John Forelli, vice president of IT for The Borgata

It’s good business for a large, multi-faceted lodging property, like a casino hotel, to approach revenue management from a different point of view. That’s what The Borgata Hotel Casino & Spa does. The 2,000-room casino hotel in Atlantic City sets its rates using what it calls “total guest value-based revenue management.” In short, the hotel sets rates depending on how much total revenue a guest will spend at the property, not just what he or she pays for a room.

“It’s not just about supply and demand for our rooms,” says John Forelli, vice president of IT at the hotel. “You need to take into account all aspects of a customer’s worth to the hotel. At The Borgata, for example, we have a spa, lots of food and beverage, gaming, retail and more. You need to focus on the different dimensions of each customer and build a profile that reflects his or her spending attributes.”

The Borgata worked with revenue management systems provider Rainmaker to design a system that assigns values to those attributes and allows the hotels to customize experiences and room rates to coincide with projected spend. And while Forelli concedes gaming spend is a weighted attribute in the equation, it’s not necessarily the number-one criteria.

The Borgata is a 2,000-room casino hotel & spa in Atlantic City.

The goal of the system is to give the hotel’s reservation agents seamless tools to quote the correct rate for guests in particular customer segments. The same function is in place if a guest books a stay on the hotel’s website. “Rainmaker crunches the numbers and returns to us a highly segmented set of recommended rates based on traditional factors, like the dates of the reservation and how far out it is in the booking window, but also the tendencies of the particular customer pool the guest is part of,” he says.

Forelli stresses while the system works hand-in-glove with the property’s PMS and reservations systems to recommend rates, members of The Borgata revenue management team oversee and review the system recommendations. In practice, however, the team mostly sets rate minimums and maximums and otherwise allows the system to do its work.

The system has been in place since early 2010, and while Forelli isn’t specific on the results, he says it has been able “to move the revenue needle for us.” He adds that the approach The Borgata takes is applicable to non-casino properties, as long as the hotel has an array of amenities and facilities.