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As casinos continue to transform from gambling hotspots to entertainment destinations, tribal casinos are on the forefront of this trend, using their unique geography and regional pull to land a completely new type of guest for 2015 and beyond.
   
“When guests come here and see everything that we have to offer in person, it changes their perspective of what we are to them,” says Holly Gagnon, president and chief executive officer of the Pearl River Resort in Mississippi, operated by the Choctaw Resort Development Enterprise.
   
“We are within driving distance of Birmingham, Memphis and New Orleans, so it was important that we transformed ourselves into a doable getaway so guests can have a experience uniquely fine travel experience influenced by the Choctaw’s culture and people.”
   
For the Kalispel Tribe and Northern Quest Resort and Casino in northern California, a concentrated effort has been made to create various non-gaming amenities that work to both diversify and complement the gaming operation.
   
“We have found that what is truly important in this day and age is diversification,” says Kyndra Gamache, spokeswoman for the Kalispel Tribe and Northern Quest Resort and Casino. “To sustain ourselves the long run, we are always looking for new opportunities that provide growth in non-gaming areas. Progress is important both in the context of Northern Quest Resort and Casino and in the community at large, but always with an eye on what makes sense with current market conditions and regional saturation levels of amenities.”
   
Northern Quest Resort and Casino has learned how to operate smarter and more efficiently while making every amenity stand on its own in terms of sustainability.
   
“We have learned to look at our non-gaming amenities not just as loss leaders, but as an important and profitable part of the overall property experience,” says Gamache. “One of the guiding principles of the tribe has been to dream big, and dream differently.
   
“Our aim from the beginning was not only to create a profitable gaming environment, but to create a property with amenities that are best in class and present a substantial draw for guests and attract visitors to the region as a whole.”
   
For the San Manuel Band of Mission Indians, a diverse economic base includes identifying real estate opportunities and having a keen sense of business entrepreneurship to stimulate revenue. San Manuel is primarily interested in a diversified economic base beyond gaming to add direct community benefits through its business ventures.
   
This includes San Manuel Village, a 12-acre mixed-use development project located within the jurisdiction of the city of Highland, California. San Manuel served as developer for this commercial real estate investment project, which is located less than five miles from the San Manuel reservation. The property includes a hotel, restaurants, retail and commercial space, and professional offices.
   
“In the case of San Manuel Village, building a sustainable center for new businesses in the nearby city of Highland has been a process of helping existing, local businesses expand their successful business model to serve a growing community,” says Lynn Valbuena, chairwoman of the San Manuel Band of Mission Indians. “We continue to look at new economic opportunities both on and off the reservation as part of our overall efforts.”
   
In New Mexico, the Hilton Santa Fe Buffalo Thunder has decided its marketplace lies in the resort and recreation sector. Located amid the dramatic scenery of northern New Mexico’s Pojoaque Valley, the property boasts Towa Golf Club, three independent nine-hole courses that challenge golfers with dramatic elevation changes, seasonal weather conditions and scenery of extraordinary beauty.
   
Towa Golf Club offers a top experience for golfers of all levels, allowing for even more revenue to the tribe. The golf course even offers a practice facility featuring a driving range situated so players will never find the sun in their eyes. To further enhance the experience, two putting and chipping practice greens are also located on site.
   
“Adding non-gaming revenue has always been a long-term vision for our property,” says Gene Stachowski, executive director of corporate marketing at the Hilton Santa Fe Buffalo Thunder. “We want to use our large ballroom for events and concerts, VIP parties and even a cigar lounge as much as possible. We make sure, when we talk to our guests and the media, they know we are not just a place for casino gaming.”

Pearls of Wisdom

For Gagnon and the Pearl River Resort, their transformation into a non-gaming destination is a sign of success and their ability to serve multiple markets to increase revenue.
   
“We have a large number of gaming customers from Alabama who are interested in slot and table games and want the quintessential casino experience, and we provide that,” says Gagnon. “But we also have a large base for family entertainment, which came when we built our water park. We bill ourselves as a fun getaway for the family, and our motto is that we are the ‘beach within reach.’”
   
The water park at Pearl River Resort is accompanied by a golf course, providing further reasons for residents from Birmingham, Memphis and New Orleans to make the short drive to the property. In July, Pearl River completed a renovation project for 300 hotel rooms, further adding to its non-gaming revenue.
  
“In three years, we have refinanced our balance sheet, and our future financial success is very much tied to non-gaming revenue,” says Gagnon.
    
As the only fully land-based resort in the state of Mississippi, Pearl River Resort enjoys a unique level of exclusivity, which inspires an even more dynamic offering of non-gaming amenities. This includes a fine-dining steakhouse and a recent renovation to the buffet. These food and beverage options are made for private guests, but also for corporate clients.
    
“Our long-term goal is to continue growth on the convention and conference side of the business,” says Gagnon. “We want to see our midweek hotel occupancy rates increase, while we are spending much more energy in marketing and letting people know there is something for everyone here.”

Rockin’ Revenue

Perhaps the model of non-gaming revenue for tribes is the Seminole Tribe of Florida, owner of Hard Rock International. Hard Rock has a total of 174 venues in 55 countries, including 136 cafés, 19 hotels and seven casinos. The operator owns the world’s largest collection of music memorabilia, which is on display at its locations around the globe.
    
So it comes with no surprise that they opened Hard Rock Rocksino Northfield Park in late 2013 in Cleveland, Ohio. This was the first of Hard Rock’s “Rocksino” brand, a special venue that combines the music experience with the gaming environment.
   
Hard Rock Rocksino Northfield Park offers harness racing, always a valuable commodity and interest among casino players. The property has created a buzz among the people in northeast Ohio, but giving back to the community is still a top priority.
    
“We have a steadfast, undying commitment to help m
ake a difference in the community, and want our business and the community to be prosperous and thrive,” says Mark Birtha, president of Hard Rock Rocksino Northfield Park. “Prosperous communities are great places to do business and to attract and retain talent. We will continue to invest our dollars, time and resources to help our community partners make that happen.”
    
The Rocksino boasts a Hard Rock Live music venue, the fifth of its kind, which is home to unforgettable encores by acclaimed musicians and sellout crowds of over 2,500 music lovers, and also serves as a venue for variety of functions and banquets. The Rocksino also offers The Club, a 300-seat live venue featuring comedians and illusionists. It is also readily available for private parties and events. And of course, there is the world-famous Hard Rock merchandise.
   
For those looking for more of a food and beverage experience, Hard Rock has spent time, money and energy in marketing its Legendary Burger. They have been serving the iconic menu item since opening the first Hard Rock Café in London on June 14, 1971, and have given it the self-proclaimed title of the best burger in the world.
    

Making it Real

For the San Manuel Band of Mission Indians, the ability to purchase and develop commercial real estate has been the foundation for non-gaming revenue. San Manuel has invested in real estate across Southern California. With an eye for redevelopment, San Manuel holds parcels at San Bernadino International Airport, the former Norton Air Force Base, and in communities near the tribe’s San Bernardino reservation.
   
Phase two for development of the San Manuel Village began in 2011, and included the opening of Mi Cocina, a Mexican restaurant, St. Bernadine’s hospital urgent region care and the San Manuel Event Center, a state-of-the-art facility for hosting social events and business meetings.
   
“San Manuel has learned to find partners that are committed to long-term, sustainable growth models to our stable tenants at San Manuel Village,” says Valbuena. “Both San Bernardino’s urgent care and Mi Cocina opened as part of San Manuel Village phase-two projects, and have served the community for decades. As a sovereign tribal nation, San Manuel engages in economic development with an eye toward securing long-term, reliable and diverse government revenue streams. The tribe is finding success with business partners who share a long-term approach.”

