Sunday, November 11, 2007

Blog #5

Customer Value Beyond Gaming
6/1/2007
Bill Geoghegan
http://www.hospitalityupgrade.com/_magazine/magazine_Detail.asp?ID=111

One trend throughout the Las Vegas casino environment: non-gaming revenue has become a much larger part of the income of a resort. In 2003, non-gaming revenue actually surpassed gaming revenue in southern Nevada for the very first time since the numbers have been kept. This is important and has some serious implications for the gaming industry as a whole. Some casinos and resorts are beginning to see their gaming as a smaller percentage of their gross operating revenue.
Because casino and resort guests are beginning to spend more and more of their money outside of the gaming floors, new methods of information gathering are being devised to assess the value of casino players versus the non-casino players.
Some methods for doing this are as follows:

1. Ask for room key identification as part of the transaction settlement. This is the most straightforward way to go about collecting this information.

2. Another method involves granting points for purchases made throughout the resort. This method is probably the best method for capturing the information without significant cost to the resort/casino.

New methods are currently being developed to help the hospitality industry better gather the information that will tell them where their customer’s money is being spent. RFID tags on room keys are being researched as a possible technology for identifying guests spending habits. Once the data can be captured, determining the transaction’s value to the property in straightforward, but the challenge today is to find out exactly the best method in which to capture the guests’ spending pattern.

I think that it is only a matter of time before there is technology developed that will allow casinos and hotel properties to positively identify a guest's exact spending patters with ease. I think the real question is should guest’s privacy be thrown in the gutter for a few extra dollars. Many guests choose to play game anonymously and would be unhappy if their habits could be tracked easily through the properly without any say as to whether or not they care. Time will tell, but I think that money will be the deciding factor; that and technology available that will allow properties to implement and track guest's spending patterns.

7 comments:

Erin Tetreault said...

I agree that this will send privacy out the window; big brother is always watching. Traching spending habbits may be an advantage for the companies but invasive for the guest. I agree that this technology will eventually be put into place, especially in Las Vegas where the city is kept alive by people spending their disposable income.

Fahimeh said...

As the article mentioned the number of non-gaming guests is rapidly growing. So a resort casino needs to be able to attract both groups of guests in order to enhance the guest experience which in turn will help to increase revenue. For that, they have to have some certain information about their guest characteristics and habits to be able to determine their guest real value so that they can deliver better service in guest’s next stay. After all, I concur that privacy is an issue especially in such a setting that people may prefer to stay anonymous. Hopefully in the near future we will see more advanced technologies spanning these concerning issues more than ever.

cmartino said...

I was very surprised to hear that the non-gaming guests were actually bringing in more revenue then the gaming guests were. I always thought it was the other way around. Now that casinos are finding this out it is important for them to find out where these guests are spending their money. I do agree that this will be a privacy issue because guests will not want someone knowing everything that they are buying. I believe that in the future the technology will be so advanced that the guest will not even notice that they are being tracked and the casino will have a way to find out where the guests are spending the most money.

yuki said...

This article is very interesting and what surprised me is the trend that non-gaming revenue has become a larger part of the income of a resort. When we visited the Borgata Hotel in AC, most of the income was still from gaming. I agree with Jeff's point that the new trend is definitely important and will have some serious implications for the whole gaming industry. Moreover, in my opinion, RFID tags on room keys may be the best technology and method to identify the guests' spending habits and gather more informations, since it costs less money and is pretty straightforward way. I think it won't take a long time to see the new advanced technology which can solve the whole problem and help to deliver better service for the guests!

Vincent said...

This is an interesting topic. I didn’t realize that the non-gaming revenue is already surpassed gaming revenue in Las Vegas’s casino. In other words, non-casino players have become another major source of revenue. Therefore, how to use the new technology to assess the value and track the spending habits of both casino and non-casino players are a critical issue of gaming industry nowadays. As Jeff’s mentioned, room-key identification, granting points for purchases and RFID tags are some of the method to capture the guest’s spending pattern. I also agree with Jeff about the problem of depriving the guest’s privacy since their habit could be easily tracked by the property.

Drew Cantoni said...

I completely agree with what Jeff said about the article. I think privacy would be non-existent. Many gamblers will never admit that they have a problem and having all their gaming monitored would not go well with a lot of guests. Although it is a good idea, i know that only time will tell with this theory. In regards to the resorts, the hotels have to attract both types of guests; Non- gamers and gamers alike. All produce income for the hotel.

Jonny M. said...

Although it does seem like an invasion of privacy, casinos could argue that monitoring guest activity can be used in a positive way to help prevent gambling addictions. A point system combined with a V.I.P. guest card would be a fine way to both track guest activity and create brand loyalty. If you are going to intrude on the guests privacy you have to give them motivation to go along with it or there will be too many complaints. Its interesting that non-gamblers are a growing trend in the casino industry. But it is not so surprising considering places like Las Vegas supplement the gambling experience with a lot of entertainment.