The Role of Amenities in the Marketing Success and Profitability of Casino Industries - Research Paper Example

?The Role of Amenities RUNNING HEAD: THE ROLE OF AMENITIES IN THE CASINO MARKETING The Role of Amenities in the Casino Marketing Success and Profitability [Your Name] [Your School] The Role of Amenities 2 Introduction Casino entertainment is considered both labor-intensive and capital-intensive; since there is no other economic development tool which can generate as many jobs, as quick, and absent expenditure of government funds than casino gaming (Harrah's Entertainment, 2000). In United States alone, casino gambling has been experiencing rapid growth during the last decade, whereby annual industry growth rates reached an average of nine percent (9%) and revenues passed the 10 billion dollar mark (Minnesota Press, 1992). In Canada, the gaming industry has exceeded expectations and statistics showed the extent of the industry’s impact towards the nation’s economy. In fact, the industries have contributed $15.3 billion annually to the economy; employed more than 135,000 Canadians; and generated an annual gross economic output of nearing $29 billion (Girvan, 2008). It has also become highly categorical; and take in the form of machine gaming, state controlled gaming, table gaming, riverboat gaming, charitable gaming and others (Merfels, 1995). In addition, Casino jobs are good jobs; in fact, the employee's average annual income is around $30,000, and generally, these jobs provide retirement benefits and health insurance. As an added plus, casino industry also has superior track record of hiring workforce locally and training the underemployed, the unemployed, and minority members of society. Other than that, casino gaming also produces indirect jobs, through the purchase The Role of Amenities 3 of both goods and services (Harrah's Entertainment, 2000). While its not very obvious, the history of marketing casino and the difficulties of measuring its marketing activities have greatly influence modern practices. In specific, many of today's activities in casino marketing practices rooted from a time when the conditions of supply and demand were very favorable; there were great population of gamblers while limited sites of casino (Lucas & Kilby, 2007). This research explores the role of amenities in the casino marketing success and profitability which can benefit many stakeholders like investors, consumers and the local industry prior to or even the existing operations. Problem Statement This research intends to explore the role of amenities in the marketing success and profitability of Casino industries. In particular, it seeks to address the following queries: 1. What are the existing amenities established in most casinos in the area of ____________________ ? 2. What are the diverse roles served by the amenities in most casinos? 3. Do amenities produce significant impact in the casino marketing strategies and profitability? 4. What is the level of marketing strategies and profitability in casino businesses with and without amenities? The Role of Amenities 4 5. How profitable is the casino business with and without amenities? Hypothesis Ho: Amenities have no significant impact in the casino marketing strategies and profitability. Literature Review The gambling industry is just the same as any other entertainment industry. The businesses utilize hotels, computers, video equipment, machines, croupiers, new games and new technologies for the purpose of selling the games, which are being invented. It is also linked with the plays or ballets production and operas, combined with hotels, theaters and concert halls which can also be added attraction. Consumers pay for the tickets, while singers, artists and theater-owners acquire the more money (Harrah's Entertainment, 2000). In a casino business a quality marketing activity and well-defined measurement plan must be set. An advance statistical methods must be required to calculate effectiveness of marketing strategies, because in the absence of these, will result to serious problems. The most common shortcomings of casino industries are the feedback and marketing efforts that is quite hard to produce, as several transactions go unrecorded and creates negative cash flows (Lucas & Kibly, 2007). Role of Amenities. Amenity is difficult to define in the world of hotel-casino The Role of Amenities 5 business. Some businessmen considers a bingo room as one of the amenities; while others linked the term to night clubs, spa, restaurant and entertainment outlets; and the amenity management is a growing concern for the several gaming companies. According to Girvan (2008), one of the most cost-effective means to reinvent and reposition a gaming destination is to renovate or expand the non-gaming amenities offered surrounding the facility. It is, however, essential to capture all the revenues that an amenity generates in order to get a true picture of the return of investment. For example, the ticket sales and concessions from a theater will generate revenues and incremental gaming revenues will also be raised from theater goers. Facilities. In a casino, tables come in various shapes and sizes, from oval-shaped poker tables, half-round crescent of blackjack up to the long rectangle of craps. Even the most intimidated gambler can enjoy a gratifying time at these machines. The lone gambler can square off against a machine and this part looks more closely at video poker and slot machine (Lucas & Kibly, 2007). In addition, there are also other devices that customers can enjoy, few of these are the slot machine, bingo rooms, and many others. Facilities are not solely limited to the gaming facilities. There are also amenities that are considered as non-gaming and this refers to amenities, a hotel is an example. Hotels are amenities considered in establishing a gaming property because of its ultimate potential returns, restaurants and entertainment The Role of Amenities 6 venues. Also, a hotel allows the casino to raise incremental revenue through casino marketing programs (Klebanaw, 2006). The judgment regarding suitability of the amenity is distinguished through calculations according to projections, which cover increases in gaming revenue (Girvan, 2008). A well designed and properly maintained hotel, which is effectively marketed can produce a substantial profit as a “stand-alone” revenue center. Moreover, no casino marketing activities or programs will appear successful without a positive customer experiences. Given the heightened competition for players, a positive customer experience and the rising acquisition costs in markets, has never been more important. In this context, the customer experience can be sub categorized into more specific components like service delivery, customer service, and the physical environment Methods To provide accurate responses to the research questions, this study will use descriptive design and will consider multiple techniques to measure the target variables. A valid and reliable checklist will be utilized to observe the the existing amenities established in most casinos in the area of ____________________; one-on-one interview with selected participants to explore the diverse roles served by the amenities in most casinos; and a questionnaire can also be used to estimate the level of marketing strategies and profitability in casino businesses The Role of Amenities 7 with and without amenities. Also, using the customers' database electronically, the study could analyze the customer attributes to evaluate the predicted spending, likelihood of a visit, and opportunities for cross selling, etc. REFERENCES Bill, Z. and Prem, G. (2010) Can better occupancy management b oost table games profitability?Casino Enterprise Management, 70-71. CRM Media (2011) Exploring Different Approaches to Profitability Measurement. 70-72. Girvan, P. (2008) Amenities: A Surprising Growth Option for Canadian Casinos. Retrieved on March 31, 2011 from http://www.casinoenterprisemanagement.com/articles/august- 2008/amenities-surprising-growth-option-canadian-casinos High Stakes (1992) Gambling in minnesota, Minnesota Planning, St. Paul, Minnesota. Klibanaw, A (2006) The Changing Role of the Casino Hotel. Indiana Gaming Commission. Retrieved on March 31, 2011 from http://www.indiangaming.com/istore/Oct06_Klebanow.pdf Lucas, A and Kilby, J. (2007) Casino marketing.Retrieved on March 31, 2011 from http://principlesofcasinomarketing.com/uploads/Casino_Marketing_- _Chapter_1.pdf Read More