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!).

14,818 thoughts on “Casino Revenue Management”

  3. dress up is always a great and exciting one, or strip poker. Perhaps get some dice from a game board and decide if you land on certain numbers what those actions are. Spice it up is always a great thing!! tree removal rye

  5. I would also like to add that if you do not surely have an insurance policy or perhaps you do not participate in any group insurance, you could well benefit from seeking the assistance of a health insurance professional. Self-employed or people with medical conditions usually seek the help of the health insurance specialist. Thanks for your writing. labtoto

  6. Having Get Reports Write-up Submission move Product, you can actually shift deeper and even speedier than you’ve ever imagined on the subject of what you can do internet. penguiana

  8. I rather encourage you to learn about the flexibility of forms, fields and widgets and how it’s used in the automatic Admin interface. pengu

  10. Here, I’ve read many comments about iGram, and I found the i Gram, tool to be my favorite. It’s easier to use, and this tool is completely free. I recommend everyone to use this tool.

  14. Hey there! Looking for the latest updates in the world of cricket? Check out the hottest 7inrcasino Stay informed about match results, player performances, and upcoming fixtures. From thrilling international tournaments to domestic league action, we’ve got you covered with all the highlights and insights. Don’t miss out on any of the excitement—keep up with today’s cricket news and be in the know!

  15. While https://Google.com might be synonymous with “search engine,” it’s morphed into a tech octopus with arms in every corner of our digital lives. Sure, it remains the undefeated champion of web searches, the ultimate information concierge. But Google’s grip extends beyond the screen.

  16. At InWisdoo, we are passionate about empowering individuals on their path to personal growth.
    Our carefully curated content encompasses a diverse range of topics, including self-discovery, mindfulness, goal-setting, and the cultivation of positive habits. Whether you’re seeking inspiration to overcome challenges or aiming to enhance your overall well-being, InWisdoo is your trusted companion in the pursuit of wisdom.
    inwisdoo.com

  17. At InWisdoo, we are passionate about empowering individuals on their path to personal growth.
    Our carefully curated content encompasses a diverse range of topics, including self-discovery, mindfulness, goal-setting, and the cultivation of positive habits. Whether you’re seeking inspiration to overcome challenges or aiming to enhance your overall well-being, InWisdoo is your trusted companion in the pursuit of wisdom.
    https://inwisdoo.com/

  19. Alexistogel merupakan situs slot gacor dimana situs ini dilengkapi dengan rekomendasi pola-pola terbaik yang sangat menguntungkan saat ini. bandar togel

  23. hey there and thank you for your info – I’ve certainly picked up something new from right here. I did however expertise several technical points using this web site, since I experienced to reload the site many times previous to I could get it to load correctly. I had been wondering if your web hosting is OK? Not that I’m complaining, but sluggish loading instances times will sometimes affect your placement in google and can damage your high-quality score if advertising and marketing with Adwords. Anyway I am adding this RSS to my email and could look out for a lot more of your respective fascinating content. Make sure you update this again very soon.. سایت مای مدیو

  24. I like your website.. great shades & motif. Performed people design and style this fabulous website yourself or even have people rely on someone else to make it work for you personally? Plz interact when I!|m looking to pattern by myself blog site plus would want to find out wherever u received this particular through. thank you مای مدیو انتخاب رشته

  32. HWGSLOT is here to serve lottery lovers throughout Indonesia.

    HWGSLOT only organizes Lotteries from countries that provide legal and valid lottery results such as SINGAPORE49, SINGAPORE45, HONG KONG and SYDNEY.

    HWGSLOT has been operating since 2015 by opening Togel betting accounts online.

  34. Looking for reliable Roofing in Omaha? Shamrock roofers is your trusted local expert roofing contractors. From roof repairs to installations, our skilled team provides top-quality solutions. Contact us today for professional assistance with your residential or commercial roofing in Omaha.

  39. I wish to show my appreciation to you for rescuing me from this particular instance. As a result of scouting through the search engines and coming across ideas that were not helpful, I thought my entire life was gone. Being alive minus the strategies to the issues you’ve sorted out through your entire blog post is a critical case, and those which might have in a negative way affected my career if I hadn’t encountered your blog post. Your own personal expertise and kindness in dealing with the whole lot was crucial. I don’t know what I would’ve done if I hadn’t discovered such a stuff like this. I can at this moment relish my future. Thanks a lot very much for your professional and result oriented guide. I will not hesitate to propose your web site to anyone who wants and needs care on this issue. best mineral water in South Africa

  42. Wow, incredible weblog format! How long have you been running a blog for? you make running a blog look easy. The whole look of your web site is magnificent, well the content material! 총판노하우

  44. I have been browsing on-line more than three hours these days, yet I by no means found any interesting article like yours. It¡¦s beautiful worth sufficient for me. In my opinion, if all website owners and bloggers made excellent content as you probably did, the net will likely be much more helpful than ever before. sdtoto

  45. Splendid post. We learn brand new stuff upon various blogs daily. Couple of revitalizing to determine content material using their company writers as well as grow to be familiar having a little some thing their own certain. I’d believe to make use of a few inside the information on my blog need to don’t mind. Normally I’ll provides a link back up in internet internet site. Thanks sharing. sdtoto

  46. Awesome! I thank you your contribution to this matter. It has been insightful. my blog: how to make a girl like you sdtoto

  47. สล็อตเว็บตรง แตกง่ายได้เงินไวการันตียอดจ่ายสูงที่ดีที่สุดในประเทศไทยที่มีผู้เล่นมากที่สุด อัตราการจ่ายสูงที่สุด เว็บชั้นนำอันดับ 1 ของประเทศไทย

  48. Thanks for the tips on credit repair on this amazing web-site. What I would offer as advice to people will be to give up this mentality that they may buy at this point and shell out later. As a society all of us tend to do this for many things. This includes trips, furniture, and items we’d like. However, you have to separate a person’s wants from all the needs. While you are working to raise your credit score make some trade-offs. For example you possibly can shop online to economize or you can look at second hand suppliers instead of high priced department stores regarding clothing. sdtoto

  50. Pretty nice post. I just stumbled upon your weblog and wanted to say that I’ve truly enjoyed surfing around your blog posts. In any case I’ll be subscribing to your rss feed and I hope you write again soon. sdtoto

Leave a Reply

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