Understanding the Basics of Casino

Revenue Management

About Duetto

2

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.

7

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

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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