Las Vegas casino players clubs are tightening the purse strings on how they reward customers. Before you get fired up just understand that this isn’t new. The casino operators are just discussing this publicly.
Before moving to Las Vegas, I could just show my Black Card at Borgata which would get a guest and I into the beautiful Amphora Lounge. Shortly before moving they started charging $10 in comps per person. The Amphora Lounge was great with top-shelf liquor and food from the delicious buffet. Entry was definitely worth $10. (It’s now $12.50.)
Total-Rewards Diamond Lounge Changes
Shortly after I moved to Las Vegas, Caesars Entertainment started a similar policy at their Atlantic City Diamond Lounges. Guests with a certain amount tier credits could enter the Total Rewards Diamond Lounge for free. If a guest didn’t obtain the appropriate tier credit threshold they were charged $10 (Reward Credits) per guest.
Caesars will be rolling out this policy for all Diamond Lounges at Caesars properties around the country in 2018. Guests will need 25,000 tier credits for free entry to the upper tier loyalty clubs. If you do not qualify for free entry, a fee of $10 (Reward Credits) will be charged for entry.
Total-Rewards Changing Reward Tactics
During their recent call with investors, Caesars Entertainment executives made it clear that they were putting systems in place for customers that take advantage of offers. In the past (and probably still today) guests could receive Total Rewards promotions just by booking a room in the past with the program.
There hasn’t been commitment required for guests to spend money on every trip. That should be changing. It appears as though they will be putting systems in place for customers who book offers but don’t stay or spend money at the property.
It isn’t a secret that there are some guests looking to maximize their comps with this tactic. In order to get the most comps, some guests will book rooms at multiple hotels just to get free play, meals or other comps made available at each property. They’re just taking advantage of offers that are provided by the Total Rewards system. That system will be changing in the future.
While this might appear like an attack on all Total-Rewards members, it’s really just against the small percentage that take advantage of the Total Rewards system. Caesars wants their loyalty program to reward customers that are loyal to them and not just looking for a freebie. I see this being similar to drink monitoring systems. Nobody likes the system but the goal is to ultimately reward the customers spending money.
Wynn Also Changing Rewards
Lost in the excitement about Wynn Paradise Park last week was a statement made about players club members by Steve Wynn. The iconic casino operator said, “We don’t comp people who don’t play.”
Casino players clubs are supposed to rewards players (customers) who play (spend). However, Wynn has changed their rewards policy. Promotions and comps for all guest are now based on current trip play according to Steve Wynn. Previously comps were based on previous play.
This isn’t an entirely new policy. I was a guest of a high roller a couple of years ago. He was able to get my group discounted rooms but nothing complimentary up front. Each guest had their folio reviewed at the end of the trip and received an appropriate discount based on spending from the week. Everything would have been comped if any of us were high rollers. We’re not high rollers and this was fair since none of the guest group had a history with the casino.
It appears as though this new guest policy is being applied to all guests. Loyalty in Las Vegas is taking an interesting twist. While there are some rewards based on long-term loyalty the analytics of the businesses seem to be rewarding recent and immediate spending.
Caesars Has A Total-Rewards Problem
The players/loyalty club has about 50 million members. They want that number of Total-Rewards members to increase rapidly so they can license their brands like Flamingo, Harrah’s, Caesars, etc. On their recent investors call, they stated that the goal is to make Caesars Entertainment similar to hotel companies like Hyatt.
In an effort to grow their premium customer base they are including Diamond tier memberships as part of other membership packages. Memberships for clubs like the FoundersCard are great but they help overpopulate this higher tier. Caesars has also even been known to “give away” memberships for promotional purposes and via status matches. VIP members are worth more than entry-level members, so increasing the number sounds good but it dilutes the product.
Customers spending thousands of dollars expect to be rewarded more than customers spending hundreds of dollars. Caesars is caught in a bit of a quandary here. They want more (premium) Total-Rewards members but they want to reward their best customers. Minimally, this is a challenge. At worst, this is a problem.