Looking Up at Northern Quest

The Kalispel Tribe, operator of the Northern Quest Resort and Casino, also shares a dedication to provide the best experience possible for both gaming and non-gaming guests. Offering the non-gaming amenities allowed the tribe to further establish service standards, product quality and an elevated guest experience.
   
On the property are a AAA Four Diamond and Forbes Four Star-rated hotel resort, 14 restaurants and lounges—including a AAA Four Diamond restaurant—a Forbes Four Star-rated spa, 1,200-seat indoor and 4,200-seat outdoor music venues, and over 22,000 square feet of flexible meeting and event space.
    
“In addition to developing these amenities as part of our casino resort property, the Kalispel Tribe has branched out with a commercial laundry service, a Chevron-franchised gas and convenience store and a Fatburger franchise with two locations, one of which is a freestanding location away from the resort,” says Thomas.
    
These amenities have allowed Northern Quest to become a serious player in the heavily populated Northern California casino market.

The Santa Fe System

The non-gaming revenue system at Buffalo Thunder in Santa Fe thrives more on its outdoor experience to take advantage of the warm climate in New Mexico.
    
This includes having a music-festival concert on the driving range of its golf course.
    
Combining physical resources such as golf courses, pools, rooftops and even hotel lobbies to generate non-gaming revenue is a major trend within the entire gaming industry.
    
“We are constantly looking at bringing different types of events to the property,” says Stachowski. “It brings in a different type of clientele under a new circumstance for both the casino and our guests.”
    
Buffalo Thunder also places a heavy emphasis on food and beverage revenue, including hosting an international beer-tasting festival last spring. In May, the casino hosted a poolside barbecue event that featured a 72-ounce steak-eating contest.
    
“Our goal is to have people who have never been here to come, then tell their friends how much fun they had,” says Stachowski. “And at Buffalo Thunder, that could be accomplished by experiencing a variety of amenities on our property.”

Focusing on the Future

Future financial success for tribal casinos is definitely not limited to the roll the dice, the pull the slot handle or the dealing of the cards. Tribal casinos have made the transition to tribal entertainment venues and resorts, with best-in-class amenities, facilities and service domestically and even internationally.
   
This allows the leaders of the tribal casinos to see their role in much larger view than their predecessors a decade ago. Now they can truly position themselves as regional destinations with hotel, entertainment, dining and nightlife options every day of the year.
   
“What I expect in the next few years is a busier midweek with more hotel rooms sold, and that is why we renovated our rooms,” says Gagnon. “These amenities benefit us, and now all we have to do is continue to build more awareness.”

In the early 1950s, when Las Vegas had more sky than skyline, the pool at the Sands Hotel was considered an oasis in the desert. Vintage postcards show a classic kidney-shaped pool ringed by palm trees, with lounge chairs under striped umbrellas.
   
Guests could grab a snack or do a cannonball off the high dive, but otherwise, there wasn’t much to do at the pool. In the pre-air conditioning era, it was simply a place to cool off, slap on the Coppertone, and take a nap.

Compare that to Hakkasan Group’s Wet Republic, the day club and “Ultra Pool” at MGM Grand in Las Vegas. The 54,500-square-foot venue features 6,000 square feet of salt-water pools, dedicated valets, a sun deck that doubles as a dance floor, and king-sized beds that can accommodate up to 10 of your closest friends. Upgrade to the “VIP experience,” and you get your own bungalow with a flat-screen TV, oversized Jacuzzi and controllable misting system.
   
Nowadays, resort operators understand the value of the pool space. It has become a “Fantasy Island” for patrons, a critical component that often serves as a day club, a nightclub, a dance club and sometimes even a casino, all in one multi-purpose paradise.

Adult Swim

Some say the Big Pool Era originated with Rehab at the Hard Rock Las Vegas. When it debuted in 2003, as former Hard Rock President Kevin Kelley has said, the typical casino pool was “a slab of concrete with lounge chairs and 55-year-old cocktail waitresses slogging drinks.”
   
Rehab changed all that—and how. It opened with a splash, winning raves for its waterfall, water slides and real sand beach. Guests could loll in draped cabanas and on upholstered daybeds, and be served by bikini-clad cocktail servers. Celebrity DJs provided the soundtrack, and made Rehab the place to be for party-loving young adults.
   
The club’s success was a light-bulb moment, and helped turn the pool from an afterthought to a pivotal part of the destination.
   
“In a lot of ways, the pool is really the center of the experience,” says Andrew Kreft, executive senior principal and director of design for Lifescapes International, Inc., which has designed waterscapes for Encore Las Vegas, the Wynn and Red Rock Casino Resort, and is now working on Genting’s upcoming Resorts World Las Vegas. “It’s the heart of the resort—the dance floor of the club.”
   
For resort operators, it is also the gift that keeps on giving. A successful pool can keep patrons on property longer, generating revenues, buzz and a thousand online selfies, along with positive reviews and “likes” that make everyone else want to dive in.
   
“Properly used, it can be a revenue center with day passes in nearly all markets,” says Rich Emery, president of Thalden Boyd Emery Architects. “It’s a necessary draw for some non-gaming companions and spouses—the more reasons to stay longer, the better the incremental drop on the floor. A first-class pool is a requirement to a resort property.”
   
Stephen Ranck, project leader and principal with Gensler Architects, agrees. “As revenues continue to trend toward non-gaming components, a trend that started in Las Vegas in the early 2000s and is now over 60 percent, casinos are investigating a variety of entertainment, food and beverage,” and other non-gaming amenities like pools. “They bring a social connection to the casino experience”—a vital component for millennial customers, who number 80 million in the U.S. alone, with $200 billion in annual buying power, according to a January report in Forbes.
   
While pools like Rehab clearly target the millennial demographic, an artfully designed pool can attract patrons of many ages at different times, maximizing the value of the space.
   
“What makes a resort pool special is its appeal for a wide range of guests,” says Shannon McCallum Crawford, executive director of hotel operations for Aria Resort & Casino in Las Vegas. “We have the luxury in Las Vegas of having large pool spaces. At Aria, we’ve used that to our advantage by creating a number of smaller, more intimate environments—some that appeal to a high-energy crowd, some that appeal to those looking for a little more rest and relaxation.”
   
Day clubs tend to attract mostly millennials, Crawford says, “but our pool is a beautiful location for all types of special events: meetings and conventions, private soirees and weddings. Events after-hours are particularly inviting in the warm summer months, after the sun sets and the city lights up.”

High Water Mark

Resort guests tend to spend two to three days on average at the property, observes Kreft. The well-designed pool will offer activities that will grab and hold their interest for the duration.
   
Take the indoor Pool at Harrah’s Atlantic City. Reportedly modeled after Privilege, the world’s largest nightclub in Ibiza, Spain, it features a 90-foot-high glass dome and 82,000-gallon pool amid lush foliage. By day, it’s a sumptuous retreat where guests can lounge in private hot tubs and even order up a poolside massage. But at 10 p.m. every Wednesday, Friday and Saturday, it becomes the Pool after Dark, the city’s most popular nightclub, with a revolving cast of reality TV guests, and music by resident DJ Pauly D of Jersey Shore fame. In 2009, Harrah’s added the Loft, a $1 million upper-level gaming area where guests can play blackjack or roulette while looking out at the party.
   
