Technology can manage the complexity of gaming resort growth
The business model of casinos, once known solely as glitzy gambling halls, has been evolving for decades.
Consider the changing façade of the Las Vegas Strip, which once touted “loose slots” and “single-deck blackjack tables” to attract gamblers, but now promotes spa packages, convention facilities, high-end retail outlets, concerts, residencies and big-name chefs to bring in non-gamblers, too.
In the last 25 years, the casino industry has seen a most drastic change. According to UNLV’s Center For Gaming Research’s Nevada’s Gaming Footprint, 1963-2018 report, in 1995, there were 2,574 gaming licenses in Nevada with 5,414 games, 567 tables 182,183 slots. For over 10 years, gaming continued to reign supreme. The peak came in 2007, when it was reported that there were 2,987 licenses, 6,137 games and 1,006 tables in Nevada. However, the great recession immensely affected Las Vegas, especially casinos that were overleveraged and greatly dependent on gaming to pay off accumulated debts. Shockingly, by 2018, the number of gaming licenses dropped to 2,928—the same level that it appeared to be in 2005.
During this period, there was a rise of non-gaming attractions and experiences. Today, under the roof of any casino-turned-resort on The Strip, a single guest who spends the day at the pool, spa, restaurant and nightclub might bring in more revenue than the gambler who pulls an all-nighter shooting dice at the craps table.
But for Las Vegas, Macau, Atlantic City and other gambling meccas around the world to compete for expendable dollars, casino operators need a keen understanding of what attracts visitors, where they spend their time and money and how to provide them with a world-class experience that will keep them coming back. Certainly, slot tournaments and comped rooms are no longer enough for today’s visitors. So, what does it take? Like many other industries, technology can help us uncover clues that will lead us to our answer.
COUNTING CUSTOMER LOYALTY
With dozens of different guest touchpoints, casino resorts need robust technologies to analyze guest experiences, influence marketing campaigns and assess expansion efforts. But unlike industries where complete digital transformations are being considered, casino operators—by nature of the diversity of their interests—are able to take a more holistic approach to technology and incorporate new tools into existing tech stacks and systems.
After all, conventional back-office systems such as ERP, HCM, inventory/purchasing and business systems continue to do their jobs well, just as they did before the arrival of cloud-based solutions and artificial intelligence. Gambling remains the heartbeat of the Las Vegas experience, and gaming systems—that track everything from player profiles and loyalty rewards to the theoretical win analysis of every player based on average bet—continue to help marketing teams determine the types of comps to be rewarded to players, based on their gambling habits and likelihood of a return visit.
What’s missing is the ability to integrate those same insights into the systems that track the non-gaming experiences that take place on the property—from booking to departure and through spending, including point-of-sale transactions, as well as add-on taxes, fees and services charges. Salon services, sips by the pool and late night eats all add up, providing context that can help casinos build more complete pictures of their customers. But to succeed, casinos must interweave disparate data streams to build a cohesive and complete picture of their guests.
To understand why this matters, consider some recent trends in Sin City: According to the UNLV Center Gaming Research, from 1999 to 2017, Las Vegas Strip casinos’ non-gaming revenue has risen from 52 percent to roughly 66 percent. Resort fees add $30-$40 per night, per room. Free parking is being eliminated and free buffets have given way to pricey, high-end restaurants.
With revenue from these venues often representing as much as what casinos generated, it’s no wonder that technology and advanced software systems that can tackle the complicated sales and management of these operations are mission critical to the evolution of casinos. Better understanding of how guests interact beyond the slot table and across the casino property can translate into stronger relationships and more dollars on and off the casino floor.
Now that sounds like a bet worth taking!