REVENUE A DIFFERENT GAME FOR CASINO PROPERTIES
While room sales drive revenue for most of the hotel industry, a guest's value on the gaming floor is the real payoff at casino properties. That does not mean that casino hotels let room-related revenue take a back seat. If they did, they would miss a huge opportunity, says Lyra Beck, corporate director of Hotel Yield and Teleservices for Boyd Gaming.
“At a casino hotel, the hotel room is an amenity; it is not the reason guests are on property,” says Beck. “A casino hotel is the place where gamers rest when they are not playing.” Beck should know; she has been working on the hotel side of the gaming industry since she graduated from college at University of Nevada Las Vegas. “In the 1980s, a casino hotel's revenue potential was not given a second thought,” she says. “But that has changed. Today we use cutting-edge revenue management systems and an experienced team to maximize property profitability.”
What transformed the casino hotel industry's view of room-related revenue was Steve Wynn. “Wynn had a vision of the hotel as a centerpiece offering a world-class spa, five-star restaurants and spectacular entertainment,” Beck explains. “The hotel is still an amenity, but now it is a huge amenity that supports itself.”
To transform casino properties from loss leaders to profit centers, Boyd Gaming conducts weekly rate-setting meetings where managers implement strategies that put the right guest in the right room at the right price. High rollers still get the VIP treatment when it comes to rates, while stay-no-play ‘retail customers’ are charged amounts calculated to maximize their value to the property.
Boyd and other companies use computer analysis for gamers to ensure that the right person gets the right rate offer by using individual player ID numbers. Non-gamers receive a different rate designation. “At Boyd, we conduct frequent sessions where department heads discuss property demand and set room rates,” Beck says. “We use a revenue management system from The Rainmaker Group that factors in each guest's forecasted gaming value while analyzing other influences, like demand and citywide events, to recommend optimized rates for each guest segment.”
The combination of Boyd's strategy sessions and revenue management technology has helped the company reduce comp expenses 35 percent and raise cash revenue four percent. Boyd also works diligently to retain the loyalty of non-gaming retail guests by educating reservation staff on how to introduce the new rate programs gently.
The most important part of implementing a new rate policy is training — for both staff and guests. “Most of our reservations are by phone,” says Beck. “I wrote scripts for our teleservices agents specifically to make the new rates easier for long-time guests to understand. We explain the policy change politely, answer any questions, and then provide room and rate options.” Beck also monitors her room sales throughout the day to revise rates according to pickup and demand.
“Revenue management is a way of doing business, not a computer system,” she says. “And while casino hotels still focus on the dollars spent on the gaming floor, sophisticated tools help us boost revenue in an area previously considered an afterthought — the hotel room.”
Lyra Beck is Boyd Gaming's corporate director of Hotel Yield and Teleservices. She may be reached by calling 702-696-1197 or by e-mail at email@example.com.
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