In the Covid-19 era and beyond, analytics will play an even more important role in gaming operations.
Casinos are pondering phased reopenings in an adjusted consumer landscape. Gone are instant room-rate and comp decisions made from number-crunched data. Peak-rate forecasts and dynamic pricing, which helped to maximize non-gaming spend in recent years, now are hollow buzzwords.
Analytics will play an important but different role in the near term. The information will inform judgment calls, not replace them. From the data, operators will drill down and decide which customers can be counted on, what flexibility can be offered to big players who suffered income interruptions, and whether smaller, more frequent customers should be moved up the rewards chain.
They may even redefine premier players and try to anticipate future spending choices from customers.
This is an important shift in the operator-analytics relationship. Human beings, assisted by data, will deliver the difference-making personal touch in a nervous gaming industry.
The New Paradigm
Cendyn is a cloud-based software and services provider that develops integrated technology platforms to drive sales, manage revenue and chart marketing performance in the travel and hospitality industry. Somewhere in the cloud lie answers to help operators shift their focus.
“The timing of analytics may never be more significant than now,” according to Dan Skodol, vice president of data science and analytics for Cendyn. “Properties must evaluate where they are relative to competitors and their own projections regarding their phased reopenings.
“You have to know how your business has changed. Where are you from a revenue management and marketing perspective? What changes do you need to make in your comps? Are you looking at a different set of hotel guests than before? How do you compare with your competition? Software is going to help you with that.”
Regardless of the industry climate, Cendyn has been retooling for several months. In August 2019, the company expanded its gaming footprint by acquiring Rainmaker. Skodol, a Rainmaker veteran, considers it an ideal partnership.
“Rainmaker was a natural fit for Cendyn, as revenue management complemented our existing suite of marketing and sales software products in the hospitality space, for casinos and non-casino hotels alike,” he says.
“It helped expand our reach and our customer base to include more casino hotels, where the application of both CRM and revenue management is so critical to success.”
Annexing Rainmaker helped Cendyn build richer guest profiles that utilize integrated data points across hotel systems, including gaming. That gives hotel casinos a superpower: the ability to truly know their most valuable guests, he adds.
“Important relationships emerge from seemingly unrelated data,” he says. “They help hotels understand the distinct steps of the gaming guest journey, so they can capture them with the right message at the right time. Through deep dives in things like association-mining with gaming purchases, we can further personalize hotel offers by learning what purchases are linked to one another.”
Skodol expects a powerful synergy between the companies.
“Rainmaker has the ability to optimize on eight other revenue/profit streams aside from room revenue,” he says. “This obviously includes gaming revenue but can also look at F&B, spa and other ancillary sources. Cendyn’s CRM can provide a more complete picture of total guest worth, leading to a more effective optimization of total hotel profit.”
Rainmaker products from Cendyn’s revenue cloud complement its marketing and sales clouds. The revenue area includes important Rainmaker products like guestrev and grouprev.
“These absolutely work in tandem with each other in a way that no other RM systems do,” Skodol says. “We recently launched a group forecast feature that works to the benefit of both products. The products consider the projected group and transient demand together for future dates and identify the optimal group/transient mix.
“Guestrev then removes the projected group block from the capacity available to transient and yields the forecasted transient demand within this new constraint. Additionally, grouprev will use the forecast to take into account the possibility of groups displacing other groups in its pricing recommendations, which is something that’s not accomplished by any traditional transient displacement model.”
With Rainmaker, in the revenue-cloud realm, the operator would have a complete automated revenue management software solution to optimize total profits for the hotel. The property provides Cendyn with an ongoing feed of its booking data and the ancillary customer values associated with each room. Cendyn forecasts the property’s demand, then runs a sophisticated mathematical optimization to identify which specific segments to “accept” into the hotel and which to “reject.”
On the group-business side, Cendyn’s solution empowers sales teams to book group business at optimal rates, allowing for quick responses and the highest likelihood of closing group business.
“Cendyn’s CRM and ‘marketing cloud’ products are a valuable complement to any casino wanting to bolster their CRM efforts, allowing casino hotels a single source of truth for all types of customer activity beyond simply gaming spend, where most casinos seem to focus, automating targeted marketing communications, and facilitating personalized front-line staff interactions,” says Skodol.
“The ‘demand creation’ aspect of the business tackled by the marketing cloud works in tandem with the ‘demand management’ aspect of the revenue cloud. Some metrics hoteliers would use to track success inside our solutions would be things like occupancy rates, revPAR, ADR, gaming revenue per room, loyalty rates, booking pace, database churn, new-versus-returning guests and conversion rates.”
This product feature will gain more traction when business improves.
The Agile Analyst
This extraordinary era has made hotels, casinos and stadiums eerily quiet. But operators who gain an early, analytics-driven feel for the new environment will be the first to prosper in it.
Ravi Acharya, director of engineering at Agilysys, identified a string of short-term necessities from operators.
“We’re hearing from hotel and casino operators who are specifically looking for a few data sets right now as they plan for reopening after Covid-19-related closures,” he says. “We consistently hear about product mix reports, which have been in use for a while, but recently there’s an upsurge as casinos are planning what their ‘new normal’ might entail.