“The Pool has three faces,” says Howard Weiss, regional vice president of nightlife operations for Caesars Entertainment’s Eastern Division. “It’s a resort pool seven days a week, a nightclub three nights a week, and a banquet facility on dark nights, where we cater to large companies and convention groups. If it’s January and there’s snow outside, you still feel like you’re on a tropical island. And the great part, from the resort perspective, is that it’s 82 degrees every day.”
   
Harrah’s Pool is inside due to the resort’s location in the Northeastern U.S. Indoor pools “should be considered in any weather condition,” says Bob Kelly, a senior vice president of Roy Anderson Construction. “The indoor/outdoor experience can be wildly successful when done correctly.”
   
Hnedak Bobo Group has designed a number of large-scaled, atrium-oriented resorts, “two of which have almost four acres under glass” and can accommodate pools, says principal Dike Bacon. “These environments are completely climate-controlled 365 days a year, and provide a multitude of opportunities to create outdoor experiences inside that are immune to climate changes. This is a very expensive proposition, however. The key to operational success of an atrium is to provide multiple revenue generation streams inside the space.”
   
Harrah’s Pool, for example, is adjacent to multiple venues targeted at millennials and non-gaming customers: a party pit outside the upscale Xhibition lounge; a high-end cocktail and craft beer outlet in the lobby; and new retail aimed at the 21-to-45-year old patron, says Weiss.

The Deep End

These days, as casinos evolve into “integrated resorts,” the emphasis is on “integr
ated.” Ideally, the pool is part of a “progressional” guest experience, interacting with other venues—restaurants, bars, shops, specialty gaming areas—like “pavilions in the garden,” says Kreft. The destination should be easily accessed, and the excitement teased as soon as a guest arrives on property. That goal can be harder to achieve when a pool is retrofitted onto an existing property.
   
“The big challenge is not getting brought in early enough to deal with the planning aspects. If you can come in earlier, you can plan the pool so it’s more physically integrated to the resort—not off on a strip of land, where you have to take a covered walkway and a shuttle bus to get there,” says Kreft. “It doesn’t necessarily need to be in the middle of the resort, but it should weave itself in both mentally and physically,” with landscaping and architectural elements serving as guideposts.
  
Separate points of entry and clusters of small and large gathering spaces make a pool area more multi-functional for “cocktail parties, wedding events or any kind of group,” he says. “You can cover the pool (perhaps using a translucent cover, lit from below) to gain extra square footage for events and turn it into a physical dance floor. That works especially well for smaller pool areas or hotels that don’t have a lot of space inside. A pool is an open canvas.”
   
Kreft strongly recommends real landscaping, plantings and trees wherever possible. “We never like to have anything artificial, exterior or interior, that you can touch and feel, unless you’re going for a unique abstract environment. Everything we do is theater; this is about setting the scene.” Moreover, he warns, artificial greenery doesn’t hold up over time, especially under continuous exposure to the sun. “It might look OK for a while, but may have to be replaced at some point; the cost saving over time is questionable.”

Pooling Resources

Patrick Murphy, president of Pechanga Development Corp., acknowledges that the Pechanga Band of Indians “sorely underestimated” the importance of a first-class pool when it opened its Temecula, California resort in 2002. “That’s why a proper resort-style pool complex features so prominently in our expansion plans,” he says. The Pechanga resort’s new pool complex “will span four acres and feature three pools and five hydrotherapy pools, including a family-friendly pool and a lagoon-style pool.”
   
Resort pools, especially the extravagant fantasy spaces expected by many patrons today, can be expensive and labor-intensive, says Paul Heretakis of Westar Architects. “But they can also attract thousands of people to a property in an afternoon. They must offer music environments, food and beverage. The up-charge of specialty seating and cabanas is very important. Some pool areas are large enough to have outdoor evening concerts, which are a great alternate use that commands a paid admission. This type of designed area can really become a very large cash revenue resource if it has the correct offerings and is run well.”
   
Overlooking the power of the pool “is a missed opportunity,” says Kreft. “These venues can be such greater moneymakers. And almost more importantly, they bring in an energy and electricity I don’t think you can get elsewhere. It is a congregation space. The challenge is recognizing how can you maximize and integrate it with any other offering you might have.”

The needle of finance has moved.
    
Optimism sprouts from rising new gaming structures. Born from the world of architectural  plans, optimistic chatter and concrete pours, they denote tribal expectation for growth.
    
Slowly, the industry walks further away from the Great Recession. Steadily, tribal entities ponder aggressive, not defensive postures. Should they expand or merely refresh the property to attract more attention? Where do the concepts of restaurants and entertainment venues fit? Where and how should tribal themes be expressed?
    
This question range is far more attractive than “How should jobs be saved?” Yes, some larger companies battle massive debt, but gaming in general has a launched a comeback.
    
A tentative, but widening grin dots gaming’s multibillion-dollar terrain.

A Chief Asset

The tribal market remains bullish, according to Chief Boyd, CEO and principal of Oklahoma-based Thalden Boyd Emery (TBE) Architects. Boyd recalls several financial cycles in more than 50 years of design experience, and likes the one he sees now.
    
“Many tribes are coming in, basically improving their projects and facilities,” he says. “We have got a few things going most of the time. You’ll see a situation in which the tribe may have grown, but in an awkward way, where perhaps they have expanded the casino a bit and now they need more amenities to balance the situation. Or perhaps they have a casino, but now they need a hotel.”
    
One illustration of smart growth features the Shoshone-Bannock Tribe in Idaho. TBE is helping the tribe replace a casino and connect it to the hotel. About 100 yards separate the hotel and casino now. Closing that football-field-sized gap will put prominent financial points on the board.
    
“Typically, if you are in a casino and the weather is not right, the tendency is to get up in the morning, check out of the hotel and leave,” Boyd says. “But if you get up and the casino is right there, figure for a big chance that the customers will game before they head out.
    
“The value of attaching the hotel to the casino is huge for another reason, which is why we encourage a lot of tribes to do it. If players are big gamers, just comp them for the room. Let’s say you determine that the value of a hotel night is $150. You comp that player, and as far as he is concerned, that’s free money. The first thing he is going to do is game for $150. Attaching the hotel to the casino extends the stay of the gamer.”
    
Blaine Edmo, chairman of the Tribal Council for Shoshone-Bannock, says his property embraces two trends. One is great geography. His competition is several hours away in all directions. Second, he believes the tribes have benefited from wise growth.
    
“They are a little more responsible in maintaining a certain level of business,” he says. “The tribe tries to keep it at a reasonable level, not the type of extravagance you see in many other places. I know many of them are lavish and impressive, but expensive. People who come to gamble come for the atmosphere, and as long as you have a clean facility and you are not overly congested, people will come. What you have to avoid, however, is a casino that looks run down.”
    
While broad expansion strokes may be apparent, the subtleties of when to build and how expensive to go remain tricky forecasts. Boyd says his company will double the size of a hotel at the Indigo Sky Casino for the Eastern Shawnee in Oklahoma after watching its initial suggestions rejected.
    
“We are building another hotel tower and a convention center, along with expanding some of their food venues,” Boyd indicates. “We built the first one for them four years ago, and they are turning people away. We recommended a bigger hotel in the beginning, but they wanted to go at it cautiously, which we certainly understand.”
    
A  cautious buildout is usually smart; most businesses err in the opposite direction. They overbuild, inflate the perceived market and suffer huge losses. The fact that some officials may later kick themselves for not building sooner is a nice problem. This boom would have been hard to forecast in the midst of the Great Recession.
    
Thalden Boyd Emery already lent a creative hand in building the property.
    
