1. Customers are spending less but coming more frequently
Copen: Most gaming markets have experienced growth. People are either gaming more, or there are more gamers, or the gamers are coming more frequently. In reality, it’s a combination of those three things. Occupancy has increased despite oncoming supply in many markets.
We often see customers coming at a higher frequency but with perhaps a lesser value. As casinos expand regionally, you have more $200 customers that make a handful of trips per year.
2. Casinos face more competition for share of wallet
Copen: Casinos are definitely competing more for the shared wallet. Until recently, you shared a guest’s discretionary income between 3-4 competitors.
Now the shared-wallet effect is regionalized. Now you’re sharing it with Oklahoma, Cleveland and other regional properties. And because there are more operators, you’re often not getting the revenue across the same company, either.
3. Give guests more rewards that actually matter
Copen: Although we often in this space suggest many casinos are over-comping and undermining the value of their guestrooms, we also suggest more of your guests should qualify for a loyalty rate of some sort. Coordinate more reward discounts with a strategy to increase your public cash rate. More gratified and loyal guests will do wonders for your brand.
Also continue to reinvest based on more than your guests’ gaming worth.
Over the long term, we need to figure out rewards that actually matter. It’s very unclear how to earn comps in a dynamic rate environment where a guest might qualify for a comp in a low-demand date or very far out in the booking window, but not in a high-demand period. These messages need to be clearly displayed in your marketing, and customers will begin planning more effectively and eventually there will a better structure.
4. Your 80-20 rule might look more like 90-10
Copen: The gaming industry has customers that contribute far more of their budgeted discretionary income than, say, for restaurants. Even in restaurants, they’re taking fewer seats but ordering better-quality food and higher-priced menu options.
The mix of customers that spend more is shrinking, but the one’s spending more are significantly spending more. Cater to these people intelligently. Don’t just throw things at them; find out what they really want. For example, in a locals market, don’t offer a hotel room if the guest has never stayed in the hotel. High rollers can get a steak dinner and a free room anywhere. Maybe you have certain rules, like they get paid 3-2 on blackjack rather 6-5.
5. Social gaming could be your difference maker
Copen: Pretty much everyone is bringing a phone into your casino, so instead of making them put it away, encourage them to wager with it. Younger generations enjoy social gaming, so evolve your gaming floor to make it more social.
For example, the Wynn Players Club at Encore is a 10,000-square-foot lounge with reserved booths and tables, and you can play on Steve Wynn’s personal pool and shuffleboard tables. There are a few table games, but it’s more of a group hangout area where your wife and her friends can get bottle service and you can play shuffleboard and blackjack, and you can all bet on sports at the booth on digital tables.
They’ve created an environment to attract a different type of gamer, to help them transition into the routine gaming tables on a more social level.