“They’re using product mix reports to identify how patron purchasing behaviors are changing. They want to know the latest F&B purchasing trends, and what are the possible drivers.
“Are the changes due to the evolving demographics or due to buyers’ perceptions that certain menu items require less staff handing, and are therefore safer? They’re even looking at how the post-Covid world may shift toward preferences for healthier items, such as salads or smaller portions. The product mix report is ideal for menu optimization and allows the business to evolve as F&B purchasing trends change.”
Analytics are also used to determine how many menu items were sold and if they were tendered using comp or non-comp forms of payment. Knowing how patrons pay for their F&B purchases—and specifically, how many are leveraging their loyalty rewards—gives operators valuable insights into their businesses, Acharya says. Data shows everything, from the potential abuse of loyalty accounts to inventory levels for the most popular (or least popular) menu items, all of which help operators manage their profit margins.
And here’s some food for thought: the weather.
“Analytics using the weather is yet another unique data set we see being used to plan menus, where the local weather forecast helps chefs plan their F&B promotions for the coming week,” Acharya says. “The integration of third-party weather APIs with our analytics software also allows operators to understand any potential outliers that may be skewing their data.
“In one instance, weather data revealed that during a cold and rainy week, soup sales were much higher during what would typically sell during the warm summer. In this particular instance, the outlet used future weather data to ensure they would meet demand by ordering more soup from their vendor rather than having to potentially turn away patrons who were wanting the comfort of warm soup on a rainy day.”
For more than 40 years, Agilysys has been a leader in hospitality software for hotels, casinos, resorts, food-service providers, stadiums and arenas. Acharya says analytics technology deployed by the company makes the difference for hotels and casinos.
“Agilysys’ rGuest Analyze is strategically different from other analytics tools in that it is extensive enough to bring in data from across all property outlets, including multi-property enterprises,” he says. “Lodging, F&B and even some casino IDs are combined to present a holistic view of patron and business information, with the ability to segment down to the smallest profit center or data point. We’ve made it accessible in an easy-to-understand graphical representation of the operator’s selected data.
“Unique to rGuest Analyze is that it has two flavors—a SaaS (software as a service) solution for analytics with rich visualization and data exploration capabilities,” he asserts, “and there is also DaaS (data as a service), a method that delivers raw data to be ingested into an existing customer data warehouse for further analysis with other products.”
For those who prefer the SaaS-based visualization portal, simple, intuitive slicing and dicing reveals business performance insights as the data is collected and analyzed, he says. This provides a browser-based snapshot of the requested data in an easily digestible dashboard. DaaS users, on the other hand, are most often large resorts that prefer on-demand access to their data feeds. Agilysys has built an API that enables SFTP uploads so those operators can leverage the data how and when they wish.
Acharya says the company’s analytics software also lets managers look into folios to assess patron spend by room, combining retail, restaurants, entertainment, in-room dining, spa and other resort activities. Any category that hits the patron’s folio is used to evaluate the total spend, as well as the many different ways operators like to dig into their data.
Another innovation is working its way through the company pipeline.
“We have an upcoming mobile release, based on requests from our resort partners, to help make their jobs easier,” he says. “Restaurant managers, for example, can see their revenue, tips, server performances and other stats while off-property, when they’re roaming the floor or on the move in situations where they’re managing multiple on-property outlets. It’s not an app, either, and so the responsive design can be rendered on any tablet or mobile device with a web browser.”
Innovation Analytics is the data analysis arm of The Innovation Group, a premier provider of advisory services for the gaming and leisure industries. Data science is its answer to the convergence of bricks and mortar, digital marketing and interactive gaming—a fundamental shift in how the global gaming industry works.
The company has plunged into the post-pandemic world with a gaming industry white paper, “Coronavirus Recovery Analysis.” It’s a preliminary look at potential recovery patterns of the gaming industry.
The analysis applies a range of demand recovery scenarios based on:
- The level of decline in the economy measured as employment and income and in perceived customer security, based primarily on performance immediately preceding closures;
- The ramp-up of economic recovery; and,
- The ramp-up of consumer acceptance for spending and use of public spaces.
Supply factors include the impact of social distancing and potential changes in the competitive landscape. Constraint sensitivities to reflect the impact of social distancing are based on a continuum of thresholds linked to daily win-per-unit. Win-per-unit above $500 reflects extreme constraint; below $150 reflects minimal constraint.
Findings indicate that the rate of revenue recovery by the end of the first year following reopening would be lower than demand potential as long as social distancing measures are in effect.
A casino with extremely high utilization pre-virus would reach pre-virus levels of only 33 percent, while a casino with minimal utilization would reach 73 percent, or an additional drop of approximately 10 percentage points off the demand potential.
These estimates are based on closing three of every five gaming positions. If wider spacing is required, the recovery would naturally be lower, or vice versa.
The report, like other analytics tools from market leaders, unveils the near-term interests—and unprecedented challenges—facing the industry.