Indigo Sky graces the rolling, wooded hills of northeast Oklahoma. An economical way to give the site a natural feel was to level the site, which was a rocky hill. TBE blasted the site and brought in a heavy-duty crusher. Major pieces of the rock were used in bank stabilization, and made 45,000 tons for the rock base for parking and building pads.
    
The tribe also wanted the swan (symbolic of the tribe’s grace and dignity) and panther (symbolic of the tribe’s strength, courage and prowess in battle) in their project. The symbols are incorporated into the water feature at the porte cochere.

Renovate, Innovate

“The market shows a combination of renovation and addition,” says Brett Ewing, associate principal for Minnesota-based Cuningham Group, which has specialized in tribal gaming since the 1980s. “As gaming has expanded and proliferated everywhere, the customers have become more savvy,” Ewing says. “Gaming is still strong in the Native American market and continuing to grow.
    
“Renovations are, by design, messy. There are surprises when you open up the old walls, things the drawings don’t generally tell you. Yet, your operators want to run the business while they are working on it. You are, in a sense, doing surgery on somebody and keeping them alive while you are doing it.”
    
Some of Cuningham’s recent projects reveal different elements of flexibility. One of them is the new luxury hotel for the Yavapai-Apache Nation’s Cliff Castle Casino in Arizona. Cuningham will do the architecture and interior design on a project slated for 2016. The existing business model is a two-story hotel about half a mile away from the gaming space. A Dreamcatcher hotel will be built, the casino will be connected to the hotel and there will be a parking structure and multi-purpose room.
    
Flexibility is one aspect of casino design. Volatility, and its ramifications, presents another. The Cypress Bayou Casino Hotel in Charenton, Louisiana, belonging to the Chitimacha tribe, has officials crossing their fingers, holding their breath and proceeding with faith. The casino renovation, with Cuningham providing architecture and interior design, unfolds with uncertainty. Oil prices substantially affect this property, which taps the southern Louisiana and Texas markets.
    
“When oil prices plummeted, it raised concerns regarding employees of the companies in that area,” Ewing says. “If they lose their jobs, the casino may lose customers. Fortunately for all of them, oil prices are coming back at this time.”
    
The dilemma indicates the power of precise planning. If oil prices plunge mid-project, the company must usually live with the consequence.
    
The Little River Casino Resort renovation and expansion in Manistee, Michigan, offers another lesson. Cuningham provided master planning, architecture and interior design for the renovation of the main lobby, casino and buffet and the addition of a
new sports bar, steakhouse and spa/salon/pool area. The client is the Little River Band of Ottawa Indians.
     
“We probably spent close to a year and a half finalizing that plan,” Ewing explains. “What we can tell clients is that the best use of your funding is during the planning and paper phase. That’s when you can turn over everything and can eliminate potential problems. Once you start digging and pouring concrete, that’s when the money is going to be spent. Those that can afford to be patient—carefully studying potential pitfalls—benefit in the long run.”
    
Ewing says tribal philosophies vary regarding cultural expression. Most want some form of it, many will reserve it for their museum and others will weave accent pieces like art or a basket pattern into the carpeting. Hotel rooms and lobbies provide the best vehicle for cultural expression.
    
“Something always fun and interesting is knowing that a family comes with these projects,” Ewing says. “In the non-tribal world, MGM can go buy Wynn, but a tribe is always a tribe. They are never going to be merged. They are creating their projects for generations. We always have a liaison between the tribal family and ourselves.”

Maximize Space

“For many gaming tribes across the country, a challenge is not trying to figure out what to new-build next (unless market opportunities and demand warrant), but how to aggressively maximize or reinvent every square foot of existing space,” says Dike Bacon, principal for the Memphis-based Hnedak Bobo Group, which has a rich tradition with tribal gaming projects.
    
“Many larger, older facilities were designed and built during times when excess or underutilized space was of no consequence,” Bacon says. “Public spaces, lobbies, casino floors, guest rooms, and many backs of houses were huge simply because they could be, and they got financed. There are always plenty of opportunities to renovate and refurbish, but often the biggest opportunity to directly affect the bottom line is to adaptively repurpose these kinds of inefficient existing spaces into new non-gaming revenue generators and entertainment experiences.”
    
The changes don’t always have to entail bells and whistles. They can be subtle.
    
“Things don’t have to be overcomplicated,” Bacon says. “Maybe inject some old-school glamour and turn an oversized lobby into an elegant, multi-dimensional entertainment space.  Or turn an underutilized back-of-house space adjacent to an existing kitchen into a cutting-edge, chef-driven fast-casual. Move poorly located and off-trend bars to higher-profile, more socially interactive locations or reposition and redesign retail outlets for maximum storefront and product exposure.
    
“If gaming revenues stay relatively flat, the bottom-line impact of reinventing or discovering new non-gaming amenities that are properly positioned relationally inside an existing building envelope can be significant.”
    
An evolving trend in the regional gaming industry is the whole notion of not trending out, Bacon contends. This can be accomplished by capitalizing on the experiential travel economy in unique ways.
    
“A classic problem is that virtually everything new or on trend at some point becomes stale and has to be reinvented,” he says. “The best success is often found by tailoring the new offerings to the local guest in an aspirationally classic way, while not delivering something unfamiliar or out of bounds.      
    
Residually, this locavore-type product can be a draw and can often dramatically extend geographic reach.
    
“This is the sort of thing an experiential traveler seeks out—a contextual, localized experience that can’t be found or easily replicated somewhere else. It’s actually the exact opposite of a replicated brand standard, and can be a great way to expand a customer base. Indian casinos, because they are often individual and authentic anyway, are tailor-made for this.”
    
The Seneca Buffalo Creek casino expansion illustrates a property knowing what works. A $40 million expansion, modest but meaningful in today’s market, includes a two-story expansion project, a  new high-limit game room, 360 additional slot machines and 10 game tables, bringing the total number of slot machines to 1,200 and game tables to 32 after construction.
    
The expansion also will  create a new retail area and add a small performance stage for live entertainment at the Stixx Sports Bar. The existing Buffalo Savors Grill will be upgraded, and a second floor will house a new restaurant, the Western Door Steakhouse, which is one of the most popular restaurants at Seneca Gaming’s other New York casino properties. Construction will be complete in early 2017.

Getting to Yes

“There seems to be cautious optimism among tribes, along with an understanding of their market and a desire to evolve their properties accordingly,” says Mike Stewart, the global director of design for YWS Design & Architecture, with offices in Las Vegas and Singapore.
   
“To that end, we are seeing master-planning of non-gaming additions such as retail, dining and entertainment expansions on the rise,” he says. “We are seeing a carefully thought-out approach to expansion rather than a ‘build it and they will come’ philosophy. We have a client who is cautious about executing on a hotel, restaurant and gaming expansion we’ve completed the design for, but at the same time, are starting to consider a large retail expansion for their property.”
   
Stewart believes cautious optimism slowly shifts the market. The shackles of the recession have come off. Properties want to re-grow market share, first by drilling down to its origin.
   
“While loyalty programs provide a lot of information on their customers like age, income, location, etc., they don’t offer qualitative data that dives into ‘why’ their customers make certain choices,” Stewart indicates. “The research we focus on requires conversation, focus groups, shopalongs, etc., and furthermore, explores customer preferences, behaviors and desires. Using these findings, our designers can create spaces the desired customer is looking for.”
   
They have been plentiful. YWS completed a Midwest project that reaped dividends for its property and has launched another in the Southwest.
   
At Kansas Star, YWS helped the property, an integrated resort casino, achieve the widest possible appeal. Result? A venue that enjoys 33 percent more of the market and contributed to a 22 percent jump in the stock value of Boyd Gaming, the company behind Kansas Star, company officials say. The leisure destination offers an array of dining and entertainment options, plus an events center, all strategically placed around a gaming floor.
   
