Casino operators have long known their best customers. Casino industry hoteliers, not so much.
Marketing professionals in the slot department and, to a lesser extent, the pit, have relied on data for decades to determine who their most valuable customers are, what they like, and how to transform all that information into repeat business through comps.
It’s only been a relatively recent phenomenon that the hospitality side of the industry has sought a similar view of its customers. In an era that has seen hotel, dining, spas and other non-gaming amenities come to dominate revenues for the large Las Vegas Strip casino resorts, technology is catching up with the hotel side of the industry in the form of software and systems that mine data from every corner of a resort.
The result is a complete picture of where in a resort a given customer is spending money, and how much. It is information used to guide decisions on room pricing, marketing offers and, combined and integrated with the data from the casino loyalty clubs, to get the best return on marketing dollars.
Casino resorts were not run efficiently when there were separate systems for the hotel and casino, comments Marco Benvenuti, co-founder and chief marketing and strategy officer for Duetto, a software and consulting firm that supplies revenue enhancement solutions for combined casino resort
operations. “Basically, you had two databases, one for casino players—which, by the way, got all the attention of the marketing resources—and another for non-casino customers,” says Benvenuti, who co-founded Duetto after creating a combined revenue management system at Wynn Resorts.
Traditionally, while there was a marketer in charge of interpreting data from non-gaming revenue streams, “it was a very disjointed effort,” says Benvenuti.
“For example, you would say, ‘We have a customer that always comes to this spot and spends all his money; let’s do this for them. It was very ad-hoc.”
At Wynn Resorts, Benvenuti spent just over a year as IT director before being named executive director of enterprise strategy, charged with creating an ecosystem for managing all revenue streams. “When I took over, I wanted to join both databases together into one database,” he recalls. “I said, ‘Look, the value of a dollar is the value of a dollar.’ So now, we can create all the assumptions we want on the profitability of these revenue streams.”
Benvenuti says he dedicated his company to a “more cultural effort” to view data from all revenue streams. “We looked at the true enterprise lifetime profitability of each customer that we had in the database, regardless of whether they were on the casino side or on the non-casino side.”
Luke Pfeifer, director of product management for Agilysys, another hospitality solutions provider that works with the casino industry, followed a similar path from hospitality to gaming. Pfeifer says he joined Agilysys after using the supplier’s software suite during his years in hotel and resort management.
He says he was drawn to gaming because casino resorts face similar problems in managing data to what he experienced in resorts. “What I just found fascinating was how the non-gaming spend at casino resorts was becoming more of an important focal point,” he says. “I knew that would be something in which Agilysys would help lead the charge, working with products I already knew, working in an industry I already knew, but also being able to touch the casino market and casino industry.”
“The industry has recognized that a dollar in the bank is a dollar in the bank regardless of where on property it was spent,” agrees Dan Skodol, vice president of revenue analytics for the Rainmaker Group, another firm providing revenue management solutions to the casino resort industry. “As revenue from non-gaming attractions overtakes that of gaming, the concept of total guest value is more important than ever.
“Without a complete view of customer worth, important marketing and hotel yielding decisions quickly become suboptimal.”
Finding the Right Offers
Solutions providers in revenue management all have one overriding principle: know your customer.
Duetto GameChanger suite
For Duetto, it’s through the GameChanger suite, with tools like the Find My Rate app, which draws on prior customer spend data to determine a rate that is right for the customer and the resort.
Casinos can leverage Duetto’s solutions to forecast demand for each of their segments and yield group and transient rooms at the right price with the right comp criteria and reinvestment rates.
Duetto’s GameChanger suite is a modern and finely tuned version of the type of combined system Benvenuti created at Wynn. “Back then, we created what they called Wynn Private Access, a kind of secret gear to the loyalty program where you are flagged and considered a VIP,” he recalls. “You have a special number from the moment you make the reservation—a special concierge, special access to clubs, etc. It was possible because of the data they have.
“Many people who are part of this program today are not big gamblers. They are big spenders, but they are not big gamblers.”
Benvenuti says he used what he learned at Wynn to start Duetto in 2012, and it was his “great luck” that cloud technology happened to be advancing rapidly at the same time. “A platform that is scalable doesn’t need to be the repository of all the data, but it needs to connect all the data in a fast, reliable, scalable, useable manner,” he explains. “The fact cloud technology made a lot of advancement in the past 10 years was the perfect storm. What we pay for storage now is a fraction of what you would pay for storage 20 years ago, but also, everything becomes scalable and succeeds because you’re able to use services like Amazon Web Services, which takes care of a lot of headache that previously, an IT department would need to struggle to take care of.
“We build on the Amazon Web Services, and from the beginning, our own goal has been to connect, piece by piece, with every source system. We started with hotel systems, and then we went into paper management, and CRM systems, the hotel reservation system, and external data sources, to become really this backbone of a platform that can massage the data and serve the data to applications, whether they’re our application or applications from a third party, in a scalable, reliable, easy manner, that can be then consumed for final decision.”
Benvenuti says advances like this have changed the face of casino resort marketing.
“If you look at casinos, direct marketing has always been what I call an asynchronous process,” he says. “You have meetings with all the different departments and say, ‘OK, we’re going to do this offer. These players are going to get a free room, those are going to get a rate of X, those a rate of Y.’ Then, you print and mail or, for the ones that are more advanced, send an email. The customer receives a very static offer.”
