Business Management Executive Q&A
Aug 11, 2008
The volatile U.S. economy has taken its toll on casinos, which are now experiencing something of a slowdown. However, casino operators are ready to weather the downturn with strategies and technology to maximize revenue from each guest. CPN associate editor Amanda Marsh discussed the state of the market and this technology use with Bruce Barfield (pictured), president & principal of The Rainmaker Group, which produces a profit optimization software--dubbed revolution Product Suite--that helps operators make decisions on room rates and allocation based on forecasting algorithms and customers’ spending and gaming histories.
CPN: What is the current state of the casino market? Why is it softening?
Barfield: What we see is a result of customers not having as much disposable cash as they once had. Gas prices have affected driving traffic to Las Vegas, which is also experiencing reduced air capacity. Atlantic City has been also suffering from gas prices, as well as new competition from Pennsylvania and the smoking ban. Customers are reducing the durations of their stays.
CPN: What makes this downturn different than others?
Barfield: In the 1980s, casinos had 60 percent gaming customers and 40 percent cash customers (those who may or may not play, but are spending money in restaurants or spas, for instance). Currently, it’s flipped--there are 41 percent gaming customers and 59 percent cash customers. The gamers are still coming, but the cash business is suffering. People are spending the money they once had on food, gas and transportation, causing them to have less money on hand (for entertainment).
CPN: What are casinos doing to attract more valuable guests?
Barfield: They’re marketing to each customer segment, and looking at cash versus casino customers.
CPN: Are more casinos looking towards technology to help with this?
Barfield: Absolutely. Technology gives insight into the future. Not having a forecast is like flying a space shuttle with a compass. They want to know who they should save rooms for, who they are marketing to. Are you saying “no” to the wrong customers? You can find out these answers using data mining technology. You can separate them by (gender), by customer type, or distinguish between the player who’s been compensated a hotel room and will be spending $300 on the gaming floor versus the customer who will be spending $199 on the hotel room, $200 at the restaurants and $150 at the spa. You can save inventory on peak hotel nights, and balance which customers will take (those rooms).
The volatile U.S. economy has taken its toll on casinos, which are now experiencing something of a slowdown. However, casino operators are ready to weather the downturn with strategies and technology to maximize revenue from each guest. CPN associate editor Amanda Marsh discussed the state of the market and this technology use with Bruce Barfield (pictured), president & principal of The Rainmaker Group, which produces a profit optimization software--dubbed revolution Product Suite--that helps operators make decisions on room rates and allocation based on forecasting algorithms and customers’ spending and gaming histories.CPN: What is the current state of the casino market? Why is it softening?
Barfield: What we see is a result of customers not having as much disposable cash as they once had. Gas prices have affected driving traffic to Las Vegas, which is also experiencing reduced air capacity. Atlantic City has been also suffering from gas prices, as well as new competition from Pennsylvania and the smoking ban. Customers are reducing the durations of their stays.
CPN: What makes this downturn different than others?
Barfield: In the 1980s, casinos had 60 percent gaming customers and 40 percent cash customers (those who may or may not play, but are spending money in restaurants or spas, for instance). Currently, it’s flipped--there are 41 percent gaming customers and 59 percent cash customers. The gamers are still coming, but the cash business is suffering. People are spending the money they once had on food, gas and transportation, causing them to have less money on hand (for entertainment).
CPN: What are casinos doing to attract more valuable guests?
Barfield: They’re marketing to each customer segment, and looking at cash versus casino customers.
CPN: Are more casinos looking towards technology to help with this?
Barfield: Absolutely. Technology gives insight into the future. Not having a forecast is like flying a space shuttle with a compass. They want to know who they should save rooms for, who they are marketing to. Are you saying “no” to the wrong customers? You can find out these answers using data mining technology. You can separate them by (gender), by customer type, or distinguish between the player who’s been compensated a hotel room and will be spending $300 on the gaming floor versus the customer who will be spending $199 on the hotel room, $200 at the restaurants and $150 at the spa. You can save inventory on peak hotel nights, and balance which customers will take (those rooms).
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