Locally reclaimed wood and quarried stone bring in the beauty of the Kansas plains and create a rustic, relaxed Western environment. All artwork on display is from local artisans, helping fulfill a Kansas Star priority to support its local community.
   
At Sandia, a distinctively New Mexican resort transforms the Albuquerque hotspot into a major regional destination. Phase one of the casino expansion included a spa/
pavilion building, expanded casino and 1,682-space parking garage. The resort is located in the sacred Sandia Mountains, and the design and expansion honors its natural surroundings by telling the story of the native Sandia Pueblo people, Stewart says. The phase-one size of the expansion was more than 700,000 square feet.
   
The recession may be over, but for designers of tribal casinos, the recent economic downturn has resulted in a more thoughtful, efficient design process. The “wow” is still there, but tribal clients these days are getting much more bang for their bucks.

Each year, Casino Design magazine gathers a group of experts in the field to talk about issues that impact their discipline. For this year’s edition, moderator Julie Brinkerhoff Jacobs, the president and chief financial officer of Lifescapes International, Inc., focuses on the crucial subject of non-gaming amenities.

With gaming revenues flat or declining in an increasingly competitive industry, casino resorts are struggling to decide what non-gaming amenities their guests would prefer and what brings the biggest bang for the buck. So sit back and learn how your property can tap into this lucrative market.

The faculty for this year’s roundtable includes:
• Dike Bacon, Principal, Development Leader/Director of Planning and Business Development, Hnedak Bobo
• DeRuyter Butler, Executive Vice President of Architecture, Wynn Design & Development
• Rich Emery, President & Design Principal, Thalden Boyd Emery Architects
• Paul Heretakis, Vice President, Westar Architects
• Tom Hoskens, Vice President, Founding Principal, Cuningham Group
• Bob Kelly, Senior Vice President-Pre-Construction, Roy Anderson Construction
• Andrew Kreft, Executive Senior Principal / Director of Design, Lifescapes International, Inc.
• Patrick Murphy, President, Pechanga Development Corporation
• Stephen Ranck, Southwest Hospitality Practice Area Leader, Gensler
• Richard (Dick) Rizzo, Vice Chairman, Tutor Perini Building Corp.
• Paul Steelman, CEO, Steelman Partners

How can casino operators increase the proportion of non-gaming revenues using the amenities that already exist?

HERETAKIS: Consider other uses for the spaces during hours they may be closed. More focused marketing to specific age groups that don’t currently frequent those amenities can expose them to new customers. Re-invent, re-focus and re-introduce is the key.

HOSKENS: One of the most important ways we help our clients succeed is by creating a mindset of realizing the potential of every space. We design spaces within the resort that can serve and function in a variety of experiences so that lobbies, pools, patios, gazebos, cabanas, pre-function spaces, convention spaces and the like are designed for multiple configurations. Engaging these spaces and making them “rentable” increases non-gaming revenues and diversifies the resort’s amenities to guests and the larger community. In the end, it’s about casinos creating multi-use spaces.

KELLY: The hotel room has always been a place where the gamblers could sleep in between all the excitement of the casino floor and the showroom. No more. In today’s competitive markets, guest rooms are as much of an attraction as the rest of the casino and hotel. We will be exploring current trends that have proven to be successful in increasing guest satisfaction with room accommodations, and especially those that create the desire to come back again for more.

MURPHY: One of the keys to our success has been the constant refreshing and reinventing of our existing facilities. Whether it is hotel rooms, restaurants or meeting facilities, we are regularly renovating the property in order to keep it new and exciting for our guests. In 2014, we unveiled a major multimillion-dollar renovation of our 22,000-square-foot hotel lobby, two restaurants and the addition of two new dining outlets. We saw immediate improvements in the performance of these renovated outlets.

RIZZO: Management needs to be continually aware from customer feedback of upgrades and modifications that would increase revenues. This can be in the number and variety of food and beverage options as well the local and regional competition. Recently, we have seen a trend in adding and upgrading food court offerings and incorporating coffee, dessert and wine tasting to their venues.

STEELMAN: Every casino maximizes the amount of non-gaming revenue for every tandem used space. Simple techniques of advertising (specials, etc.) can increase revenue and attendance. The idea is to develop non-gaming attractions that enhance the casino gaming experience. If that occurs, the activities will be made for one another and the non-gaming and the gaming areas will all be energized with people and profits.

What are some of the factors to consider when adding a hotel to a stand-alone casino?

EMERY: One of the biggest mistakes we see in the addition of hotels adjoining casinos is a lack of connection. Generally speaking, the entry sequence of the casino and hotel should have a “WOW” moment and allow the guests to make choices as to where to go. We always try to have a visual link between the hotel front desk and part of the gaming floor.

HOSKENS: Hotels are not just rooms. Hotels are market differentiators, and it’s critical to use them to that end. Having the ability to vary the room choices within a resort for the clientele desired is the most advantageous.

We work with our clients to understand these four fundamentals:

1: The ratio of rooms to slots. It’s important to size a hotel based on anticipated occupancy and market potential.

2: The need to differentiate your hotel from the competition. A solid market analysis will enable clients to make smart decisions about how they can fill a void in the marketplace and attract guests from the surrounding market or even become a destination magnet.

3: Position the hotel as a core component of the casino resort. An integrated resort works when all the building types complement one another and there is a core purpose and design intent unifying the resort.

4: Create hotel amenities to complement resort amenities.

KELLY: The weakest model we see, and the one to avoid, is the hotel that was not planned. The hotel with no narrative—the hotel that is not marketed to a defined group of guests. Do that and you end up being nothing to anybody rather than something for everyone. As you evaluate options and make decisions, put yourself in your guest’s place. Imagine walking into your room, putting away your clothes, washing up and having a snack. A design and amenities that satisfy you will likely do the same for your guests.

KREFT: We have, from time to time, worked on properties that started out with just a casino. When this occurs, we meet with the team, which usually includes ownership, the architect/planner, general contractor and other operations-oriented team members, to discuss how the overall property will be “master-planned” moving forward. All sorts of conditions need to be addressed early on when considering the addition of a hotel. The significance of a well-functioning porte-cochere (for guests, valet, bus drop, etc.) is as significant as the entry drive approach, access to the pool area within the hotel, its convenience to your hotel guests and the amenities at the pool area that make most sense for a particular property and its guest profile.

We know that your guests’ first impression will be made as they arrive off the main thoroughfare into the casino property. The entry drive would likely need to be upgraded to demonstrate a fresh, new property image. We are only one of several consultants that need to be included at a kick-off meeting to ensure that the site plan is maximizing the best aspects of a property and its marketing intent.

MURPHY: From a tribal gaming perspective, there are a host of factors to consider: market and financial feasibility, how a hotel would fit in the tribe’s long-term business strategy, and regulatory considerations. There are a lot of costs associated with hotel operations, so a threshold question to ask is whether or not a hotel will result in enough increased guest visitations and spend to warrant the expense.

Recently, we announced plans for a non-gaming expansion at Pechanga. The project is designed to meet customer demand for more rooms, a true resort-style pool experience, a luxury spa and more A-list concerts. For us, our decision was rooted in the fact that our existing hotel has been at capacity for several years. Like everyone else, we were affected by the Great Recession, but in recent years, our occupancy rates have rebounded strongly. Just a few months ago, in fact, our team celebrated 365 consecutive days of 100 percent occupancy.