Duetto’s technology allows the offer to be modified over time—the first email offering a $55 rate, for instance, can be followed up if not taken by a second message offering $45, or if conditions with room inventories change, a second follow-up offering a free room.
“When they use our technology, direct marketing changes, culturally, because now you can dynamically deal those offers,” Benvenuti says.
He adds that the technology also is effective for non-gaming customers seeking a vacation in a gaming resort. A significant percentage of Las Vegas visitors find room rates through online travel agents (OTAs) such as Expedia or Hotels.com, he notes. “That is a lot of money that the casinos have to pay the OTAs, because they pay a very high commission. And the reason is they usually don’t have technology to immediately recognize the customer if they come to the website, especially the non-gamers, and give them special rate to undercut the OTAs and have them book right away.”
Benvenuti notes that Duetto client Affinity Gaming is using the system to do just that. “You can go to the Affinity website and sign up for the loyalty program online right away, and just by virtue of signing up for the loyalty program, even if you never stayed at one of their properties before, you can get a rate immediately that will actually be better than what you will find on Expedia.”
Holistic Approach
Agilysys Infogenesis
For Agilysys, revenue management comes via the rGuest Analyze suite, which draws data using applications LMS and InfoGenesis to provide customizable dashboards to aid in marketing decisions.
Agilysys also has tools to add efficiency to restaurant management—rGuest Seat provides reservation, table management and wait-list management; rGuest Pay Gateway provides secure payment transaction processing.
“rGuest Analyze is our analytic system that brings together the cross-property and cross-revenue-center information, to be able to give a holistic picture of the guest,” says Pfeifer. “We also have partners that provide similar value in bringing it all together in a dashboard, then turning that back into offers that are very targeted to the guests.”
Pfeifer says a revenue manager from the non-gaming side who is looking at the guest holistically will be able to pinpoint ways to increase spend across the resort. But it’s not only used to capture the “highest guest wallet share,” he adds. In addition to benefiting the hotel, the guest receives targeted offers—value for the activities the data shows he or she loves.
“There are two aspects to this,” Pfeifer says. “The first one is a concentration on targeted up-sells: I’m checking in and have the option to have a suite for an extra $40 a night. That suite is perishable inventory that I wasn’t going to sell anyway; it was going to sit empty. Now, I’ve got another $40 out of it; I had a revenue uplift for the property by capturing that up-sell.
“And the guest is now thinking, ‘Wow—I just got a suite for an extra 40 bucks. What a great experience!’ If you hit the right target and the right price point on the up-sells, you are not only getting the revenue uplift; you have the improved experience for the guest—They’ll see it as a ‘wow’ experience.”
Pfeifer says the Agilysys suite communicates with the casino management system to bring gaming data into the mix that completes the holistic customer profile. “We do integrations with the major casino management systems, where we will provide non-gaming spend information,” he says. “So, all of that non-gaming spend information—room, spa, point-of-sale, etc.—can actually be made part of the patron’s profile.
“And there are now many gaming establishments that are actually having players earn points off that spend. As opposed to just earning value off your spend on the gaming side, the industry is really starting to recognize that there is actually a lot of value around this non-gaming spend, and that we should be recognizing those patrons that may spend very heavily on the non-gaming side.”
Optimizing Room Rates
For Rainmaker Group, data aids pricing in tools such as GuestREV, which instantly optimizes room rates according to a guest’s historical spend across a property.
GuestREV Mobile enables instant, anywhere-anytime access to full interaction with pricing functions and reports in real time via smartphone or tablet.
Rainmaker also offers GroupREV, a stand-alone pricing software solution designed to apply the same past data for group pricing.
“Rainmaker has long been positioned to capture spend data from multiple sources and apply the appropriate margins on different revenue streams,” says Skodol, “with a particular focus on ensuring that the most profitable guests have access to scarce hotel inventory at any given time.
“The most common method for collecting non-gaming revenue is through folio charges in the PMS. Recognizing that not every guest elects to charge items back to their rooms, we have the means to capture non-gaming data from various other repositories on the hotel side, including loyalty databases. Once we pull data over into our systems, we combine all available gaming and non-gaming spend data to assess overall customer worth. We then apply a segmentation scheme that helps operators easily understand the value of a customer relative to others, and recommend what types of rates, offers and/or comps to extend to each segment at any given time.
“Customer loyalty is driven by ensuring that a property’s most valuable guests always have access to rooms. Even a less valuable guest will not be systematically shut out from rooms, as the system dynamically yields availability and will grant that guest access to a room at appropriate times.”
The boom in non-gaming amenities in the casino industry shows no signs of slowing down, even in regional casinos, which means the value of effective technology to capture and use the mountain of data will only grow.
“The amount of effort they’re putting into the non-gaming side is pretty astonishing,” says Benvenuti. “The things they’re doing to start capturing the non-gaming dollars is quite impressive.”
“The emergence of new regional gaming markets has made gaming ubiquitous, but even more of a commodity than it has been in the past,” notes Skodol. “I believe that where intra- and inter-market competition is most fierce is where non-gaming will continue to develop as a means of differentiation, for both properties and markets as a whole.”
He adds that having the complete picture of each guest’s preferences will increase the effectiveness of personalized service. “Understanding spending patterns unlocks the potential for
personalizing future experiences for the guest, which further enhances guest loyalty and can help drive more direct bookings for the hotel,” Skodol says.
“I do think that the old notion of ‘if you build it, they will come’ is dead. Operators that understand how to best leverage product, technology, data and people in concert with one another will prove to be the most successful.”
