Can You Afford to Skip the Casino Feasibility Study?

The idea of ​​developing a casino is often driven by circumstances such as having suboptimized space in a hotel lobby, the need to fill a gap in hotel occupancy, or the availability of a license as part of a tourism investment scheme. Too often the idea takes on a life of its own and the next steps are creating a casino layout (perfectly suited to the development team’s perception of what players want) and starting construction, followed by construction. search for casino management. The problem is that there are common misconceptions about casinos and players that lead developers to cheat over and over again. More on that later, but let’s see how the most successful operators get things done … They start with an understanding of the market, its willingness, size, disposable income, access, competition (for all entertainment), specific market needs, and compatibility of player profiles with other users of the hotel, resort or entertainment complex. This knowledge forms the basis for the rest of the feasibility study that estimates the number of potential visitors and their visiting frequency, the length of the average gaming session, and the average stake. Extrapolating further, projections are made about capacity requirements in terms of equipment, floor area, and run times. Finally, financial spreadsheets are designed to present an informed and thoughtful opinion about earnings, capital expenditures, and return on investment. But more than just numbers, viability is about thinking about how to optimize opportunity, eliminating potential fatal flaws, and what it will take to compete effectively in the marketplace. Feasibility doesn’t have to be a long and expensive exercise by a celebrated academic. What is sufficient in the early stages is understanding whether you have a rough diamond or worthless glass chip. A professional casino consultant will be able to offer an initial viability at a reasonable price in as little as 10 business days, providing not only a point of decision on the idea or opportunity in question, but also a framework for detecting future opportunities. Let’s look at some of the traps …

 

The “license to print money” myth is a surprisingly popular assumption about casinos and seems to prevent people from doing all the usual due diligence and care that is required in, for example, a shop or opportunity selection exercise. restaurants. Examples that come to mind are as follows. A large casino was developed in a jurisdiction where there are restrictions on the maximum stakes of slot machines. Slot machine revenue expectations were highly relied upon to make the casino viable. When an experienced manager ran a slots earning capacity model several days before opening, he showed that it was a physical impossibility to generate the slots’ required income with the number of machines installed … Naturally, the casino did not comply with Expectations. A large casino developed in Britain by an American operator failed miserably because it did not understand the propensity for live games or the mobility of players in the market, while a British company failed spectacularly in Las Vegas because it did not understand the customer and what it was. made. fatal design flaws.

 

The “James Bond” image is another popular misconception about gamblers and casinos. The Pareto Principle applies largely to casinos with roughly 80% (or more) of the revenue produced by 20% (or less) of the visitors. That 20% does not correspond to people who dress formally for an occasional night out; it is characterized more by the frequent visitor who feels at home in the casino in comfortable and informal clothing. The uninitiated 5-star hotel manager is บาคาร่า สูตร  invariably appalled at the presence in his lobby of the “no-James Bond-ness”, say, of casino players. “Where is the casino manager? Obviously he was wrong about all this …” And the conflict of interest continues. The feasibility study will allow the corporation to identify these conflict situations in time to create solutions such as providing a separate entrance to the casino and differentiating the standards and prices of F&B in the hotel and casino.

 

I remember an incident in which a group of executives went out of their way to propose the development of a large caravan park on the grounds of a resort casino, about a 2-hour drive from a major city. The resort had the only casino within a 4 hour drive of town. Executives started

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