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StumbleNo gambling required: Harrah’s widens rewards program
Tuesday, April 27, 2010 | 2 a.m.
John Coulter
Total Rewards
Harrah’s Entertainment recently expanded its rewards program to nongamblers. Customers in the program can now earn a reward point for every dollar spent in stores and restaurants at Harrah’s casinos. Although the largest chunk of overall casino revenue is generated by gambling, that amount is falling as other segments, including rooms and drinks, grow.
Caesars Palace guest Laura Sides (left) visits Qua Baths and Spa to redeem her Reward Credits with Spa Concierge Elizabeth Dhanis.
Sun Coverage
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- Harrah’s secret: Cut costs, back to basics (3-5-10)
- Harrah’s debt gamble (2-15-10)
- Harrah’s gets OK for Planet Hollywood purchase; job cuts planned (2-3-10)
- Harrah’s to take over Planet Hollywood management (1-15-10)
- Harrah’s buys Planet Hollywood debt (9-15-09)
- Harrah’s expects annual savings of $500 million (3-17-09)
- Harrah’s reports loss, says LV properties hit hard (3-13-09)
- Harrah’s announces plan to reduce debt burden (3-4-09)
- Strip building boom, buyouts were ill-timed, and many see more pain in ’09 (3-1-09)
- Harrah’s wants class-action suit over debt swap dismissed (2-27-09)
- Harrah's hit with class-action lawsuit over debt plan (2-16-09)
- Harrah’s seeking $740 million from credit line (2-13-09)
- Harrah’s makes cost-cutting moves (2-12-09)
Beyond the Sun
When Laura Sides and her husband visit Las Vegas, he gambles while she spends money on pedicures, massages and shopping.
“My husband doesn’t do any of that stuff,” says Sides as she strolls out of Caesars Palace’s Qua spa with freshly painted toenails. She’s on her way to meet her husband at a craps table downstairs.
Sides is among each day’s tens of thousands of people who spend more money on other activities than they do on gambling while they’re here.
Las Vegas has grown increasingly dependent on business from people such as Sides, whose money is just as crucial to the resort industry as her husband’s wagers are. And yet, in the traditional hierarchy of loyalty programs, casinos placed more value on her husband.
That changed in a big way when Harrah’s Entertainment last year expanded its Total Rewards program — a membership group that allows gamblers to earn points that can be redeemed for gaming rewards and nongambling products and services.
It’s a sea change in how the world’s largest casino company, which generates about 80 percent of its revenue from gambling, views its customers.
In years past, the company’s CEO proudly explained that his company discriminated against people who don’t gamble. The company’s Total Rewards gamblers have always gotten special treatment — seated quickly from a fast lane at any of the casinos’ buffets while everyone else waits in long, slow lines, for example.
Total Rewards uses real-time data to track what gamblers spend and offers them enticements to stay and spend at Harrah’s properties. The company has poured millions of dollars and years of research into the customer loyalty program, which customizes discounts and other perks based on how gamblers prefer to redeem points.
With Total Rewards, Harrah’s pioneered what has become a cornerstone of the gambling business for casinos of all sizes. Much like gambling itself, the programs play on people’s desires and aspirations with multiple levels, or tiers, based on how much people spend. The more they gamble and lose, the more points and other benefits they receive.
In recent years, Harrah’s realized that it needed to expand the program to nongamblers. The company discussed the idea years ago, but only started work on an expanded Total Rewards program after acquiring Caesars Entertainment in 2005, says Matt Bowers, vice president of Total Rewards and Promotions.
“We saw some dramatic nongaming spending going on away from a slot or table game. We realized there were a lot of really good customers out there who we didn’t know much about.”
And in the casino industry, the greater the knowledge about a customer, the greater the competitive edge.
Although Harrah’s casinos were focused on gambling as the main attraction, resorts acquired from Caesars, including Caesars Palace and Paris Las Vegas, had less-advanced gambler loyalty programs with customers who didn’t gamble much. In fact, some customers didn’t gamble at all.
