Where does your property fit in?
In Raving’s 1st Annual Indian Gaming National Marketing Survey, I noticed some very revealing information about entertainment:
- 83% of casinos have regular live entertainment, with almost half offering it only on weekends.
- 44% of casinos report that their entertainment programs are losing money.
- 38% are breaking even.
- 11% are profitable.
- 7% are not sure how their programs are performing (excludes gaming revenue from comped tickets).
First of all, a casino without entertainment would be a very boring place, and most of your customers would find another place to visit. Casinos today are the center point in secondary and tertiary markets, as the place to go for an evening out.
How Tribal casino entertainment has changed
So, let’s take a look back at what our history is with Tribal gaming. Remember “If you build it, they will come”? And they did! The first Tribal casinos were packed. Everyone was making money. Just the fact that you could now have Las Vegas style gaming in your backyard was exciting.
These casinos needed entertainment, which resurrected the careers of every 60’s and 70’s band that ever existed. All of a sudden, these bands were back in business. Tribal gaming was mimicking Las Vegas, and the Las Vegas motto was “supply free entertainment, inexpensive rooms and cheap food, because this is the gaming business. We want our customers on the gaming floor.”
Now fast forward to today. Those customers and those bands are aging out, very rapidly. Casinos are chasing after the younger customer. What’s going on now with entertainment?
Let’s first consider the survey info on the previous page, breaking down entertainment (see my added notes in red):
Why are casinos losing money on their entertainment?
- Are they only counting the door revenue for tickets?
- Are they trying to save money by cutting the budget and bringing in low quality bands? Are they not considering Food & Beverage revenues?
- What about the incremental revenue created on the floor?
- Is your casino entertainment stale and boring?
The intangible point here is that today’s customer is more educated about music and the quality of that music. Your younger customer wants something different, sometimes more contemporary. The entertainment you provide must reflect the quality of your brand. Are you thinking that you are saving money with lesser quality entertainment, only to be losing customers and gaining a poor reputation?
It’s no longer a world where you can find any old act and bring them in with the expectation that you will attract customers and build your Players Club base.
Why revenue from ticket sales isn’t your goal
Consider what you have to work with, the size and capacities of your own property entertainment venues. Then you can realistically build an entertainment program that will fit your needs and the needs of your customer. Your entertainment is meant to drive your gaming and casino business. Casinos are not concert promoters. You will very seldom make enough money off of your ticket sales to actually pay for your concert or event. The point is, and always has been, to drive more customers to your property, and entertainment is one distinguishing factor in that puzzle. So make sure that you are looking at all your departments, and study what revenue bumps you get when you have a concert or an event. Each department has to share and understand that the revenue created is an overall process, not just an individual department process.
Is it time to shake things up?
My personal observation would be that if your entertainment program isn’t working, get out and around to your competition and the other music venues in your area. How are they doing? What are they doing? Researching, buying and booking entertainment is not a casual job anymore. Prices can vary by up to 300%, depending on who is inquiring. This goes for lounge entertainment, as well as concert acts. The person or department responsible for bringing in your entertainment has to really grasp all the nuances of lounge entertainment, special events and concerts.
You get what you pay for, and quality groups cost money. Wouldn’t you rather spend a little extra money to create a unique and exciting entertainment program, both in your lounge and in your showroom? Are you really saving money when you sacrifice your casino brand? Too many casino people are too busy looking for ways to save money, and they are not realizing the old saying – “You have to spend money to make money.” Now I am not saying that you need to throw money at the wall and hope it sticks. I am saying to spend money in a way that builds and develops your business and your customer base.
Also, it takes some effort, but you need to put together a plan to build your other days of the week. You need to educate your customer. There are plenty of casino properties doing Thursdays and Sundays. What about your retired customers? They need something to do during the week and during the day. They dislike weekends, and they do not like to drive at night.
The bottom line is that casino business today is operating more on how to cut corners and save money. Everyone is concerned about their jobs. The reality is that we are becoming complacent. We are choosing the “same old, same old” way of doing things. It’s time to shake things up a bit and try new programs and ideas. Allow those ideas to succeed or fail, but at least try some new approaches.