Villa & Suite Controls to Maximize Profitability
by Steve Karoul
Every casino that has a hotel with Suites and Villas runs into the same problems week in and week out. How do you ensure that the best players get the best accommodations? One big problem is favoritism. The second biggest problem is lack of proper controls to eliminate the favoritism. The only way to eliminate it is to develop a system that is fair and equitable but even more important, develop a system that has visibility. This is particularly important at larger casino properties that have multiple Casino Hosts and Player Development Executives all vying for the same limited number of suites and villas. The natural tendency is for every PD Exec or Casino Host to try to gain loyalty from their players by taking good care of them and getting them the best accommodations. However, this goal is sometimes diametrically opposed to the property's goal of trying to maximize bottom-line profitability. In addition, during peak holiday times or during key special events the problem gets magnified due to the fact that you will probably have more players that actually qualify for suites than you have inventory of. We often get 300 or more requests for Suites and Villas from qualified players but the problem is that we only have about 180 actual Suites and Villas to work with. Therefore, it sometimes becomes necessary to remind the staff that it is physically impossible to squeeze a gallon of liquid into a quart jar. Most people can relate to that.
The only way to change this is to re-invent yourself and change the culture at the property from an "I" or "Me" culture to a "We" and "Us" culture. This is not an impossible task but it does take a concentrated effort and a fair amount of retraining of your existing staff to be able to properly explain the change and the results to their players without losing them as customers. There will be difficult moments when certain big customers will throw their temper tantrums and either threaten to leave the property or actually leave in a rage. The main concern is to make sure that your staff understands that as long as your system is fair and equitable that they have nothing to fear. Losing an upset customer who is unreasonable is beyond their control. A helpful analogy is that the dog wags the tail rather than the tail wagging the dog. Your staff has to maintain control at all times or there will be anarchy and chaos. One additional point is that most people do not like surprises. We have had great success by calling players just prior to their trip and explaining the results of the Suite Committee and informing them at that time about their room assignment for the weekend. Most players appreciate the advance notice and then can decide whether to come in or not. We rarely lose players that are informed in advance that they did not get their request this time due to the fact that our system is fair and equitable and we assign the Suites and Villas based upon play. They understand.
However, this process cannot be a random process. It needs to be highly structured, visible and occur on a regular basis. The easiest way is to develop a permanent Suite Committee that meets at the same time every week. Our suite committee meets every Thursday and it is made up of team members from the Casino Host Department, the Player Development Department, the Hotel, VIP Services and depending upon the weekend or the event we may invite guess attendees from other operating departments such as Junkets, etc. In addition for certain key holiday periods such as New Years Eve, etc. we also invite our Vice President of Tribal Relations to handle tribal suite requests. First, we never guarantee any Suites or Villas in advance. Every reservation is input into the computer system as a Suite or Villa "Request" subject to final review and assignment by the Suite Committee. Second, all assignments are based upon review of an internal Villa & Suite Committee report that ranks all players in descending order based upon a variety of factors.
Everyone must understand that we only look at numbers and not personalities. In other words, we do not show favoritism and we try to assign the best Villa / Suite to the best person. In the casino business there will however always be exceptions, special occasions or special circumstances. That is why we have Vice Presidents and Directors.
When determining Villas or Suites for the weekends or special events we look at the following criteria’s in order from first to last to generate an overall picture of a patron's real worth to the casino. Please keep in mind the Villas & Suites are normally used for the customers who have the possibility and have shown a past record of the most impact (large losses) play or large daily Theoretical. However, even that figure can be misleading if the player is winning and continues playing long hours with the houses money. Ask yourself the question, how much can this customer lose in a weekend to produce the largest win for the casino? We may also take chances on new customers with a proven track record at other casinos. Villa and Suite assignments are not automatic and should never be promised to any customer on a regular basis. They are reviewed each week based upon total requests. Unless your property is an all-suite property, it is critical to utilize a formal request / review process.
When using a Villa / Suite Report to help determine room assignments:
1. Look at the 12 month year to date Theo Win. The larger the Theo the better the player.
2. Look at the overall losses & wins year to date. The larger the number the better. If there is a negative number, the patron is a winner.
3. This next step is vital in the suite process and most likely will determine who gets what in combination with the loss factor. Look at the patrons theoretical for the last year in combination with the amount of trips they have made this year. The larger the daily trip Theo average for the year, the larger and more impact the player will bring in possible Win for the casino.
4. Consider overall lifetime losses for tie-breakers.
5. When making close decisions, you can and must take into account the amount of credit line currently available or unavailable as well as cash or check equivalents available on deposit. A $100,000 player with only $25,000 available can only lose $25,000 on that trip; not $100,000. Therefore, a solid $50,000 player may take precedence in a close situation.
6. Finally, you may sometimes also look at the life time value of a player. Smaller players who lose consistently and are in the top profitability range are sometimes given preference as well in close call situations.
This is not an exact science and therefore ultimate responsibility lies with either the Vice President of Casino Marketing or the Director of Casino Hosts. In addition, the Asian Department normally has their own weekly blocks. Since their customers do not normally make reservations in advance, you may want to allow Asian Marketing to manage their own rooms within their own set blocks. On holiday weekends or large special events we will sometimes put set blocks or rooms / suites aside under the names of our Vice President Casino Marketing and our Director of Casino Hosts. They are the only ones allowed to release these rooms to players. In a sense these rooms represent a safety factor since there will always be mistakes or misunderstandings. Therefore, even if you are "sold out" you will always have a safety factor to help take care of last minute big players or mistakes. For example, at Foxwoods, we have 12,000+ employees but only two people are allowed to release these last few rooms which helps us to guarantee that these remaining valuable rooms go to the proper players who can help the property best maximize profitability for that nig
Date Posted: 08-Jun-2006
Steve Karoul is Vice President of Casino Marketing for Foxwoods Resort Casino located in Connecticut. Steve has almost 30 years of experience with top casinos both domestically and internationally. He is a contributing writer to several different major casino publications often injecting his own experiences. Steve can be reached at Tel. (1-860) 312-5070 or by E-mail: skaroul@mptn-nsn.gov]
