Vegas has a lot going for it. It’s filled with integrated resorts boasting huge gaming floors, luxury hotel rooms and endless entertainment options—shopping, nightclubs, shows, restaurants, and museums—that are within an easy walk of each other. Plus, it’s a big convention town and airfare is generally pretty reasonable.
So far, Vegas has remained relatively insulated from the impact of Airbnb as most travelers tend stay somewhere on, if not very near, the strip. But that’s not to say Airbnb won’t eventually impact Sin City, and casino hotels should be analyzing the data in preparation.
“Up until two years ago, home-sharing businesses were basically dismissed as competitors,” says Mehmet Erdem, Associate Professor at UNLV Hotel College. “But if you look at their growth across the broad spectrum, home-sharing businesses are now taking a sizeable piece of today’s market share.”Casinos must use data to make smart revenue decisions Click To Tweet
More than 340,000 people stayed in Airbnbs in Nevada in 2016, according to a study cited in the Las Vegas Sun. Hosts in the state took in $47 million, with most of the business centering in Las Vegas, and the number of guest arrivals represents a 151 percent year-over-year growth.
Even so, Erdem doesn’t believe Airbnb and the like will impact Vegas’s integrated resorts in the same ways they have impacted hotels in other regions. Here’s why.
For the most part, Vegas is not a family vacation destination. It’s too expensive and logistically complicated. And large groups—business or leisure—tend to want the amenities and convenience of an integrated casino resort.
“Casinos are leaders and pioneers in hospitality,” says Erdem. “They will not dismiss Airbnb and other home-sharing businesses. Instead, I expect casinos to get innovative and find ways to collaborate.”
Maybe that means offering a place to hold luggage until the home is ready. Or maybe that means offering a backup option for guests in case of disaster or power outage.
While collaborations and partnerships like these could be useful, challenges remain. Airbnb doesn’t have a centralizer so an owner can randomly drop their rates at will. According to Erdem, this is where things could drastically impact casinos.
“If a property lowers the rate because a group of Airbnbs are offering a lower rate, it could take three or four years to recover from that drop,” says Erdem, adding that it’s critical for hotels to look at their data and make smart revenue management decisions based on that data—not on Airbnb rates.
The long-term risk, he explains, is in how the sharing economy is changing consumers’ shopping behaviors.
“We have to pay attention,” says Erdem. “As levels of comfort evolve, casinos must watch how and from where guests are booking to better understand what gets them to choose their casino.”
So what’s the immediate action plan, according to Erdem? “Casinos need better analytics and data to make decision making more robust,” he says. “The pace of the consumer is also getting shorter and behaviors are changing. So we need systems and strategies that can adapt and change too.”
- Casino Revenue Managers are Key to Personalizing Offers
- Why Real-Time Data is Critical to Casino Profits
- Data Sharing, Communication are Keys to Casino Revenue Strategy
Latest posts by Joanna DeChellis, Contributing Editor (see all)
- Is Online Gaming a Done Deal in PA? - August 9, 2017
- How Smartphones Can Improve Casino Loyalty Programs - July 12, 2017
- Casino Revenues are on the Rise Around the Globe - June 7, 2017