The practice of revenue management is helping casino managers market their casino to the right audience and price their product to boost bottom-line revenue. In this webinar you will learn the fundamental concepts behind casino revenue management (segmenting, forecasting, pricing etc) and how to get started in a few simple steps. WEBINAR AGENDA: - Introduction to casino revenue management - Getting started with segmentation - How to accurately forecast upcoming demand - Reinvestment decisions and revenue management

1. Understanding the Basics of Casino
Revenue Management

2. About Duetto
2
Founded by
Industry Leaders
World-Class
Technology Development
Committed to
Customer Success

3. 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. 4
Nevin Reed CRME
Director of Customer Success
17 YEARS Hospitality/Casino Experience
12 Years Revenue Management

5. 5
Overview

6. Rapid advancements in technology have
changed the game
6

7. The best casinos gather supply, demand, worth
data, total profit and analyze it and use it to make
operational, comp and pricing decisions.
7

8. Terminology
8

9. 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
9

10. Segmentation
10

11. Casino Segmentation – Old School
▍ Comp
▍ Host decision
▍ Casino Rate
▍ Not Dynamic
▍ Rack
▍Sorry Buddy
▍ Offers or Special Events
▍ Close or Box
11

12. 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
12

13. Casino Segmentation – Examples
▍ Never limit yielding segments
▍PMS need to adapt
▍The more, the merrier?
▍Unlimited…..The Future
13

14. Casino Segmentation – Room Types
▍ Dynamically Price Room Types Based on Theo Worth
14

15. Forecasting
15

16. Casino Forecasting
▍ Booking Curves
▍ Real Time Pick-Up & Last Minute Demand
▍ Forecast VIP Demand
▍ Room Type Demand
▍ Forecast No-Shows
▍ Real Time Alerts
16

17. Forecasting – Booking Curve
17

18. Forecasting – Real Time Pick Up
18

19. Forecasting – VIP High Theo Demand
19

20. Forecasting – Room Type Demand
20

21. Forecasting – No Show or Overbooking
21

22. Casino Forecasting - Alerts
▍ Real Time Alerts
22

23. Open Pricing
23

24. 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
24

25. 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
25

26. 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
✖
✔
✖
✖
✔
✔
✔
✔

27. Open Pricing
27
$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
✔
✔
✔
✔
✔
✔
✔
✔

28. Traditional Pricing
28
$100
$150
$300
$200
Day 1 Day 2 Day 3 Day 4
Capacity
Comp
✖
✔
Comp✔
Comp
✖ Comp

29. Open Pricing
29
$100
$150
$300
$200
Day 1 Day 2 Day 3 Day 4
Capacity
Comp✔
Comp✔
Comp $150
Comp $50
✔
✔

30. Open Pricing – DM
30
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
$19
COMP
(free
upgrade)
COMP COMP COMP
COMP COMP COMP
COMP
(free
upgrade)
COMP
(free
upgrade)

31. Total Customer Worth / Loyalty
31

32. Myth:
ADT or Gaming Spend is all the data we need
Casino
Hotel
F&B
Spa
Golf
Casino
Hotel
F&B
Spa
Golf

33. 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

34. 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

35. Loyalty Optimization
▍ Customer Retention and
Revenue Optimization
▍ Loyalty Program of the future
▍ Fenced Pricing
• What is Fenced Pricing
• Brand.com vs. OTA
35
VS

36. 36
Reinvestment

37. Reinvest and Stay Profitable

38. Re-investing In Gaming Customers
Sample ADT = $120
▍ Reinvestment = 35% = $42/day
▍ BAR = $100/night
▍ Optimal rate for this customer = $58/night

39. 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

40. Tuesday, June 23
35% reinvestment
Citywide Event
35% reinvestment
New Year’s Eve
35% reinvestment

41. Tuesday, June 23
50%
reinvestment
Citywide Event
30%
reinvestment
New Year’s Eve
10%
reinvestment

42. Questions?
42