The Rainmaker Group is set to present a step-by-step approach to total revenue optimization for casino and gaming properties at the INFORMS 2017 Business Analytics Conference, being held at Caesars Palace in Las Vegas, April 2-4. The informative session, titled ÒVegas Predicts: How the Prophets of Gaming Called the Trend for Profit OptimizationÓ will be presented on Monday, April 3 from 10.30-11.30am.
During this strategic session, which is in the Revenue Management and Pricing Track, Angie Dobney, Rainmaker’s Vice President of Pricing and Revenue Management Services, will detail the data-driven methodology behind the total revenue management approach that has been successfully implemented by many casino properties in recent years. Ms Dobney will also explain the specific processes that revenue managers can use to strategically price and protect room inventory for the property’s most valuable guests by segment, as well as by individual spending and play patterns.
Since gaming revenue typically is significantly higher than room revenue, casino hotels have traditionally left money on the table by over-discounting and comping rooms without the real-time data to back up those decisions, Rainmaker said. A more strategic and profitable total revenue management approach goes far beyond those antiquated methods by considering the total value of each segment and individual customer, based on all available revenue streams, including gaming, room revenue and ancillary revenue such as F&B, wellness and retail. By factoring total spend into their pricing decisions, gaming resorts can refine their practices to significantly impact overall profitability of the property.
Using this total revenue management approach to effectively optimize profitability, casino hotels have shifted from measuring their success by RevPAR, which is rapidly becoming outdated, to TRevPAR (Total Revenue Per Available Room) that includes revenue from both gaming and non-gaming activities. By forecasting demand for each customer segment based on total spend, casinos can determine the optimal mix of customer segments for each date and use real-time data to target them with the most strategic pricing and promotions for each.
Casino hotels can win big by using data-driven solutions that also factor in total guest value by arrival date and length of stay, to ensure that rooms are always available for their most valuable customers, Rainmaker noted. Hotels can forecast each segment’s demand, determine the optimal mix based on the profitability of each segment, and then make pricing decisions that target this ratio. In its session at INFORMS, Rainmaker will show them how to do this, step by step, in order to yield the best results.