“The (Caesars acquisition) reinforced what we already knew,” Bowers says. “There are people who love the entertainment and fun of Las Vegas, but they don’t like to gamble.”
That’s painfully obvious in today’s Las Vegas. The largest chunk of Strip revenue still comes from gambling, but that amount, which was 39 percent last year, is falling while other segments, such as rooms and drinks, grow. The latest annual survey from the Las Vegas Convention and Visitors Authority found that 17 percent of visitors don’t gamble — a record high in the three decades the agency has conducted surveys.
Moreover, 49 percent of gamblers, up from 47 percent the prior year, said they gambled for the least amount of time possible during their trip, or two hours or less. The primary reason for not gambling wasn’t lack of time or money — 39 percent of nongamblers surveyed called gambling “boring.”
Still, elevating noncasino purchases to the level of gambling dollars is a cultural shift in Las Vegas, where gamblers have always been the most important customers.
Some customers say that view has been held for too long, and it’s not only antiquated but annoying given the multitude of loyalty programs that reward travelers with free stays at hotel chains worldwide. Until Harrah’s initiated reward points for hotel stays, people who didn’t gamble couldn’t get credit for staying in a Harrah’s room.
Harrah’s customers can now earn one reward point for every dollar spent on a nongambling purchase at stores and restaurants in its casinos. (Retailers and other attractions in attached venues not owned by the company, such as the Forum Shops at Caesars, don’t accept Total Rewards cards.)
Customers earn more credits by gambling, although Harrah’s keeps such conversion rates, which are different across the country, confidential.
Harrah’s executives knew expanding Total Rewards wouldn’t be simple or cheap.
Before the recession, the company began spending millions to update its software at hotel registration desks, restaurants, bars, gift shops and showrooms. The investment has continued, hurting finances at a time when it is offering giveaways to more of its customers.
But Total Rewards is credited with improving profits at casinos purchased from competitors.
Harrah’s isn’t the only casino giant upgrading its loyalty program, however.
About a year ago, Las Vegas Sands updated its Grazie program to allow members to earn points by charging purchases at stores as well as meals, drinks and entertainment to their rooms. Customers can use points to advance through tiers and access bigger discounts, comps and upgrades. Customers can’t use these points to buy meals or make other nongambling purchases, however.
The update has proved popular with customers, spokesman Ron Reese says.
MGM Mirage, which owns the largest share of resorts on the Strip, is revamping its rewards program to better track gamblers and reward them based on preferences.
Recognizing that its loyalty program isn’t as advanced or well-used as it could be, MGM Mirage recently hired two consulting firms to help upgrade it. The company intends to eventually reward nongamblers for purchases, representatives say.
Anthony Curtis, publisher of the Las Vegas Advisor newsletter, says expanded benefits make sense given the increased importance of food, drink and entertainment revenue.
Harrah's Entertainment has begun a Total Rewards program in which members can earn and redeem points on activities such as shows and dining, as well as gaming.
But in Harrah’s case, he doubts it will get much boost from the nongambling program given that it’s much easier to amass points needed to earn perks by gambling.
“The overall effect is probably minor. Nobody that I know of has asked about this program or discussed it, and I don’t see Harrah’s trumpeting this,” Curtis says.
Total Rewards’ expansion is months old, but it has been low key. At Caesars, for example, a Total Rewards counter features new brochures tucked behind the usual ones for gamblers. The new brochures feature slot machines and spinning roulette wheels on top, with a woman in a lounge chair and a couple enjoying dinner shown below. A small video screen behind the counter also advertises the expanded program, but the text is hard to read.
Bowers says, however, that Harrah’s is tracking millions of dollars’ worth of noncasino purchases not previously registered through cards. The company says it can’t say how many new members were the result of the expanded program. All told, membership includes about 8 million people who have gambled at Harrah’s properties over the past year, it says.
Last year, Harrah’s began training front-desk employees at its U.S. casinos to discuss the program expansion.
In the past, many customers wouldn’t sign up for Total Rewards because they said they didn’t intend to gamble or wouldn’t gamble enough to make the membership worthwhile, says Kaitlin Riggio, a hotel manager at Caesars.
