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Revenue Results

Knowing your players’ preferences makes all the difference

Revenue Results

Know thy customer. It is a near-biblical gaming mantra, conceived at the base of casino operations. Properties must know their players’ drink preference, commuting distance, frequency of occupancy and the incentives realm keeping them engaged.

It’s a slippery, multibillion-dollar slope. Too many comps shrivel margins, while too few enhance one’s competitors. Stakes are magnified by the powerful new presence of merged resorts.

Revenue management systems have thus become more valuable, even priceless. Their targeted information helps hotels and casinos merge functions under the large corporate umbrella. Hotels can still segment customers as regular or business travelers, and, with the help of data, match discounts with certain nights of the week. Casinos can still delineate high-end players, low-stakes patrons, slots players and table-game players, to find a promotional sweet spot.

When their efforts come together, the property casts a wider financial net.

Revenue management systems illuminate the path. Their input helps operators streamline the comp-business structure while allowing, even enhancing, age-old eyeball intuition. A manager or host can tell a customer the system recommends “x,” but then provide a higher comp. It’s a personal decision, set up by data and executed by an individual’s instinct.

The combination is rooted in casino history. Dennis Gomes, the late gaming legend, taught his employees what he termed the “soft hustle,” blending people skills with the tools of comps and rewards. Revenue management systems give enterprising hosts more sales ammunition.

As casinos and hotels increasingly merge interests, the tools of their trade matter more.

Living the Merged Dream

Las Vegas-based Duetto helped pioneer the casino-hotel synergy.

Though it works with hoteliers and casino properties, the company began forming its revenue management ideas in the gaming industry. Two of its co-founders, CEO Patrick Bosworth and Chief Product Officer Marco Benvenuti, first worked together at Wynn and Encore in Las Vegas. That’s where Benvenuti created the Enterprise Strategy Group that brought together revenue management, data analytics and digital marketing.

They saw the need for all casino departments to work together as an integrated resort rather than wage turf wars over hotel rooms or operating budgets. The strategies Bosworth and Benvenuti developed for Wynn, like the practice of open pricing for dynamically setting room rates, still impact how Duetto helps casinos maximize revenue.

“There is a lot of actionable data available to casinos, about consumer demand as well as guests’ gambling and on-property spending, which helps calculate a more robust customer worth when you’re making reinvestment decisions,” Bosworth says. “That information needs to be centralized so that all the casino’s key people can use it—and in a very coordinated way, not just in their silos with their own strategies to hit their own compensation targets.”

Several casinos in Las Vegas and across the United States formulate revenue strategy using Duetto’s GameChanger, a cloud-based application that integrates with property management and CRM systems.

A casino’s revenue manager using the app can yield cash rates for hotel rooms based on demand for any booking date, customer segment or distribution channel. Then, when the player development and marketing teams want to reward high-value big spenders, they use the app to apply dynamic rates of reinvestment across all the segments in the loyalty club database.

The casino can thus offer an unlimited number of discounted casino rates—based on a guest’s activity and value—rather than the typical choice of transient rate, casino rate or comp.

Without relying on room blocks, casinos can fill the house profitably while still reserving inventory for the highest-value guests. This boosts the property’s top and bottom lines, the company says.

And while intuition has value, why depend entirely upon it for major decisions?

“We think the ability to get the casino, hotel and marketing teams working in lockstep toward a loyalty program built on data, not the manager or front desk’s ‘gut feeling,’ is what will set our partners up to win today and in the future,” says Rory Fagan, Duetto’s vice president of casinos.

“That’s been our goal from the start, and it’s in keeping with this wider trend toward greater personalization in the hospitality industry.”

The company continues to innovate in this area. Last year, it released ScoreBoard, a revenue intelligence tool aimed at replacing Excel as a reporting tool, according to Benvenuti. It allows casinos to compile and analyze reports to share instantly with stakeholders throughout a single casino or across an entire organization that owns several properties. In real time, casinos can frame the big picture of non-gaming revenue for the property and drill down on the performance of different customer segments. Management can then make better, data-driven decisions on the optimal mix between comp segments and its cash business, and it can quickly coordinate efforts between the revenue management and marketing departments to tailor better direct-mail offers.

Another recent development was a technology integration and global reseller agreement with Agilysys. By integrating its cloud-based application with Agilysys’ Lodging Management System and Visual One PMS, Duetto can offer casinos real-time lookup of personalized loyalty rates or a mix of comp and cash rates by room type, all from the offers screen of LMS, the company says.

The two companies combined to host a webinar, “Transform Your Casino Revenue Management to Maximize Profits.”

Agile Agilysys

The Duetto partnership is an excellent move for Agilysys, the Alpharetta, Georgia-based hospitality company that steadily grows its gaming presence. The increasingly shared functions of gaming and resorts help it give operators useful tools.

“For any hospitality business to be successful, it’s critical to have a way to predict and manage guest demand and spending patterns,” says Luke Pfeifer, director of product management for Agilysys. “Revenue management is more than just room revenue; it encompasses the full spend of the guest in all revenue centers including room revenue, dining, retail and gaming spend. Knowing the potential demand for a given sales period is determined by factors including historical trends, current events and the current pace of bookings. Equally important, operators need to anticipate how their guests will spend their money while on property. Combining all this data to drive rates and personalized offers enables hospitality operators to yield the highest return based on the full spend of guests.”

