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Above & Beyond

A strategic and tactical snapshot of four F&B operations that managed to thrive during tough economic times

Above & Beyond

Food and beverage offerings continue to rank among the most featured amenity draws at today’s casino resorts, although the strategic and tactical approach to operations can vary significantly based on the location, size and diversity of product.

Through Innovation Food & Beverage, we have worked extensively with stand-alone brands, regional operators, large-scale resorts and multi-unit restaurant concepts throughout the world. We sat down with some of the industry’s F&B elite, including Mark Birtha, president of Arizona’s Sol Casinos; Tom Recine, vice president of food and beverage at the Tropicana Las Vegas; Louis Abin, owner of Las Vegas’ Tao Group; and Lisa Severn, director of food and beverage from Tulalip Resort Casino in Washington, to elicit their knowledge, expertise, reasoning and advice regarding the state of the industry, both during the recent economic downturn and moving into the future.

The panel’s feedback provides valuable insight regarding lessons learned about how to thrive in a downturn, as well as how to move forward as spending and growth re-emerge. Their input is summarized in a two-part series, with the forward-looking segment to be featured in next month’s issue of Global Gaming Business.

It All Starts With A Strategy

It was apparent from the discussion that a broad range of financial, operational and customer-service-based improvements were utilized during the economic downturn to stay a step ahead of the competition.

According to Birtha, the regionally minded Casino Del Sol property benefitted from a resilient marketplace throughout the past few years, but the management team still prioritized improvements to its strategic planning and marketing approach.

“We created a plan that focused on improving operations and assessing our competitive set,” Birtha says. “Two key improvements were re-costing of our menus and evaluating shell spaces in the facility to find strong operational fits.”

Tropicana Las Vegas also prioritized marketing and operational considerations, but took a unique approach to marketing by packaging and bundling its food and beverage offerings.

“One of our most successful roll-outs was the Taste of the Trop program, in which we provided guests with a debit card at check-in to be used in the food and beverage outlets on property,” says Recine. “The card provided a 20 percent discount for any of the Tropicana outlets, and since one of the key challenges for any Las Vegas operator is keeping hotel patrons on property, this strategy proved to be an extremely valuable retention tool.”

Since quality and customer service are key drivers in any successful food and beverage operation, the Tulalip Resort Casino in Washington centered its solutions toward continued improvements in these areas.

“In a time when guests prioritized value,” says Severn, “we found it important to stick with quality of product. Our identity at Tulalip is wrapped in our overall product offering, so we maintained our quality while balancing pricing so the guests perceived value as unchanged.

“We worked closely with our vendors to buy futures, if needed, and utilized their reach into the industry for additional savings, leveraging our purchasing power wherever possible. We also offered packages to our guests offering multiple services throughout the property, offering the full resort experience with rooms, spa, dining, dancing and gaming.”

 

What About The Team?

The operators surveyed also had to make critical staffing and related customer service decisions throughout the past few years to maintain and/or improve top-line and bottom-line margins.

Las Vegas’ Tao Restaurant Group made it a priority to focus on cost-cutting efforts as well as revenue generators.

“Instead of laying off a portion of our staff, my partners and I gathered our entire management team (approximately 95 people) in a room and we all agreed to take a 10 percent pay cut,” according to Abin. “We also asked everyone in our management team to give us five cost-saving ideas. We felt that the management team was closest to the issues that could be improved upon. It turns out we were able to find tons of opportunities to save money, including introducing biweekly paychecks.”

Simultaneously, Abin helped introduce “Tao Cares,” a new initiative to increase awareness of charitable opportunities. According to Abin, “Tao Cares includes everything from canned food drives to participating in the AFAN AIDS Walk and more. Time and time again, a company that cares about its local environment ends up thriving in it.”

Tulalip’s Severn continued to focus her team on the themes of quality and customer service.

“A few years ago, we implemented our ‘Culture of Hospitality,’ which is a program for our team members that sets the service standard for all,” she explains. “It applies to both the internal and external guest. Through this, we empower our team members to please the guest, get to ‘yes.’ Rather than telling our guest, ‘no,’ we find a way to get to ‘yes’ by asking ourselves, ‘How can we make this happen for our guest?’ This culture has led to success financially and built a stronger, confident team.”

Casino Del Sol also prided itself on avoiding layoffs or forced staff reductions during the slowdown.

“We did look at natural attrition flows and made staffing adjustments through that,” says Birtha. “Throughout the process, however, we made conscious efforts to show stability, and invested in our employees through customer service training and tribal employment development. We also implemented a secret shopper program to provide impactful feedback to our employees. Investing in our employees helped us achieve a higher overall return through improved customer service and retention.”

Tropicana’s Recine had to consider a broad spectrum of food service facilities at his property.

“Staffing is a bit tricky in our environment,” Recine says. “We have to be careful because too little staff negatively affects customer service and over-staffing negatively affects the bottom line. We considered each venue independently and created a strong, appropriate staffing plan accordingly.

