When gaming revenues decline or stay flat for years on end, the hopes for growth and expansion of casino resorts follow the same path. For some, the only way to find new revenues is to capitalize on businesses that attract customers for whom gaming is secondary.
Non-gaming amenities have long been a part of the casino industry. From restaurants to entertainers and spas to hotel rooms, the gaming industry has always used the non-gaming elements of casino resorts as simply amenities to attract the casino player. But with more than 60 percent of casino revenue on the Las Vegas Strip coming from non-gaming amenities, can that be duplicated by non-Strip properties? That was the subject of the RD&E Experience, a conference held May 30 and 31 at M Resort in Las Vegas.
The issue was crystalized by a panel of marketing experts at the end of the first day. Gaming marketing guru Mike Meczka squared off against Randy Fine of the Fine Point Group, one of the developers of Caesars’ Total Rewards program, which seeks to gauge and reward spending of all sorts under the aegis of a casino resort.
Meczka declared right off that he is not in favor of promoting non-gaming amenities at a casino resort off the Las Vegas Strip.
“I have advised my clients that it is counter-productive,” he said.
Meczka claims that a casino can utilize non-gaming amenities to attract more gaming customers to their properties, and that any revenue garnered from them on the casino floor will surely be greater than sales of non-gaming elements would be.
To illustrate his point, he produced a slide that showed a casino can gain as much as 80 percent profit from the casino floor, while the best they can hope for from any of the non-gaming amenities would be a 15 percent profit at the restaurants. All the other amenities come in at under 10 percent profit, and Meczka says entertainment actually costs a casino 25 percent of its ticket sales.
While Fine agreed in many cases a casino is better off comping a good casino player than selling a product to a non-gaming customer, particularly in non-Las Vegas Strip properties, he said it’s a way to produce new revenue and to diversify the revenue stream of any casino resort.
While those fireworks weren’t always the case, there was healthy debate throughout the conference.
The first two sessions laid the groundwork for the discussions. Mark Birtha, whose Casino del Sol has just opened a small hotel, spa, pool and new restaurants, moderated a panel that outlined the benefits of non-gaming amenities. John Palinkas, vice president for the Pechanga Development Corporation, outlined how his tribe has developed extensive non-gaming amenities but also how it is aimed at their core customers of Chinese and Vietnamese gamblers. Jason Gastwirth, senior vice president of entertainment for Caesars Entertainment, explained how his company is using all types of performers to draw new and younger customers to properties across the country.
At the second panel, “What Happens in Vegas: Can Happen Anywhere,” Dave Pena, president of Boogie Nights Nightclubs, described how his company has developed a nightclub and gambling concept that appeals to the baby-boomers, the prime demographic of gamblers. Peter Wagg, a former executive with Cirque de Soliel and Dragonne, now owner of consulting group My Hole in One, explained how entertainment can appeal to a wide range of customers and drive revenue. And Jeff Frederick, a Las Vegas VP of food and beverage for Caesars Entertainment, outlined how new restaurants can be a net positive for revenue.
A keynote lunch on the first day featured a collection of up-and-coming chefs, as well as restaurant operators who described the benefits—and challenges—of operating new and improved food-and-beverage options at casino resorts. Chef Geno Bernardo of NOVE Italiano, at the Palms in Las Vegas, broke down operations, while Edmund Wong, executive chef who oversees all culinary operations at the Bellagio, explained how customers always drive his decisions. Moderator Mark Van Hartesvelt, a founding partner of GCommerce, coaxed interesting stories from rising star Megan Romano and Kelley Jones, a partner in Trust3 Hospitality.
Afternoon speakers included former Wal-Mart CEO Bill Fields; Ana Maria Mormonado, senior vice president of F&B at Bellagio; Buck Mathias, western region director of operations at China Grill Management; Tom Rooney, president of the Rooney Sports & Entertainment Group; David A. Shea III, owner and CEO of Shea Architects; Michael Mangini, design director for SOSH Architects; Brett Ewing, partner with Thalden Boyd Emery, and others.
“RD&E in Indian Country: Driving More Business” presented the viewpoint from the tribal side and how it differs. Moderator Dr. Kate Spilde, associate professor, school of hospitality and tourism management at San Diego State University, solicited opinions from Jay Chesterson, vice president of operations and F&B at California’s Fantasy Springs Casino Resort, and Wendell Long, president of Arizona’s Pasqua Yaqui Gaming Enterprises. Ivan Makil, former chairman of the Salt River Pima tribe and now head of Generation 7, gave a detailed look into tribal politics and economics.
The second day started with a technology panel, designed to examine how to identify and reward your non-gaming players. Roy Student, president of Applied Management Strategies, gathered an expert panel that included Claudia Winkler, president, GHI Solutions; Josh Swissman, corporate vice president of marketing for MGM Resorts; Craig Zeigler, president of SuiteLinq; and Tom Soukup, vice president of R&D for Konami Systems.
A keynote luncheon featured Penn National Gaming President and COO Tim Wilmott, just two days after the debut of his company’s Hollywood Casino in Toledo, Ohio. Wilmott gave an overview of the growth potential for the company and explained its RD&E strategies.
Day two was packed with influential speakers including John Restrepo, principal, RCG Economics; Heidi Rinella, the food critic for the Las Vegas Review Journal; Kwang C. An, a Tucson restaurateur; and Corey Nyman, vice president of operations for the Nyman Group, which develops and manages restaurants. Clinton Billups, president of CFB Productions, moderated an entertainment panel that included Lance Schultz, president of Themed Entertainment, and Anton Pfisterer, the entertainment director at Laughlin’s Aquarius Casino Resort.
Other speakers on the second day included Lisa Tenner, president, Tenner and Associates, Inc.; Jenna Trabulus, director of business development for IGN Sports; Dennis Khanh, vice president, food & beverage for Pechanga Resort & Casino; Marco Benvenuti, a principal with Duetto Consulting; Donald Hoover and Sebastian Font with Gaming Hospitality Experts; Tom Roberts, corporate vice president of development with Fertitta Entertainment; Max Solano, beverage director at Delmonico/Table 10; Jason Smith, director of wine and master sommelier, Bellagio; Frank Fantini, director, Fantini Research; and Jamie Freeland, managing director with Summit Partners Credit Advisors.
The RD&E Experience wrapped up with an extensive session on the role of social media in promoting non-gaming amenities, featuring Nancy Smith and Ryan Leeds of Masterminds Advertising and a focused presentation by Shawn Rorick, a digital media specialist with over 16 years of experience in development, advertising, internet marketing and tech-media advertising.