Now, however, most guests are signing up because they will be “getting credit for something they’d already be spending money on anyway,” Riggio says.
Upstairs at Qua Baths & Spa, Director Chrystal King says business is up from last year and many customers are using their Total Rewards cards.
The spa’s hushed lobby has no marketing brochures about the program, though. Until a spa employee told Sides about it, she didn’t know she could earn reward points for purchases outside the casino.
“It’s a great idea and a nice perk,” she says as she hands over her Total Rewards card to redeem points earned at the craps table.
“I think I’ll come back for a massage.”
Discussion: comments so far…
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Wake Up Las Vegas Corporate fools! GAMBLING is what Las Vegas is all about..or at least it used to be. Track the husband's gambling, and give the wife whatever she wants, but keep the gamblers in the casino. I don't care what some idiot corporate consulting firm say's about Total Rewards and non gambling activity in Las Vegas, the decades proven formula for success in Las Vegas is comps based on play, generous comps at that! Other cities can enjoy profits based on dining, hotel rooms, and entertainment, however the star in Las Vegas is the Green Felt Jungle! keep it that way and the Honeymoon profits will return to those hotel executives who understand what Las Vegas is all about.
Congrats to Harrah's for being the leader in rewards programs. I called to book my room in January for a May stay, for 5 nights, and when my wife and I combined our accumulated points, our entire stay was comped! Its the old Vegas all over again and couldn't be more thrilled. Obviously, I will spend more, and stay longer for their generosity!!!
Attempt to widen offers is good for customers
What is important that how much pirk are they willing to give out. My guess is not much.
my buddies and i spent a long weekend in myrtle beach sc on a golf vacation last march. vegas is too expensive and most of the courses are high end. if the resorts started golf packages they might be able to compete with myrtle, which has over 80 golf courses and decent weather.
It seemed like I had accumulated a nice pile of Total Rewards points but when my account was idle for a few short months my points expired. If I had read the fine print, I would not have bothered with chicken _ _ _ _ promotion.
......while everyone else waits in long, slow lines, for example....
Perhaps the long slow lines are just one of the reasons business is down?
From American Heritage:
Gimmick: 'An innovative stratagem or scheme employed especially to promote a project: an advertising gimmick'.
The REWARDS card says allot about the psyche of the American consumer.
After losing $2,000-$3,000 during a 3-5 night stay at a casino - and then be filled with GLEE because your room/food/beverage was COMPED, is a simple dose of snake oil denial to make you feel better about getting your clock cleaned on the casino floor.
Rewards Loyalty? - Yep, that's the best part! Keep you coming back for more "free" Ribeye and Heineken- Yummmy!
The actual cost basis for the comps? Probably $ $25-$35 per person, per day....or one hand of blackjack!
Harrah's reward program really seems to be the best. I don't play any casino games except live poker. Like most casinos Harrah's credit your card with $1/hour played. It isn't really that much but it adds up. It is really nice to be able to take that Card to any harrah's property and pay for your meal, room or anything else you purchase from a harrah's owned entity with the credits on your card. I amassed nearly 300 hours before ever using the card, and now it seems no matter how little I play, there is always enough credit to grab a a free bite to eat without having to ask a manager for a comp slip. In some cases, like the Riviera who also give you that $1/hour, you have to beg a manager or pit boss to actually write you the comp on time they already say you earned. When I had $300 of earned comp dollars at the Riviera and was turned down for a $4 comp slip when I had a craving for a piece of banana creme pie, i decided to never play there again. Making a person ask for what you have already told them they earned, then denying them of it will never keep a customer in you establishment. There are some great employees in the Riviera but their management and supervisory staff is the worst ever and the Riv's fall from profitability can be more attributed to its people and policies than to the bad economy. They had very little debt to service, a great location being so close to the convention center and should have been able to survive with their already cheap prices, which nearly everyone coming to vegas is looking for again. These days even on the busiest weekends, the Riviera is a ghost town because they treat their customers like pooooo.