“While I believe staffing programs are good uses of technology, it is still important for the human manager at each venue to make final decisions. Management can be enhanced through technology—not replaced.”

You Can’t Please All The People All The Time…Or Can You?

One would be hard pressed to find any casino property with only one food and beverage solution. Properties that can offer both diversity and a notable value proposition to their guests continue to find the most success. 

At Tao Asian Bistro and Nightclub in the Venetian, the restaurant seeks its greatest “hits” from three different cuisines at extremely competitive price points. The range of amenities also varies widely, as you can spend $25 per person or $250 per person for a full meal. Abin makes a point to describe the value proposition at Lavo (located in the Palazzo) that serves fairly large portions of Italian favorites at a reasonable price.

At Tropicana, which operates in a highly competitive market, the management team recognizes that they have to provide something for everyone and provide unbelievable value. And they are reaping the benefits of their approach.

“Currently we have the No. 1 steakhouse on Trip Advisor,” Recine notes. “Our restaurants, no matter what the style, remain approachable, friendly and fun. We also make sure that every menu has items that hit its targeted entry point. For example, the steakhouse has less expensive cuts of meat, such as a hanger steak, as well as the large bone-in rib eye. We feel this allows the customer to choose to spend what they want in the restaurant, but receive an amazing experience.”

The most profitable food and beverage programs cater to their customers’ needs, in part by continuously obtaining feedback and adjusting operations accordingly. This type of ongoing commitment has been extremely successful for Birtha and the Casino Del Sol F&B team.

“Although each restaurant is independent in some regard, it is still important to consider all the outlets and venues within the program comprehensively,” Birtha explains. “At Casino Del Sol, we have gone to great lengths to ensure there aren’t any gaps in coverage, price points or service at our facility.”

Tulalip’s Severn agrees. “Almost every casino has a buffet, 24 hour café, quick serve, and possibly even fine dining. We seek out guest comments at each of our venues on property, research trends, and test new ideas on menus. We realize we cannot please everyone, the individual, but we can adapt for the masses. The overall analysis reflects what concepts work and which ones need revisions. Most concepts need major revisions after five to seven years to stay current and fresh.”

Making F&B Easier, Harder Or Just Different

Our operators all agreed that tools such as social media are critical to establish and maintain relationships with guests, as well as to offer similar commentary on the level of time, energy and expense that such applications can require. 

Tao’s Abin explains how social media has made their business model more interesting: “For the restaurants we use social media to introduce daily specials and issue weekly chef blogs. We also disseminate information on promotional events in regards to DJs and up-to-the-minute information on celebrity sightings. For example, if we Tweet that a celebrity is dining in our restaurant, within an hour the bar is packed with onlookers. Social media for the club is even more effective, because it is the way that most club-goers communicate. Every employee also has his or her own Tao Group Facebook page in addition to their own personal accounts.”

Tulalip’s Severn agrees that social media is a new form of advertising that is here to stay. “We need to embrace this tool for our guests and team members as well,” she says. “Social media is certainly different, but we must adapt to it in order to reach that client base. We have hosted Media Familiarization Tours and Media Tweet-Ups for our special events to create buzz, and we have found great success at utilizing this type of progressive marketing.”

That said, Severn is quick to caution on the level of effort that a true social media strategy can require.

“It can be very time-consuming and quick-paced, so a successful operator needs to make a commitment to stay on top of it or risk alienating the customers,” she explains.  

Recine seconds the commitment that a social media strategy can take, and says Tropicana has engaged full-time, dedicated staff to address all aspects of social media interaction for the hotel, casino and food-and-beverage outlets. “This strategy has allowed us to create a strong outgoing message for food and beverage, and also maintain consistency when responding to guests’ needs and feedback,” he says.

Casino Del Sol is also on board with the social media strategy, and has worked hard to use the program to obtain feedback and make corresponding changes to its program. “Social Media is a very new space for casinos,” says Birtha, “and it is important for operators to fully understand its power and reach. Social media provides an opportunity to engage customers on a different level, but it is important to create a conversation, rather than utilizing social media to distribute comps and promotions. Additionally, if you make your casino available through social media, it is very important to have timely and attentive responses.”

Take Advantage Of The ‘Latest & Greatest’

When it comes to keeping the pulse on emerging trends, we found all of our operators to be on the leading edge of the industry in ways beyond social media. From relationship-building to special events hosting, our four venues have successfully diversified their offerings by being open to something new.

Casino Del Sol, which opened a $100 million expansion on November 11, worked tirelessly during construction to find the right local chef partners to oversee new venues.

“We have had great success bringing in a local Asian restaurateur through a joint-venture agreement, to operate our pan-Asian concept,” says Birtha. “Along with bringing his strong managerial and operational skills, we have also seen cross-marketing efforts pay off in the community.”