STEELMAN: The adding of a hotel is absolutely a must. There is not one hotel expansion that has not increased the gaming win. The casino’s best customers stay in that hotel.

What does a hotel do for a casino, both in terms of visitations and revenue?

BACON: A hotel speaks to the notion of a resort experience more than any other amenity (golf not withstanding) and is often the primary component of a true integrated resort, which is fancy term for mixed-use development. No other amenity contributes to longer length of stay than a hotel. F&B patronage is significantly stronger with an overnight guest. The fundamental key for success, however, is recognizing that you’re not in the hotel business but the gaming resort business.

EMERY: Properly sized, a hotel should add an incremental drop of 20 percent to 40 percent on the gaming floor. Our historical data from properties shows that an empty guest room on a gaming property loses $50 a room night. The goal of a hotel is to provide a stay-and-play option for that “getaway” guest. Guests will enjoy the amenities more, food and beverage sales will increase and the gaming floor will become more dynamic.

RANCK: With the right mix and critical mass of amenities, hotels within an integrated resort provide the best opportunities for brand loyalty by setting the level of service and providing a unique guest experience. Hotels can connect to guests with authentic local experiences and engage guests with technology to personalize the visit.

Meetings and conventions are a fast-growing part of most resorts. What are the secrets of adding a successful meetings and convention business?

BACON: The meetings and convention business have become extremely competitive, but can be a great non-gaming revenue generator. The average meeting attendee will book an early week room night and use an expense account to spend generously on F&B. One of the biggest contributors to incremental revenue success is the proper promotion of the space to the right groups. It’s no secret that the typical meeting attendee is an average gamer, so it’s critical to market to the right meeting planners in order to land the right demographics.

KELLY: Do the analysis! Meeting space is costly to develop and needs a great business plan to make it successful. Know your market and it will increase hotel visits and increase F&B business; make it too big and you cannot get a return on investment. A great sales staff can fill your meeting space many months in advance; this will mean your hotel rooms on Monday through Thursday will be occupied and create increased room revenue. The analysis will direct you to the right business plan.

KREFT: When we get involved with designing convention centers, we focus on several aspects. We are concerned about accessing parking structures and/or parking lots, providing access for taxi dropoff, guest dropoff and safe walkways from the structures to the convention center (if not integrated directly into the hotel). We also encourage hotel owners and their architects to make sure that there are some areas provided for private, exterior garden areas and patios for special event guests.

RANCK: Technology and ease of access are important for meetings and conventions. Guests are also increasingly looking for sustainable facilities in which to hold their future events. We’ve seen a trend for small to mid-sized hotels to provide flexible meeting centers that can be broken out to service individual clients or combined with larger ballrooms for bigger events. Likewise, larger convention centers are looking at new ways to program flexible ballroom spaces or to make full use of smaller breakout meeting rooms.

RIZZO: Recognize the size, needs and type of conference the convention/trade/professional convention business you are targeting is wanting. Also, the same is true for regional and local community groups/functions.

STEELMAN: Timing is the most critical factor. If you desire to be in the convention expo business, the lead times are very long. Banqueting and small meetings can immediately become successful. Conventions energize the casino and the non-gaming attractions during the middle of the week, when casino traffic is lighter.

Nightclubs are very lucrative but difficult to operate and control. What are some of the factors when considering adding this amenity?

BUTLER: Nightclubs, if done properly, can bring in a whole new source of energy and revenue potential. They also bring a myriad of problems that can be solved, but require special considerations. Factors to consider are crowd management, the crush of peak-time partygoers on other amenities, noise and vibration on adjacent spaces and flexibility to enhance and upgrade as competition shifts or tastes change. Patrons are always looking for the best new thing, so they tend to migrate to the next newest club, making competition stiff and constantly changing.

HERETAKIS: In Vegas, go big or go home! The entry fee is well over $50 million. If you spend less, you are a non-existent B venue with no real attraction or draw. You will be closed within weeks, not even months. The mega-clubs do well, but the days of high profit margins have been given away to DJs and live acts. If you’re up for it, a highly visible club will give you credit among a group of millennials whose true spend value in the long run has yet to be determined.

HOSKENS: The club experience has really exploded onto the scene in a good way, but when you don’t take the time to create a comprehensive plan from design to management, it can go wrong really fast. Not only do you need to think about designing a space that is captivating and one where people want to get energized, you must consider how the club integrates with the entire hotel, resort and casino functions. And don’t forget the importance of the club’s management. Hiring experienced managers and promoters who are part of your resort’s management team will enable close coordination of efforts to give your guests a seamless nightclub and resort experience.

KREFT: We have been involved with many interesting nightclubs inside and outside of the casino areas, having designed many of the “beach club” venues that are really nightclubs for hotel guests and visitors such as Tao Beach, Surrender/Encore and Harrah’s enclosed pool area, which converts to a nightclub venue at night. We have also designed pool areas that are adjacent to primarily indoor nightclubs (for example, XS at Wynn) so that a portion of the pool area at night (and in good weather) can open up some additional exterior seating and bar areas, enhancing the guest experience.

STEELMAN: All nightclubs are not lucrative. Fifty have closed in Las Vegas since the beginning of the craze. We always suggest they should be designed in a place with a secondary use such as a pool, since they are infrequently utilized.

What non-gaming amenity gives the most return on investment? And is that always the wisest choice?

BUTLER: Of the higher return-on-investment amenities, the nightclub scene has quickly become one of the highest potentials as a top lucrative option. Margins can be very high, operating costs can be relatively low (depending on the entertainment policy), and operating time commitment can be as low as two nights per week at four to six hours, or if successful, can be multiple nights. Spillover to other amenities in the facility can boost those operations as well and create an energy buzz.

EMERY: Oddly enough, our experience has shown us that the addition of close covered parking is the best return on investment. It takes the worst weather day—too hot, too cold or raining—and makes it one of the best. Additionally, it moves more guests closer to their first gaming opportunity. Accounting for the expanded parking capabilities, the extended playing time and the inclement weather; the ROI of a parking structure is above 49 percent.

What variables should be considered when a shopping experience is contemplated?

EMERY: There are many variables to consider: the correct mix of stores, the proximity and the demographic. A well-placed series of stores and unique offerings can bring the occasional gamer to your facility. Providing food and beverage offerings that shoppers want, that complement the casino offerings and do not compete, is critical. Proper infrastructure is critical to ease the movement between the resort and shopping.

HERETAKIS: Retail is a very tough offering. Once again, size matters. People want a full mall experience with lots of offerings at all price points. Most of the smaller mini-mall offerings in casinos historically have not done well. People expect their everyday typical stores (Victoria’s Secret, Bebe, H&M) as well as the special treat spend of a luxury brand. Las Vegas retail has also done well because of international tourism. Does your casino have that draw?

HOSKENS: It is not about shopping, it is about creating experiences that excite the guest and allow shopping to happen. It is about placemaking, creating nodes and paths to destinations. It’s not enough to rely on a series of shops to generate a buzz or build your resort’s brand. Our goal for our clients is to design a retail experience that is centered on placemaking. Retail is not just about shopping, it’s about designing a place for people to gather.

How do bars and restaurants complement the casino experience?

BUTLER: Bars and restaurants serve as an amenity to complement gaming by providing a bit of a respite, a pause from the gaming excitement for social interaction with friends to refresh and socialize. They can provide a variety of environments, commensurate with the casino or contrasting, differing cuisine to suit different tastes, maintain the energy level or a time out, and can become a destination in and of themselves with gaming becoming the amenity.

