News & Insights

Industry Spotlight: Casinos Seek Growth in New Ways

December 5, 2010

According to the Las Vegas Review Journal, gaming revenue in Atlantic City has consistently dropped for 23 straight months through August 2010. While the average U.S. household still spends three percent of its income on gambling, lower income households tend to spend more than other income groups. Those lower income guests are making up a larger proportion of casino visitors as the middle class continues reallocating discretionary funds to balance their debts and focus on savings.

Coupled with decreased profitability of high rollers, this shift in the consumer makeup is forcing casinos to seek growth in new ways:

  • Highly Discounted Packages: Casinos are attempting to slow continued revenue loss by introducing severe discounts for ancillary experiences like hotels and dining or creating compelling all-inclusive packages, creating the opportunity for lower income visitors to have an experience they can’t find elsewhere.
  • Rebuilding Loyalty Programs: Currently, trend reports show that certain consumers now view loyalty and rewards programs as impersonal and generic. Casinos are beginning to focus on “middle of the road” players for loyalty programs rather than high rollers, who have become more and more difficult to please with standard packages of perks.
  • Creating New Style Casinos: There’s a new evolution of “mega casinos” that feature restaurants, shopping centers, hotels, golf courses and more. These giant resorts are reliant on a strong customer relationship management platform that helps them generate a sense of belonging among their guests. Casinos generate additional revenue by serving a guests’ every need on the property.

The recession has forced consumers to examine their spending across all categories of goods, and none has been pared back further than discretionary items like gaming and entertainment. Examining key industries like this provides an opportunity for companies of all kinds to learn innovative ways to retain key customers.