The Casino Del Sol property competes against other casino resort operators as well as the surrounding non-gaming resort market. As a result, Birtha and his team had to apply best practices across the board. They assessed the competition to see what was not available and used the expansion as an opportunity to implement new ideas. They looked at overall menu design and utilized it to enhance the soft experiences and create a differentiation point.

One such solution for Casino Del Sol involved the engineering of select menus to feature more appetizers to allow customers to create a shared dining experience. Birtha explains, “We noticed this trend occurring outside of our casino and brought it to our property with great success. At the end of the day, the most important aspect is to make sure the value orientation is strong in all outlets. If that is accomplished, then the business should be positioned for success.”

Based in the Pacific Northwest, Tulalip has found great success with special events coordination, allowing the venues to experiment with new menu items, varying cooking styles and ethnic cooking.

“If something was a success, we know to build on that idea and capitalize on it,” Severn says. “We also have daily, weekly, monthly specials that we run. If those items are successful, we may place them on the menus for a longer period.”

She also explains that Tulalip makes a deliberate effort to be a culinary destination. “We market our chefs and sommelier to let the public know we have a quality food-and-beverage program that adapts to whatever your need is,” she says. “Social events, corporate events, charitable events—whatever the need, we can provide quality food and beverage service. We also create our signature food and wine event—Taste of Tulalip—showcasing the talent of the culinary team and partnerships with the finest wine-makers in the industry.” 

From an entertainment perspective, the Tao Group, recognized industry-wide for its innovative nightclub offerings as well as its exceptional food, has recently observed a shift from celebrity to DJ-hosted events.

“The DJ has turned into the modern-day rock star, so we have created a production that helps to elevate the DJ’s performance,” says Abin. “Our current Marquee Nightclub production consists of a 40-foot-by-40-foot LED screen, choreographed acts, cryo effects and laser lights, all complemented by a multimillion-dollar sound and light package.”

According to Abin, the “vibe dining” aspect of the Tao venues is what makes them extremely unique. This strategy, along with a beverage program that is notably priced less than the competition, helps position the Tao properties well in the competitive Vegas market.

Tropicana, one of the top turnaround stories in Las Vegas in recent years, has achieved growth from incremental and small changes, including its “Trend Forward Menu Design.” Recine and his team have also conceptualized and implemented a number of innovative marketing promotions focused on happy hours throughout the property to further drive business.

One such solution at Tropicana was to bring in local celebrity chef Carla Pellegrino to help oversee the food-and-beverage program. Recine explains, “Carla has been instrumental in establishing a strong local market base, which is hard to do on the Strip in Las Vegas. In addition, all of our restaurants provide a relaxed atmosphere that makes our customers comfortable at any level of dining, which is sometime difficult to find in our region.”

And Speaking Of Comfort…

The four operators also shared the important appreciation for the value of design and function in their various properties.

“If the guests at Tulalip do not feel welcome and comfortable, they will not come back,” says Severn. “It is critical to balance form and function to ensure every guest is relaxed and serviced appropriately. We set the tone and feel of our restaurants based on the design and decor of the overall property, and work consistently to keep the restaurants fresh and current. It is critical to stay on top of trends and evolve the look and feel.

“After the base design concepts at Tulalip were created, the rest was all about fun. Our seafood restaurant is modeled after the tribe, and features sophisticated touches of tribal culture. Our patrons love it, and the venue has been extremely successful.”

Recine and his Tropicana team agree.

“Design is as important as having a great talent in the kitchen and strong service on the floor,” he says. “Guests have to feel like they can be comfortable in the space. The design elements set the first impression, which in any competitive market is extremely important. During the Tropicana’s redesign over the past two years, we took a lot of time on aesthetic value, while not trying to over-design any space.”

For the Tao Group, pairing restaurants and clubs in one facility provides a unique opportunity for both design and synergetic relationships.

“We are extremely sensitive in creating ambiance and décor. We like every room to create a different experience which can only be elicited by the orchestration of sound, light and textures,” says Abin.

In Tucson, a highly competitive tourism market even without the casino factor, Birtha and his team focused on three main components to achieve a standout food and beverage experience: product, employees and design.

Specific to ambiance and design, Birtha explains, “During our recent expansion, we worked with our interior designers to create unique F&B spaces in the casino that cater to different guest experiences. We have high-end design in some of our entertainment spaces and more casual, living room-style concepts in other public areas to emphasize comfort and broaden the appeal.”

Operators have taken different, but successful steps to mitigate the recessionary pressures to the food and beverage programs and outlets. Whether the casino and/or operator is working in a regional or resort environment, the lessons can be applied to help position the food and beverage program for success as spending and patronage continue to trend upward in the future.

In Part II of this article in next month’s issue of GGB, we will address questions about how these operators have positioned their programs to capitalize for the future.

Erika Meeske is the manager of research and analytics at the Innovation Group. With direct experience in the industry for over 20 years, Meeske possesses a broad perspective and a keen understanding of how business functions mesh to assure growing, profitable enterprises in the hospitality arena. She can be reached via [email protected] or 303-962-8062.

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