RIZZO: Experience has shown the food and beverage offerings can be both a source of revenue and a way to retain customers in the casino for longer periods of time. Obviously, this greatly depends on the quality and variety of offers, as well as how entertainment offerings are incorporated in them.

t was a classic humid June night in downtown Cleveland, but the scene was anything but typical. The clock had struck midnight at about the same time streams of mostly ecstatic Cavs fans began pouring out of “The Q” (Quicken Loans Arena). Native son Lebron James had just put the finishing touches on a brilliant performance that had propelled Cleveland to a 2-games-to-1 lead in the NBA Finals.
  
The many indoor-outdoor bars that surround the arena quickly swelled beyond capacity, while seemingly endless waves of millennials, adorned in Cleveland Cavaliers gear, just kept coming. There was singing and dancing in the streets—much of it influenced by approachable inebriation. For a city beaten down by decades of hard times, the guarded optimism hanging in the air was as blissful as it was distinctly foreign.    

For those not inclined to partake in what had the potential to slip into a display of marked public lunacy, but were also not quite ready to call it a night, there was only one other obvious available option: the Horseshoe Casino, located just across the street from the arena.
    
The Cavs are owned by magnate Dan Gilbert, who made much of his $5 billion fortune via his ownership of Quicken Loans. Gilbert’s entrepreneurial success with that not-so-sexy form of commerce allowed him the opportunity to get into two comparatively flashy entertainment businesses vis-à-vis sports and gambling. In Cleveland, Gilbert’s two flagship businesses are his NBA franchise, the Cavaliers, and the Horseshoe Casino, which is physically connected, by “sky-bridge” walkway, to Quicken Loans Arena.
    
On that unusual night one group of attendees, making their way from the arena to the casino, particularly stuck out. They appeared to be in their early 30s and only a few of them were wearing NBA apparel—of the visiting Golden State Warriors. Amid a backdrop whereby the crowd and the increasingly rowdy atmosphere was markedly Midwest-American-white, the other distinguishing characteristic of the group was even more distinctive: they were ethnically Chinese.
    
The casino floor, like the surrounding streets outside, was jam-packed with a mix of mostly voyeuristic curiosity seekers coming from the arena, casual gamblers and traditional slot players who may have forgotten about the big game that night and were now dealing with the consequences.
    
Perhaps surprisingly to some, the Horseshoe Cleveland has baccarat tables. It will come as a surprise to few that this group of Chinese guests had found them. As they saddled up to positions 1-2-3-5-6, one of the women in the group reached into her purse, pulled out a stack of money and pushed it across the table toward the dealer to exchange for playing chips.
    
In baccarat there is usually no position 4, because that number is homophonous with “death” in Chinese; the nuances of superstition and luck within the mindset of the Asian gambler are seemingly endless.
    
Several octaves below the ambient crowd noise, slot machine clamor and John Mellencamp’s “Hurts So Good,” the young Chinese woman tapped her cash and rather firmly said to the dealer, “li?ng wàn” ($20,000). In short order a casino host, also of Asian descent, appeared and engaged the group in some light Chinese banter. It was just another Tuesday night in Cleveland, Ohio.

The Future is Asian

For some regional casinos, a few observed baccarat tables and a handful of Chinese-speaking staff may currently suffice. But for businesses located within geographic zones containing larger numbers of Asian residents and those situated in destination markets, this type of customer—specifically the Chinese millennial leisure traveler—will soon become increasingly important.
   
Chinese outbound tourists are already the world’s most numerous and most high-volume spenders. In 2014, a record 109 million Chinese outbound tourists spent $164 billion. By 2019, these numbers are expected to balloon to 174 million people spending an incredible $264 billion annually on outbound tourism. Nearly all of this growth in foreign travel has come over the past 10 years; in 2000, there were only 10 million Chinese outbound tourists.
   
The driving force behind this new wave of leisure travelers is Chinese millennials—especially those between 25 and 34 years old, who are in many ways different from both their parents and their peer groups in Western nations. This group of Chinese, born between 1980 and 1989, comprise more than 200 million people, or about 17 percent of China’s 1.3 billion total population.
   
With China’s economy being among the largest in the world, the income levels of many of its citizens are now high enough to be able to travel abroad. Unlike their American counterparts still mired by the aftereffects of the Great Recession, Chinese millennials have seen their incomes rise nearly 35 percent over the past three years. In just the past year, the number of Chinese outbound travelers has increased by an astonishing 20 percent. This has not gone unnoticed by hoteliers, with nearly 60 percent of U.S. and 80 percent of AsiaPac destination-market businesses noting discernible increases in visitation by Chinese millennial guests.
   
Fully 90 percent of Chinese millennials surveyed recently by Hotels.com’s Chinese International Travel Monitor stated that “leisure” was their main reason for international travel.
   
Gambling overseas is also a very popular vacation activity for Chinese tourists. In the last five years, the number of Chinese nationals traveling to Las Vegas has jumped by 80 percent, according to the Wall Street Journal. In a recent survey of mainland Chinese millennials, Las Vegas was cited as the most popular outbound destination for a leisure travel experience.
   
Two of the gaming industry’s leading markets, Macau and Las Vegas, are facing a similar challenge, whereby demographic trends in particular are disrupting traditional business models.
   
In the case of Macau—which has seen historic gambling revenue lows this year—there is a shift toward diversification, largely via government mandate, away from a near total reliance on the VIP market and toward a broadening of amenities that have a better chance of appealing to China’s growing middle class, which McKinsey China forecasts will constitute 630 million people by 2022.
   
In Las Vegas, an aging population of slot players is being replaced by younger consumers, including Chinese millennials, who by and large have thus far shown a marked lack of interest in traditional casino games compared to generations past.
   
Shopping is perhaps the most popular activity of Chinese outbound tourists. China’s import and consumption tax rates have resulted in luxury goods often costing several times more in mainland China, compared to the same item sold in Western nations.     
   
In England, Chinese tourists spent nearly $3,000 per person per trip, three times the market average. Much of this expenditure is going toward shopping, which for many Chinese is prioritized above other travel items such as accommodations.
   
Other popular activities among Chinese millennial leisure travelers include visiting important landmarks—though the younger generations are shunning group tours, whereby one might get off a bus to take a quick picture and then immediately get back on to go to the next stop, in favor
of deeper cultural experiences.
   
Chinese millennials are the first generation to be born into the country’s one-child policy. As a result, they have more spending power than prior generations. Though they are putting off marriage a couple of years, on average, later in life than their parents did, Chinese millennials are twice as likely to be married than their U.S. counterparts.
   
A recent survey among Chinese millennials found that 65 percent travel with family and/or their significant others versus traveling with friends. This behavior obviously influences the types of experiences and activities they seek, and may partially explain why nightclubs and other places that encourage “social collisions” are generally of less interest among this group of consumers; this is in direct contrast to what American millennials are typically seeking out in a leisure entertainment environment.
   
As is the case with their U.S. counterparts, younger Chinese consumers rely heavily on mobile technology, social media and peer reviews when making purchase decisions related to their trips abroad. According to a recent Hotels.com survey, nearly half of Chinese millennials rely on word-of-mouth and consumer reviews online, while 80 percent within this demographic used a desktop, laptop or mobile device to plan and book their travel in 2014 (compared to 53 percent the year before). It is not surprising then that, like younger Americans, Chinese millennials rank “free Wi-Fi” as by far their most desirable amenity when traveling.
   
Unlike American millennials, who have transformed places like Las Vegas into a nightclub and dayclub mecca, Chinese younger consumers are generally disinterested in “clubbing” and the traditional, alcohol-fueled bar scene. They also prefer indoor pools to outdoor, perhaps partially because of a desire to stay out of the sun due somewhat to perceived social stigmas pertaining to darker skin tones that are not uncommon in emerging countries.
   
