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!).

18,919 thoughts on “Casino Revenue Management”

  2. diplomacy

    Explains how Influence, Government Relations, Lobbying, and Public Affairs interact together to better navigate and influence the complex world of interactional business diplomacy, guaranteeing organizations’ growth and success globally. In this website, we explore the importance of market-shaping, thought leadership, and research in the realm of government relations, influence, and public affairs. We also examine how businesses and advocacy groups can use these tools to drive growth and achieve their goals.

  5. With 50LANGUAGES.com you can learn over 50 languages including Afrikaans, Arabic, Chinese, Dutch, Belarusian, Japanese, Persian, Portuguese, Russian, Spanish or Turkish using your native language!

  6. With 50LANGUAGES.com you can learn over 50 languages including Afrikaans, Arabic, Chinese, Dutch, Bosnian Japanese, Persian, Portuguese, Russian, Spanish or Turkish using your native language!

  7. Your writing touched me so much that I saw it without thinking. Thank you so much. I think I will continue to see your writing. I ask you to continue to write good things. I hope you have a good day as I see your writing
    먹튀검증

  17. I’m really glad I have found this information. Today bloggers publish only about gossips and internet and this is actually frustrating. A good web site with exciting content, this is what I need. Thanks for keeping this web site, I’ll be visiting it.
    비아그라파는곳

  19. Discover the ultimate destination for online security and reliability at mt-spot.com. We specialize in meticulous 먹튀검증, ensuring a seamless and safe experience for users. Our dedicated team verifies 먹튀사이트조회 and 토토사이트, making us the go-to 먹튀검증업체. Trust us to be your top choice for authenticating online platforms.

    Embrace worry-free online entertainment with mt-spot.com! Our expert 먹튀검증 guarantees a trustworthy environment, ensuring you enjoy 먹튀-free browsing. As a leading 먹튀검증업체, we verify 먹튀사이트조회 and top-notch 토토사이트, solidifying our reputation as the ultimate destination for secure online fun.

    Elevate your online adventures with mt-spot.com, your premier source for 먹튀검증 excellence. We diligently validate 토토사이트 and conduct thorough 먹튀검증업체 services to ensure your safety. Explore 먹튀사이트조회 options with confidence, knowing that we stand as your steadfast guardian against 먹튀 risks.

    Unveil a new era of online confidence through mt-spot.com! Our commitment to 먹튀검증 is unmatched, making us the preferred 먹튀검증업체 in the industry. Safeguarding your interests, we meticulously verify 먹튀사이트조회 and present exceptional 토토사이트, redefining your online experience with unmatched security.

    Dive into a realm of secure online exploration at mt-spot.com. Our dedicated team leads the 먹튀검증업체 realm, ensuring your encounter with 먹튀-free 먹튀사이트조회 and premium 토토사이트. Experience online leisure like never before, as we redefine your understanding of trust and reliability.

    먹튀검증업체

  20. Assam has Released the Assam 9th Model Paper 2024 in PdF Format for All Hindi, English, Sanskrit, Science, Mathematics Subjects this web page Available here for Download, Assam Students Studying in Class have to Participate in Examination for Better Preparation.SEBA Board Students can Download Their Subject wise PDF Files it will be Beneficial for Study Material Practice and Regular Check Bit Bank and Assam 9th Question Paper 2024 Question Bank, Important Questions, Students who are Attending Assam Class Annual Exam can make use of this Information which we have Provided here. This Website Available Assam 8th Class Last year Exam Question Paper for Students can make a better Performance in Exam 2024

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

  23. Dalam permainan Slot Online Gacor ini memiliki semua yang Anda butuhkan untuk pengalaman yang menyenangkan dan bermanfaat. Jadi tunggu apa lagi? Cobalah dan lihat keberuntungan seperti apa yang Anda miliki!

  25.  tingkat pembayaran game yang mengesankan berarti ada peluang bagus Anda akan mendapatkan pemenang. Jadi anda harus mecoba permainan Slot Gacor Gampang Maxwin terpercaya ini. dan lihat apakah Anda bisa mendapatkan jackpot itu? Siapa tahu, Anda mungkin saja beruntung!

  27. Great goods from you, man. I have understand your stuff previous to and you are just too great. I really like what you have acquired here, certainly like what you’re saying and the way in which you say it. You make it enjoyable and you still take care of to keep it sensible. I can’t wait to read far more from you. This is actually a terrific website.i would love to sip a cup of green tea each morning because it contains L-theanine which calms the mind . I surely did not understand that. Learnt a thing new nowadays! Thanks for that. thank u for sharing, i love it안전놀이터

  30. Ks Officialthailand จำหน่ายพอตรุ่นฮิตอย่าง KS Quik 5000 Puff ราคาส่ง ของแบรนด์ Kardinal stick และ , KS ราคาส่ง และ KS Quik ราคาส่ง , Ks Kurve 2 , KS Lumina.

    quik 5000

  39. Beberapa keuntungan dari bermain game Judi Slot adalah mudah dimainkan, menghasilkan uang secara instan, dan menawarkan bonus besar bagi pemain yang beruntung.

  40. Perangkat lunak yang handal akan memungkinkan pemain untuk menikmati efek visual dan suara yang menarik serta kesempatan untuk memenangkan hadiah besar. Ada banyak perangkat lunak game yang dapat digunakan untuk bermain Judi Slot Online, namun pastikan anda memilih yang dirancang dengan profesional dan aman untuk digunakan.

  41. Ketika sedang bermain game judi online, Anda pasti ingin memastikan bahwa perangkat lunak yang digunakan bisa diandalkan dan memiliki reputasi yang baik. Tidak hanya memungkinkan Anda untuk bermain Judi Online Terpercaya dengan aman dan nyaman.

  42. Dengan teknologi yang semakin canggih, game slot online bisa dimainkan dengan mudah melalui smartphone atau komputer. Dengan demikian, para pemain juga dapat menghemat waktu dan biaya serta meraih kemenangan dengan lebih efisien. Oleh karena itu, tak heran jika game Slot Gacor Online semakin diminati dan menjadi pilihan yang menarik bagi para pecinta perjudian di seluruh dunia.

  43. Agen 18 telah menjadi salah satu topik yang paling populer belakangan ini. Dengan semakin ramainya pengguna internet dan media sosial, penasaran dengan identitas dan kehidupan slot semakin meningkat.

  46. Now i am attracted to people write-up. It can be best to locate persons verbalize within the cardiovascular system together with realizing in such a major topic is frequently purely observed. customzied curtains

  48. Elevate your career in insurance adjusting with ReadyAdjuster.com. Unveil a range of opportunities through our Xactimate Training, where precision in estimating is cultivated. Become a certified adjuster with our comprehensive Adjuster Licensing program, opening doors to prosperous ventures. Master the art of claim handling with our meticulous Adjuster Training, designed to refine your skills. Plus, access the knowledge of Xactimate Training Online for free, giving you a competitive edge. Your journey to becoming an accomplished adjuster starts here, at ReadyAdjuster.com.

    Adjuster Training

  49. Daniel H. Cole is a senior portfolio manager and lead portfolio manager for the Columbia Small Cap Growth team.Daniel H. Cole. Prior to his current role, Daniel was a senior portfolio manager and senior managing director at Manulife Asset Management, where he was team lead for the small, small-mid and mid-growth strategies. He also gained experience as a portfolio manager at Neuberger Berman earlier in his career. He’s been in the investment community since 1993. Daniel H. Cole received a B.S. from Guilford College and an MBA in finance from Virginia Tech. He holds the Chartered Financial Analyst® designation.

Leave a Reply

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