Understanding the Basics of Casino
Revenue Management
About Duetto
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Founded by
Industry Leaders
World-Class
Technology Development
Committed to
Customer Success
What We’ll Cover
▍ Introduction▍ Nevin Reed – Dir. Customer Success
▍ Overview▍ Terminology
▍ Segmentation
▍ Forecasting
▍ Casino Open Pricing
▍ Total Customer Worth / Loyalty
▍ Reinvestment
▍ Questions
3
4
Nevin Reed CRME
Director of Customer Success
17 YEARS Hospitality/Casino Experience
12 Years Revenue Management
5
Overview
Rapid advancements in technology have changed the game
6
The best casinos gather supply, demand, worth data, total profit and analyze it and use it to make
operational, comp and pricing decisions.
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Terminology
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Terminology – Casino Lingo
▍ NI – Non-Incented
▍ DM – Direct Mail or Direct Marketing
(Incented)
▍ SE – Special Events
▍ ADT or ADW - Average Daily
Theoretical or Average Daily Worth/Win
▍ Theo. or Theo. Worth
- Theoretical Worth
▍ Casino Rate – Discounted rate based
on ADT, Flat % off, Flat $ off or Flat Rate
(wkdy/wkend)
▍ Comp - Complementary
▍ GGR – Gross Gaming Revenue
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Segmentation
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Casino Segmentation – Old School
▍ Comp▍Host decision
▍ Casino Rate▍Not Dynamic
▍ Rack
▍Sorry Buddy
▍ Offers or Special Events
▍Close or Box11
Casino Segmentation – New School
▍ Theo Worth Segmentation
▍Real Time Pricing based on Theo.
▍ Fully Dynamic Casino Rate
▍ Including Dynamic Room Type Pricing
▍ Never close any DM offers or Special Events
▍Never Static
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Casino Segmentation – Examples
▍ Never limit yielding segments
▍PMS need to adapt
▍The more, the merrier?
▍Unlimited…..The Future
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Casino Segmentation – Room Types
▍ Dynamically Price Room Types Based on Theo Worth
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Forecasting
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Casino Forecasting
▍ Booking Curves
▍ Real Time Pick-Up & Last Minute Demand
▍ Forecast VIP Demand
▍ Room Type Demand
▍ Forecast No-Shows
▍ Real Time Alerts
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Forecasting – Booking Curve
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Forecasting – Real Time Pick Up
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Forecasting – VIP High Theo Demand
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Forecasting – Room Type Demand
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Forecasting – No Show or Overbooking
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Casino Forecasting - Alerts
▍ Real Time Alerts
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Open Pricing
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Open Pricing - Flexibility
▍ Dynamic free-float pricing for all segments
▍ Independently price every single segment,
channel, room type and offer
▍ Maximize revenue over high demand and need periods
▍ Keep all channels open
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Open Pricing
▍ Yield segments, discounts, and room
types independently on unconstrained
demand
▍ Never limit distribution: no need to close
channels or rates
▍ BAR limits distribution
▍ Closes off potential long stays
Disconnect from BAR & Yield Up
Discounts and Room Types
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Traditional Pricing
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$100
$150
$300
$200
Day 1 Day 2 Day 3 Day 4
Capacity
AAA/AARP: 10% off
Gov/Mil: 20% off
AAA/AARP: 10% off
Gov/Mil: 20% off
AAA/AARP: 10% off
Gov/Mil: 20% off
AAA/AARP: 10% off
Gov/Mil: 20% off
✖
✔
✖
✖✔✔
✔✔
Open Pricing
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$100
$150
$300
$200
Day 1 Day 2 Day 3 Day 4
Capacity
AAA/AARP: 10% off
Gov/Mil: 20% off
AAA/AARP: 10% off
Gov/Mil: 20% off
AAA/AARP: 10% 3% off
Gov/Mil: 20% 3% off
AAA/AARP: 10% 5% off
Gov/Mil: 20% 10% off
✔
✔✔
✔✔
✔✔
✔
Traditional Pricing
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$100
$150
$300
$200
Day 1 Day 2 Day 3 Day 4
Capacity
Comp
✖
✔
Comp✔
Comp
✖ Comp
Open Pricing
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$100
$150
$300
$200
Day 1 Day 2 Day 3 Day 4
Capacity
Comp✔
Comp✔
Comp $150
Comp $50
✔
✔
Open Pricing – DM
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Example B: One complimentary night (standard room, valid Sunday through Thursday)
SUN MON TUE WED THUR
COMP COMP COMP COMP COMP
COMP COMP X X COMP
COMP COMP COMP COMP X
X COMP COMP COMP COMP
COMP COMP COMP COMP COMP
SUN MON TUE WED THUR
COMP(free
upgrade)
COMP(free
upgrade)
COMP(free
upgrade)
COMP COMP
COMP COMP $9 $19 COMP
COMP COMP COMP COMP $29
$19COMP
(free
upgrade)
COMP COMP COMP
COMP COMP COMPCOMP
(free
upgrade)
COMP(free
upgrade)
Total Customer Worth / Loyalty
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Myth:ADT or Gaming Spend is all the data we need
Casino
Hotel
F&B
Spa
Golf
Casino
Hotel
F&BSpa
Golf
Loyalty Rates
▍ Shift business from OTAs to brand.com by offering fenced
rates to all loyalty members who book direct
▍ Offer specific loyalty rates based on customer value
▍ Track shopping details of your loyal customers to better
understand their behavior
Establishing Total Customer Worth
▍ Next Big Thing
▍ 360 view of total customer worth
▍ Total Spend
▍What is Ancillary Spend?
▍Why is this important?
▍How to look at Worth
Loyalty Optimization
▍ Customer Retention and
Revenue Optimization
▍Loyalty Program of the future
▍Fenced Pricing• What is Fenced Pricing
• Brand.com vs. OTA
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VS
36
Reinvestment
Reinvest and Stay Profitable
Re-investing In Gaming Customers
Sample ADT = $120
▍ Reinvestment = 35% = $42/day
▍ BAR = $100/night
▍ Optimal rate for this customer = $58/night
DM Option: Comp or Close
▍ BAR = $200/Night
▍ ADT = $120.00
▍ Reinvestment = 35% = $42
▍ Rate paid by this customer = $0
▍ Result = $78 over-comp
▍ Close Offer
Tuesday, June 2335% reinvestment
Citywide Event35% reinvestment
New Year’s Eve35% reinvestment
Tuesday, June 2350%
reinvestment
Citywide Event30%
reinvestment
New Year’s Eve10%
reinvestment
Questions?42