The United States is among the nations most visited by Chinese millennial tourists outside of Asia, along with France and Australia. Within these places, and beyond, this block of consumers is increasingly looking for something special and personalized, which they can share with friends via their social networks. When studying the Chinese millennial, one finds that this notion of prioritizing the individual self is a recurring theme; and it is also one which hints at ways to reach and retain them as customers.
    
With free Wi-Fi as a baseline expectation, forward-thinking leisure industry companies can look to engage Chinese millennials in ways that tap into their desire for something custom-made, such as leveraging the power of dominant social networks like WeChat to communicate with them in interesting and sharable ways.
    
It is vitally important for businesses within hospitality, retail, restaurant and entertainment verticals to understand the behaviors and drivers of the Chinese millennial—a different set of consumers poised to transform these industries for years to come.

Generational Shift

Chinese born in the 1980s—also referred to within China as the “Balinghou” generation—are distinctively different. Since the death of Mao Zedong, rapid change has occurred in China, which has paved the way for new prospects and challenges that are far different from what their parents experienced at the same age. Radical disparities exist between Chinese youth and older generations.
   
Simultaneous with China’s swift economic growth has been a global explosion of new technology, bringing unique methods of communication and amplified exposure to other cultures. Increased prosperity, freedom and exposure to new ideas have also led Chinese millennials to socialize in new ways.
   
WeChat (called “Weixin,” literally translated as “micro-message” in China) is one of China’s most popular social networks. It’s part WhatsApp and part Facebook; since its debut in 2011, WeChat now boasts 450 million users in China. The mobile app’s core users are urban youths, many of whom default to the platform over exchanging phone numbers as a preferred way to keep in touch with their friends.
   
Similar to Twitter in that feeds are created to allow users to receive information as it is pushed out by chosen channels, WeChat is primarily a text and audio service between private users or small, privately invited groups of up to 100 people. Users can extend their reach by posting “moments” which are streams of images, text messages and links available only within their network of contacts in a way that is more streamlined than Facebook’s “wall.”
   
WeChat has made itself a potent tool for marketers looking to tap into tightly knit groups—such as Chinese millennial travelers. Marketing, sales of physical products and/or booking of services are all available on the platform to companies registered in China.
   
As Chinese consumers tend to be even more influenced by their peers than Westerners, the size, scope and functionality of the app presents a potent mix for businesses to contemplate tapping into. WeChat for Business (in China) allows B2C payments in areas for consumables such as plane tickets, hotel reservations and taxi fares. Payments are made by scanning an offline or QR code or via a payment processing platform contained within the app that links to the user’s bank account.
   
WeChat users average more than 40 minutes per day using the app, with more than 55 percent of users indicating they open the app at least 10 times per day. The Chinese-language version of WeChat has many additional features that make it much deeper than just a messaging platform. It also has mobile news, blogging, online storefront, mobile wallet, “people nearby” and even job-hunting uses. University of Pennsylvania researcher Jiaqi Wu makes the argument that the uniqueness of how the app works and who is using it (Chinese millennials) transcend the virtual and enter the physical world of networking, relationships and social interaction.
   
In many Western countries, young people socialize at cafés, bars or clubs. Although these types of venues can also be found throughout China, Chinese millennials normally favor different types of social environments. Perhaps no more universal example exists, in China and throughout Southeast Asia, than karaoke (or “KTV,” short for Karaoke Television), which is a wildly popular leisure activity across generations, including millennials.
   
In a nation such as China, where consumption of alcohol is less prevalent than it is in the West, karaoke provides a livelier alternative to other types of non-alcohol-related activities such as going to the movies. Guests pay hourly rates for private rooms with padded walls and sort through catalogues that often contain thousands of songs to choose from. Venues range from small and cheap to vast and ostentatious. Many have interactive gaming tables and expansive food offerings.
   
Opportunities exist for Western businesses that may currently, or in the near future, seek to attract Chinese millennials by integrating karaoke itself and also—perhaps more importantly— by extracting the compelling and applicable fragments of a karaoke experience into other business units.
   
Just as a Westerner traveling in China, perhaps reluctant to embarrass himself in public and/or feel overwhelmed by the vast cultural differences, the Ch
inese millennial may change his tune (pun intended) and start belting out verses when a Bon Jovi song is played. So too does the opportunity exist for Western businesses to spark a sense of nostalgia-for-home by incorporating singers such as Andy Lau into the mix, be it within a karaoke environment or beyond.
   
Tea Houses have traditionally been another very popular social activity in China, and are often associated with relaxation, entertainment, interaction and a forum for sharing thoughts with friends and colleagues.
   
In recent years, Chinese millennials have shown a particular affinity for coffee consumption. Cafés such as Starbucks and Coffee Bean & Tea Leaf (“Xiangbinfei” in China) have become popular places for young people, influenced by Western culture, to hang out. The architecture in these cafés often combines historic and modern styles in ways that appeal to a demographic with one foot in each era.
   
For businesses attempting to court Chinese millennials, there may be opportunities to convert physical environments that are static at certain times, such as a bar or lounge in the early afternoon, into transformable modules that can be converted for different types of consumers throughout the day.
  
Wildly popular among Chinese millennials, hot pot chain Hai Di Lao competes in a very difficult space. The company describes its physical environment as an ideal place for social gatherings—for customers with some extra time to spare.
   
A “hot pot” style of eating basically involves dipping a seemingly endless variety of meats and vegetables in simmering broth. The cooking concept is simple and easy for competitors to replicate. Hai Di Lao has become one of China’s most successful “hot pot” brands largely by focusing on experiential components of the dining (and pre-dining) environment. The restaurant chain has a strong reputation for customer and employee loyalty, which are both atypical for Chinese hospitality businesses.
   
The experiential element of Hai Di Lao undoubtedly plays an important role in the chain’s success. Customer satisfaction is actually increased while patrons are waiting (sometimes hours) for their tables because the restaurant has so many entertainment and leisure options available. This type of creative queuing system opens many possibilities for other types of leisure and hospitality businesses to tap into the unique phases of a particular experience, beginning with the wait for the experience to begin.
   
American millennial views on the correlation between money and happiness overwhelmingly lean toward spending money on experiences over things. Chinese millennials seem to want both.

Chinese Millennial Mindset

Over the course of the next several years, Chinese millennials will be the demographic force behind revenue growth for businesses in leisure verticals.
   
The demands of this consumer set are complex and steeped in juxtaposition with their parents, thousands of years of history and the outside world they are so eager to explore. For global corporations doing business in China, there is added opportunity (and risk) in attempting to woo Chinese millennials.
   
Attracting Chinese millennials to a physical product, or a physical space, requires an acknowledgement that what has worked in the past will likely not work with them.
   
It would be a significant miscalculation, for example, to assume they will respond to what (and how) their parents consume. Chinese millennials definitely want material things. But they also want to express themselves in ways they are comfortable with, which appeal to their desire to really know who they are hanging out with in their quest for deep and meaningful relationships with other people.
   
Investment in a consumer insights study geared toward the specific goals of a development project that seeks to attract Chinese millennials would be a worthwhile investment for any business looking to tap into this enormous potential revenue stream.
   
For leisure and interconnected businesses, this means developing beyond a small, singular localized element within a designated environment. The larger experience—driven by a desire for something different, unique and genuine—should also be contemplated in ways that reflect end even encourage the blurring of cultural lines to that place where discovery of something “new” is likely always the experience for someone in the room.