให้ เว็บสล็อตออนไลน์ อันดับ 1 ใหม่มาแรก ของเรา มีการนำเกมล็อตแตกหนักมากมายมาให้นักเสี่ยงโชคสามารถเลือกเล่น ลุ้นรับรางวัลแบบเยอะที่สุดแน่นอน

  45. Enhance your cryptocurrency mining efficiency with top-notch ASIC miners!
    As a leading manufacturer and seller of cutting-edge ASIC miners, we offer high-performance solutions for crypto enthusiasts and mining professionals.
    Explore our diverse range of premium miners on https://iceriver.cn.com.
    Maximize profitability and stay ahead in the mining game with our reliable IceRiver KAS series ASIC miners.

  46. Jika kamu mencari beberapa hiburan yang menarik saat ini, kamu mungkin pernah mendengar tentang Judi Slot Online. Seiring dengan kemajuan teknologi, slot online atau biasa disebut juga dengan mesin slot virtual, semakin populer di kalangan penggemar judi online di Indonesia.

  47. Discover the power of SMM Panel One, the all-in-one SMM Panel that takes your social media presence to new heights! Whether you’re a business owner, influencer, or content creator, our platform offers a seamless and efficient way to boost your reach, engagement, and visibility across popular social networks. From instant likes, shares, and comments to targeted audience growth and analytics, SMM Panel One empowers you with the tools you need to stand out in the digital landscape. Join us today and unlock the potential of social media success!

Leave a Reply

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