Product solutions can originate from anywhere, even the clouds. Or maybe that’s cloud.

“Casino resorts are switching to a real-time, data-driven revenue strategy, thanks to new cloud-based technology solutions,” Pfeifer says. “Properties with this ability can yield by market segment, distribution channel and room type. They’re moving away from one-size-fits-all discounts off a fixed best available rate and instead generating personalized guest offers to reward loyal members and to spur direct bookings. They’re also using web shopping regrets and denials to gauge the property’s true unconstrained demand.”

According to Pfeifer, the latest revenue management technologies allow casinos to attract the right guests via optimized forecasting, pricing and even reinvestment. With industry-leading partners, casino resort operators can align their strategies to make more profitable decisions.

Recent technologies also help operators present personalized offers aimed at the guest’s overall spend. This is made possible by systems that share real-time data like prior guest spending habits, area demand, competitor rate shopping, review scores and web shopping activity.

He notes that it wasn’t always that way.

“It used to be that casino resorts were rolling the dice in their efforts to meet guest room demand,” Pfeifer indicates. “Revenue management years ago only focused on one area of demand and guest spend: room revenue. The role of a revenue strategist has evolved greatly over the last 30 years. Today, revenue management is the priority of an entire team, and it’s a central part of operations that drive many decisions and actions in adjoining departments.

“As guests are looking to their hotels and resorts to offer more and more services, the traditional PMS is becoming increasingly limited. It’s focused on only the details associated with the guest’s hotel stay—and that’s about where it stops,” he says. “For years, this was all that was needed. It was ‘good enough’ and aligned well with where revenue management was focused: room revenue. But what about guests who don’t charge to their room, don’t partake of amenities and don’t dine on property? There’s a lot of missing detail, essential data that a traditional PMS simply doesn’t capture.”

Pfeifer says properties have a single contract and agreement for Agilysys products combined with revenue management solutions. (Agilysys offers a comprehensive software solution used to coordinate operational functions of the front office, planning and reporting, etc., in the property management realm.) These services are combined and then delivered from a single vendor. It’s a close collaboration with Agilysys and its partners to provide the tools to get properties up and running with their new capabilities, Pfeifer asserts.

Partnering with industry leaders in revenue management and optimization enables operators to work with a single vendor to achieve a holistic hospitality management system, Pfeifer adds. The combination of this technology allows operators to take the data shared between the two systems to the next level. With this new, unique set of revenue management data, businesses can offer personalized guest services.

Let Information Reign

Rainmaker, also based in Alpharetta, Georgia, aggressively updates its tools of the analytical trade. In April, it launched the next generation of revcaster, touted as an affordable, flexible solution geared to limited-service and mid-market hotels. It brings actionable insights on market, demand and property dynamics to the surface, company officials say. This data transparency provides hoteliers with the relevant information to identify opportunities and make revenue-driving pricing decisions.

“Due to a lack of time, budget or resources, many hotels don’t have the ability to make dynamic pricing decisions,” says Vicki Gideon, managing director of Bridgetown Revenue Management Solutions. “If they make them at all, they are often based on data that has been gathered and analyzed from a variety of disconnected spreadsheets, reports and systems. This time-consuming and inefficient process makes it difficult to stay on top of key market metrics and ultimately results in pricing outcomes that are less than desirable for the property.”

Rainmaker says its new revcaster platform simplifies existing processes in an intelligent and results-driven manner to provide a cost-effective alternative for hotel operators. The additions and enhancements to the revcaster rate-shopping solution are the first to be released following its acquisition by Rainmaker in 2015.

“Best Western selected revcaster as our rate-shopping provider five years ago, recognizing them at the time as a highly innovative startup with excellent customer service,” says Monte Gardiner, managing director of revenue management for Best Western Hotels and Resorts. “Their unique, extensive revenue management experience in the mid-market segment has continued to help us improve performance for members ever since.”

Key features of this product include the ability to integrate and analyze data from varying sources, such as rate-shopping, PMS, weather, events and benchmarking data (STR). It also allows operators to collaborate, manage and share data across different groups, teams and organizations. The platform features user-friendly dashboards and the ability to quickly surface key, actionable insights from all property data with a powerful, flexible rules and alerts engine, officials say.

The next-generation revcaster platform includes enhanced rate-shopping tools, which provide competitive intelligence functionalities and analytics.

The product joins an analytical tools lineup that includes guestrev and grouprev. Guestrev focuses on the transient and/or gaming customer. Casinos can use the platform to capture, in real time, what the player and customer value would be, giving them a tailored price based on this customer’s willingness to pay and value to the business, while also providing data based on market conditions and the overall forecast of that value.

Grouprev is a pricing optimization tool for each group led by micro-segmenting the business, so sales managers can truly understand what the value of the group is and how it fits within the overall property strategy.

All over the world, the gaming industry is ripe for the influx of solutions. Revenue management carries an increasingly large banner. Its information helps pinpoint rate strategy while allowing personnel to make some decisions on a human level.

The operators best poised to utilize the revenue-management realm will be those which can mostly remove the wall between hotels and casinos.

Casino Connection Sports Editor Dave Bontempo is an award-winning sports writer and broadcaster who calls boxing matches all over the world. He has covered the Philadelphia Flyers in the playoffs, as well as numerous PGA, LPGA and Seniors Golf Tour events, and co-hosted the Casino Connection television program with Publisher Roger Gros.