Change the way you price your resort

Casino International spoke with Duetto’s co-founder and Chief Analytics and Product Officer Marco Benvenuti about GameChanger, the cloud-based software-as-a-service that could change the way the industry prices its rooms forever – while still bringing good value to your guests. Casino International: What does Duetto do? Marco Benvenuti: Our company does what we call revenue strategy, providing software that allows hotels and now casinos to basically more strategically and dynamically price their rooms for customers. The company started by creating a product for hotels, which is easier to price than casinos because they are less complex. Then in early 2014 we created a product specifically for casinos called GameChanger. This tells a casino hotel how much they can charge for different rooms for different customers, and which customer at which time deserves a comped room versus which customers do not deserve a free room. So it enters into the player side of things by evaluating how much people play as well as if they spend other money in different parts of the resort. CI: Where did the idea come from? Was it an idea that came from outside that you have tweaked to work within the casino resort industry? MB: I’ve been working in the field of revenue management in the gaming industry for about ten years; I used to work for Caesars and then for Wynn pricing rooms and strategic marketing was part of my job. This models ideas that were formulated throughout my career. In building the software we started with regular hotels because the optimisation is that much easier; then we transitioned to casinos when the product was more mature because casinos are more complex. The idea came from casinos and we crossed it over to hotels, then we came back to the mothership, to casinos when the product was ready. CI: Do you already have customers for GameChanger? MB: We do have customers – on the hotel side, we have more because the product has been out there for longer. On the casino side we have one in downtown Las Vegas and Resorts in Atlantic City, Margaritaville Resort Casino in Louisiana; and there are newer properties that we have recently signed. In the past few months, we began work under a multi-year agreement with the Westgate Las Vegas Resort & Casino. This iconic property, formerly known as the Las Vegas Hilton, is undergoing a major overhaul, and selected GameChanger to optimize revenues, given its new mix of gaming, convention and time share customers. Earlier this year, we also started working with the South Point Hotel, Casino & Spa, which overlooks the Las Vegas Strip and which features 2,100-rooms. CI: Does the software work best when implemented with player tracking software, or does it work with historical data? MB: In order to work it needs to connect with the property management system of any hotel because we need to look at historical data, create a forecast and all of that; but of course, the system works better and is more dynamic, giving better decisions, if you are interfaced with any customer relationship managements system. In the case of a casino, of course, this means the player tracking system. This works even better if the player system of the casino does not just collect the player’s information on the gaming side, but also collects other spending in the resort. For example, the Konami player tracking system actually allows the resort to track not just the gaming, but also the other spending of customers throughout the resort. So with that our system can work the best because we can really optimise the decision on the hotel room based on the patron’s total spend. CI: Does this work with all systems? MB: We’re not interfaced with every system yet because when you’re a new player in the market, you first need to have a common customer. Then, once you have the customer, you can interface with the player tracking system. We work with them and build the interface. There are simply some we haven’t worked with because we don’t have a common customer yet. Interfacing with a player tracking system is really not a hard job because all you are doing is extracting patron numbers and then values of different patrons in a very anonymous fashion. There is nothing that we have to push back to the player tracking system, because the decision gets pushed back to the property management system and the reservation management system of the property because that’s where the reservation for the room is taken. CI: So GameChanger strikes a balance between finding best value for the customer, and best value for the customer? That is, both the casino, and the end user – because it’s not about finding the highest price, it’s finding the RIGHT price based on not just room demand overall, but also what the customer will spend during their visit… MB: Correct, but also our software is very agnostic in the sense that it optimises for the theoretical profit of the patron. Take a resort in Vegas: The constraint in all of the resorts is never the casino floor. You’re never really in a situation where you have more gamblers than slot machines or table games. The real constraint for all of these resorts is the hotel; you will have some nights when the hotel is not full, and some when you have more people than rooms to accommodate. Especially on those nights you have to make a decision on who you let into those rooms. You have competing factors because on one side you have people paying a high room rate, and on another you have players where you know how much they gamble, and you have other people where you know what they spend on other areas of the resort and all of that good stuff. It’s a pretty complex situation because you are trying to give the right room to the patron that allows you to bring the best theoretical profit for that particular stay throughout the entire resort. You are basically using the room component – which is really your constraint – to fill the place with the best patrons that will spend the most money throughout their stay in the resort. You’re not just optimising the room rate, you are optimising the revenue and profit flow throughout the resort, which happens when people implement our system. Instead of just seeing an uptake in cash revenue in the hotel they see better quality spend in every outlet, including gaming, throughout the resort. CI:?How do you make money from it? MB: We charge a fixed amount based on the number of rooms in the resort per month. It’s a subscription service; our system completely sits on the cloud so we are hosting in the Amazon Cloud. Whenever we enter into a contract with any hotel or casino, we charge based on the number of rooms. There is nothing up-front for them to pay, they don’t have to do a big capital investment for a new system, no IT spend, nothing to buy server-wise or to maintain. They pay their subscription, we come in, turn on the interface, and they can access our system from any device as long as they have a browser and internet connection. The hard part for us is to get operators to change the way they think about pricing their resort. They may have been doing things the same way for the past 20 or 30 years, and they may be resistant to change; in order to achieve success with our system you have to change the way your hosts think, your staff thinks – there is some change management that comes with the system, which is why the way I describe it is that we don’t sell the use of the software, we also sell a new discipline. You have to embrace the new discipline of revenue strategy. It requires human skills and interaction; some people are ready for it, some people need convincing. CI:?Is the product available internationally? MB: Yes. The company has recently opened offices in London and Singapore, so Europe and Asia are part of our expansion plans. The product is already ready for multi-language and multi-currency.