In the casino industry, the saying goes that the house always wins. But on the highly competitive Las Vegas strip, it’s not always that clear cut. To survive and thrive, gaming properties need to find strategies to optimize revenue at every opportunity.
Crucial to this is smart technology—the focus of our recent webinar. During this discussion, industry experts from Rainmaker, Nor1 and Travel Tripper looked at ways casino hotels can maximize profit margins in three key areas: revenue, booking and merchandising.
Click below to listen to a full recording of the webinar or download our presentation here, and read on to see a list of the top takeaways from our discussion.
Total property profit optimization
The property-wide objective for any Las Vegas gaming hotel is to fill the property with the highest value, most profitable mix of business. A key part of this is getting multiple casino departments (such as gaming, restaurants, the conference center and entertainment) to work together rather than in silos.
But the best way to operate involves a total profit optimization model. This model involves truly understanding what’s expected of each department, and how this works as an integrative resort. Driving this holistic approach, a hotel resort must understand the booking patterns and buying behavior of each one of its customers.
By operating in this cohesive way, a hotel can:
- Achieve optimal rates for each segment to drive the most profitable mix
- Have confidence that the mix of business is the best that can be achieved
- Identify opportunities and/or concerns well in advance
- Give all departments the freedom to sell rooms
- Reduce or eliminate 11th hour scrambling to sell rooms
This total profit optimization model can be broken down into three distinct areas: forecasting, marketing and reporting.
By utilizing the data at your disposal, your hotel can forecast with greater accuracy. You can then better understand each of your customer segments and analyze different buyer behaviors. All departments should be involved in this process so they know what’s happening from a room standpoint, helping them to plan accordingly.
In terms of setting rates, a lot of smaller casino hotels still have call center staff call competitors to see what they’re selling. If your hotel still operates in this way, intelligent rate shopping systems will give you a far more effective way of tracking competitor prices to remain ahead of the curve.
Finally, digging into the data you have is imperative to understand your cost of acquisition and see what goes into capturing a piece of business.
Off the back of great forecasting, your marketing will become more strategic and effective. However, certain extras steps can optimize things further.
For instance, a lot of casino hotels look at their players’ spending and gaming habits, but apply a “set and forget” mindset that means records aren’t updated. Of course, as business changes over time, your customer evaluation models need to change too.
If you have an accurate forecast, don’t make the mistake of letting marketing dictate the offers that go out. A well-informed Revenue Manager should be the one that identifies opportunities and decides the offer.
Also, be sure to track everything you do, too. The more data you collect over time, the better placed you’ll be to fine-tune your marketing strategy.
When it comes to reporting, some hotels still manually type out their information. But there are now great automation tools that can pull dynamically from your PMS and other sources, and then tie these into your revenue management system.
It’s also important to train your bosses on reports. Departments that give detailed presentations can end up leaving their colleagues confused if there’s a general lack of understanding from the top down.
Lastly, don’t wait on your OTA partner for your pace report. You should be sitting down with them and creating your own plans. Don’t be afraid to take the initiative.
The challenges faced by the hotel industry are amplified in the gaming industry. With around 150,000 hotel rooms, this is especially true in the fiercely competitive Las Vegas marketplace. This makes finding ways to maximize profits through direct bookings even more crucial.
Maximizing direct bookings for large casino properties
One of the primary ways casino properties can maximize direct booking revenue is with a booking engine designed to stimulate demand. These systems have features such as room scarcity messaging, email retargeting, and Best Rate guarantees that can significantly increase conversions.
If your property has a room count above 1,000 and you target large groups, you also need a way to sell multiple rooms during the booking process. Conventions and large groups usually want to book several rooms at once, so making this easy for them will also help conversion rates.
Additionally, resorts with multiple properties in one marketplace need multiple-property booking engines. These ensure customers can assess value across the brand in one booking experience. As a result, potential guests don’t have to go back to the internet to start a new search for a different property already in the casino group, which can save the group valuable marketing dollars.
