Investment Rating Service Slams Gaming Industry. By John Hendrie Monday, 11th August 2014
You would think that the Gaming Industry would be screaming with outrage with the most recent down outlook by Moody's Investors Service, revising its' update of the industry from stable to negative; Been pretty quiet out there in terms of response!
Maybe this is due to summer activity at gaming facilities. Perhaps, it has something to do with the expansion of gaming in a number of large states like New York and Massachusetts.
It could be the spin you put on your status, like in Atlantic City; is it on the demise or merely a transformation. Tribal gaming is still spitting with states as to rights and share revenue; major properties are closing; gaming initiatives are facing a repeal action by citizens; markets are saturated. Even Destination Markets, like Deadwood, SD are reeling.
This is full reinvention, as the New York Times noted with the article: "As Gold and Gambling Lose Their Luster, Deadwood Seeks a Spark.” Interestingly, Las Vegas is holding its own, able to work through feast and famine!
This is surely a curious time. Moody's SVP Keith Foley noted, "The fact regional gaming revenues excluding Nevada remained flat, despite further improvement in the economy and additional regional casinos throughout the US, is a strong indication that US consumers will continue to limit their spending to items more essential than gaming, even as the US economy continues to improve."
Those in the industry can react any number of ways - gnash those teeth, slap some more money at marketing, hide our heads in the sand or become proactive.
The gaming scene has changed and will continue to challenge - gaming has become just another choice for that expendable dollar - you have lost some of the the glitter and promise. Moody's laid it out succinctly: "Moody's currently estimates that total US gaming revenues reported by state gaming authorities will decrease at a rate of between 3.0% and 5.0% over the next 12 to 18 months, translating to a decrease in overall industry earnings before interest and taxes (EBIT) of between 4.5% and 7.5%.
Because gaming involves relatively large fixed assets and costs, Moody's expects earnings to decline at a faster rate than revenues".
When all is considered, you do have control over one aspect of the business - the Player Experience. Even though you are competing against what Moody'd referred to above as "...items more essential than gaming," the thirst for entertainment, choice and authenticity is strong, particularly when you offer the full range of excitement - dining, recreation, shopping, shows and revues, spas, and, naturally, games of chance. The challenge is to make the experience compelling and memorable.
Do you have your finger on the pulse of the operation? What are your guests and players telling you? How are you responding to their comments and insights? Are your standards and protocols in place and practiced consistently?
The flavor of your Brand needs to be everywhere. Is the facility gleaming and clean? Of course, the major differentiation, no matter the retail business, is customer service. You can compete!
John Hendrie is the author of the LRA blog, focusing on anything and everything about customer experience. LRA Worldwide is the leading global provider of Customer Experience Measurement services for multinational companies with complex customer interactions. For over 30 years, LRA’s innovative brand standards audits, quality assurance inspections, mystery shopping programs, research, and consulting services have helped ensure our clients deliver consistent, memorable, and differentiated experiences to their customers. Many of the world's preeminent global hospitality brands, as well as companies in the gaming, dining, healthcare, sports and entertainment, real estate, retail and travel industries choose LRA to help them measure and improve the customer experience. For more information, visit www.LRAWorldwide.com.
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