Maximizing Non-Gaming Casino Revenue

By Mark Tapling President & CEO, InfoGenesis | October 28, 2008

Non-gaming casino revenue was once considered an oxymoron. In today's industry though, it has become a vital part of most casino operator financial reports. In fact, some top players in the industry have indicated non-gaming revenue accounts for 50% or more of total revenue.

Less visible to many in the hospitality industry is the important role that technology can play in maximizing non-gaming revenue. Certainly some of the standbys of technology value like flexibility, scalability, and reliability contribute. But they represent a small part of a bigger story. It is the guest-centric and integrated nature of present and future technology that will allow non-gaming casino revenue to reach its potential.

What's Happened in the Industry

As casino resorts and hotels have matured, evolved and segued into the luxury segment, non-gaming aspects of these operations have taken on stand-alone significance. Hotel rooms in Las Vegas, Atlantic City and other gaming destinations were once "comped" for many players or available at reduced rates. These rooms now command some of the highest average daily rates in the industry.

There have been changes in other areas as well. Investments in celebrity chefs and high-end restaurants to achieve a competitive edge have consequently demanded more than "respectable" bottom line results. Retail operations-far from the t-shirt and sundry shops of days past-carry designer names and, in some cases, achieve shopping mall size. World-class spa operations and entertainment venues are attractions in and of themselves as casinos have turned into full-fledged destination resorts. On the global stage, an explosion of gaming resorts in Macau and other exotic international locations have underscored the size and complexity of this rapidly expanding industry.

Of course there's a pattern here-a steady march towards better services, creating a destination for guests who increasingly participate in their own travel planning, and retaining guest dollars rather than seeing them go somewhere else. It's been an exciting and natural evolution. But by no means is the industry done changing. The next evolution will be a little more subtle in established markets, but no less important.

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Hotel Spa: Oasis Unplugged

The driving force in current hotel spa trends is the effort to manage unprecedented levels of stress experienced by their clients. Feeling increasingly overwhelmed by demanding careers and technology overload, people are craving places where they can go to momentarily escape the rigors of their daily lives. As a result, spas are positioning themselves as oases of unplugged human connection, where mindfulness and contemplation activities are becoming increasingly important. One leading hotel spa offers their clients the option to experience their treatments in total silence - no music, no talking, and no advice from the therapist - just pure unadulterated silence. Another leading hotel spa is working with a reputable medical clinic to develop a “digital detox” initiative, in which clients will be encouraged to unplug from their devices and engage in mindfulness activities to alleviate the stresses of excessive technology use. Similarly, other spas are counseling clients to resist allowing technology to monopolize their lives, and to engage in meditation and gratitude exercises in its place. The goal is to provide clients with a warm, inviting and tranquil sanctuary from the outside world, in addition to also providing genuine solutions for better sleep, proper nutrition, stress management and natural self-care. To accomplish this, some spas are incorporating a variety of new approaches - cryotherapy, Himalayan salt therapy and ayurveda treatments are becoming increasingly popular. Other spas are growing their own herbs and performing their treatments in lush outdoor gardens. Some spa therapists are being trained to assess a client's individual movement patterns to determine the most beneficial treatment specifically for them. The July issue of the Hotel Business Review will report on these trends and developments and examine how some hotel spas are integrating them into their operations.