When it involves choosing non-gaming amenities for the trendy casino resort, there are plenty options for operators to think about including golf courses, water parks, nightclubs and shopping malls. However, essentially the most financially feasible and lucrative of a lot of these non-casino choices are hotels and parking garages, consistent with a panel session entitled “Economic Diversification: Non-Gaming Amenities and Beyond” that came about yesterday on the Global Gaming Expo (G2E) in Las Vegas.

“From an investor perspective, the casino remains the industrial engine of the resort property… it's the thing that should be maximized,” said Kristi Jackson, chairman of TFA Capital Partners. “So with this attitude in mind, whilst you take a look at non-gaming amenities, a hotel must be on the top of the list because it can best provide incremental revenue for the casino.”

According to Jackson, a properly designed and sized hotel that may be operated using a data-driven strategy can generate upwards of $200-$300 in incremental revenue from a customer per night. If this hotel also averages 90 percent occupancy, it may produce an ROI in only many years; making it extremely attractive to investors.

“There is plenty to speak about when considering non-gaming resort amenities—where the valuables is located, what the contest has and what customers want,” Jackson said. “But what most investors wish to see is a hotel.”

Rich Emery, president and design principal for Thalden Boyd Emery (TBE) Architects, concurred with Jackson’s observation concerning the value an hotel addition to an existing gaming resort, citing a study his firm recently conducted that examined the incremental gaming drop generated by certain non-gaming amenities. Consistent with this study, hotels increased casino drop by 20-40 percent, along with the revenue created directly by the hotel.

The non-gaming amenities that produced the top increased drop for a casino were, surprisingly, parking garages, which boosted drop by 74 percent. “Most operators will say they refuse to invest in parking garages since the return on investment isn't there,” Emery said. “This isn't the case. A parking garage makes gaming less demanding to the shopper. It could possibly take one of the most worst weather days with rain, snow, sleet or extreme heat and cause them to profitable.”

And the amenity that generated the least when it came to casino drop? Golf courses, which produced a paltry 4 percent average uptick. “Everyone wants a gold course and infrequently it makes sense, but on average it does not,” Emery said. 

Read More... [Source: Gaming Industry News]