Maximizing order value per customer
The average order value of each guest can be increased by selling ancillary products during the booking process. For instance, your booking engine could automatically offer extras, such as VIP check in, late check out, or spa treatments.
Selling packages also helps drive value. By discounting rooms or services, you can entice your customers to book. On top of that, packages encourage guests to stay on property and make use of your resort amenities.
Catering to gaming customers
A lot of casino hotels still require guests to call the hotel to book casino rates and promotions—an unnecessarily long-winded process.
A call center agent must first take the customer’s player account number to access their profile in the casino management system (CMS). Then they have to review which rate plans and offers are available to that customer, before finally processing the booking in the property management system (PMS).
In reality, today’s casino players should be able to do all of this online.
To overcome this issue, gaming properties need a booking engine that handles casino comps and lets customers log in using their player card number and pin. This kind of booking engine must also interface with casino technology vendors (such as Scientific Games and Aristocrat Technologies), and display a room as either a casino rate or comp rate.
In addition, it should be able to blend multiple rate plans and apply multiple player accounts to qualify offers. This would, for example, mean that two players visiting Las Vegas could blend their accounts to get a big suite.
Finally, customers need the ability to redeem offers and upgrades in the CMS. Once they book something in the booking engine, the booking engine needs to automatically communicate this to the CMS. If the customer then contacts the hotel call center, the agent can check the CMS and see the rate is no longer available so it’s not offered again.
Merchandising strategies for casino properties
Upselling doesn’t stop at the point of booking. Numerous touchpoints exist along the customer journey where casino resorts can merchandise a range of extras.
Let’s take an example of how merchandising can be optimized at each touchpoint of the customer journey.
A month before a group of friends plan to visit Las Vegas, they book a base room on a hotel website. At this point, a hotel can start the upsell process (such as promoting a room upgrade) on the confirmation page, either on a confirmed or standby basis.
A “confirmed” basis involves the guest paying an upgrade charge and booking into a premium room or suite. That room then gets taken out of inventory. In contrast, a “standby” basis means a guest is willing to pay $200 a night for a suite, but leaves it to the hotel to choose whether to award that at time of arrival.
Until a guest arrives, the standby basis gives a hotel the option to sell that room at full price. This is especially helpful for casino hotels waiting to see if a high-end gamer decides to visit town.
A week before arrival, your guests are getting excited about their stay. Now’s a great time to send them an email to capitalize on this pre-trip buzz, such as promoting a plush suite upgrade.
On the day before arrival, your hotel will have a really good view of its inventory and have one last chance to offer your guest a premium room via a mobile app, email or text. You can also send your guest additional options for your hotel’s shows, spas and restaurants before they consider other choices across the strip.
When your guest arrives at your property, your hotel has another major upsell opportunity. Typically, around 70-75% of customers don’t book direct with the hotel, so a property hasn’t had the chance to market to them before check in.
This means your front desk has to be adept at selling the attributes of a room. Similar to an Apple store representative reeling off the best features of the latest iPhone, your own team should know their product inside out to excite guests about upgrading.
To maximize your ancillary products while they’re on property, you can then text a guest about any special discounts and promotions, or alert them to open seats at one of your shows.
Aim to personalize offers by integrating your CRM solutions. This will make them more attractive and increase guest loyalty. For instance, if a past guest has always ordered a vegetarian meal during their stay, don’t offer them a steak. Look at their past buying habits to provide them with the most relevant offer and show you understand them.
The check-out process provides yet another opportunity for merchandising. If guests are filling out a satisfaction survey, use the time to offer them a bounceback offer for their next stay.
How the house can win: a strategy for success
The house always has the advantage when it comes to its casino business, and the same should apply to the hotel side of the business when it comes to room bookings, pricing, and pricing strategy. Smart technology solutions can help give gaming properties a distinct advantage in helping to optimize revenue management, booking, and merchandising at the hotel.
By planning as a team, harnessing the latest booking technology, and merchandising throughout the traveler journey, casino hotels can create a strategy for success—maximizing profits, creating a great guest experience, and building long-term loyalty.