'The largest chunk of Strip revenue still comes from gambling, but that amount, which was 39 % last year, is falling while other segments, such as rooms and drinks, grow'
Well duh when some moron is paying 500 bucks for bottle service this statement becomes true, but they make it look like gambling is on the decline
Agree with environprotector, bring back some loose slots, 3/2 blackjack, better comps and free flowing drinks and I can afford to spend more, and play longer!
So tell me doubledown, what do you think is fair for the dollar amount of comps? Let me guess, if you lose $1,000 you want $1,000 in comps, right? How would a Casino stay in business with this thinking? If you owned a store and someone spent $1,000 on your merchandise are you going to give them a voucher for $1,000 to use on their next visit? Everyone thinks just because its gambling that they are owed something if they lose. Do you have that same opinion when you go spend $1,000 on a Dolce&Gabbana purse that was made for $25? Are you expecting something for free when you spend $75 on a steak that cost the restaurant $20? When you step into a Casino you are taking a chance at winning or losing, you made the decision now live with it MORONS!!!!
Don't bother with using the Harrah's points you accumulate if it is longer than 6 months ago. We visit Las Vegas once a year and discovered that points from our last visit expired and we need to start over with a 0 point balance.
I'll be shopping around for other rewards programs with better terms...
A "fair" comp rating would be this:
Average bet per game , multiplied by the number games/hour , muliplied by the number of hours, muliplied by the average house advantage= expected theoretical return for the house / loss for the player.
Off this amount, I would say a 20 per cent kick-back would be nice and fair.
Example: 25 dollar b-j, 2 hands per game, 50 hands per hour= 2500 usd average amount bet per hour. 3 hours play= 7500 usd average wagered amount. 1 per cent house edge= 75 usd. 20 per cent of that is 15 dollars.
So, a 25 dollar player should at least get a buffet comp after playing 3 hours. In fact, I think the casinos these days are more generous than that, hoping (betting) that the player will return after dinner, trying to win some more.
Total Rewards sucks! Your points expire after a few months and the casual gambler gets nothing. I have gotten more out of MGM Mirage with room deals from Excalibur, Luxor, Mandalay Bay, etc for the card holder. In fact, I was comped two nights at Gold Coast for very little points with BConnected. Off the strip is the way to go if you want to be rewarded; buffet deals, free rooms, not to mention point multiplier days for slot gamblers. I've only been to Sin City 4 times and have been able to see the sights of Vegas by stretching my dollar at Gold Coast, The Orleans, and Terrible's. While I like MGM, Aria at City Center is an example that gaming has been the lesser of the priorities in new establishments. You have to squint to find the machines. I like spending much of my time at the machines, paying only a dollar for a drink, not 5-8 dollars at the bars. I expect to be rewarded for it. Doesn't happen with Harrah's.
environprotector, and sportsbet10 -
Well it sounds like Harrah's has reformed its TOTAL REWARDS business model to make better use of the excitement of the Strip, and the gambling draw of Las Vegas - to foster better CUSTOMER SATISFACTION and reap the economic benefits of increased customer participation and loyality.
This far-reaching policy revamp should entice Harrah's current customers (and others) with new and exciting REASONS to stay, shop, gamble, eat, and play at a Harrah's hotel/casino.
TEN YEARS AGO, The LVCVC noted, and hotel/casinos revealed, that their TOTAL corporate revenues were EXCEEDING gaming revenues by over 50 percent - for the first time ever. Well, it has taken Harrah's (and others) 10 years to figure out the VALUE of implementing a more encompassing, and favorably competative, rewards business-model.
"This could be the beginning of a beautiful friendship" between Harrah's and its customers. Further, such diversification to earn rewards may well be a way towards ECONOMIC RECOVERY for Harrah's (and all of Las Vegas).
Giving something back to the customer for spending their money ANYWHERE in the hotel or casino - is a perfect addition to what Las Vegas USED TO DO.
COMPS were given for many levels of gambling activity - sometimes, just because they liked you. There were also great entertainers and shows, free promotions, specials on meals, etc. - - Casinos "made offers their customers couldn't refuse" - and they didn't. These were VERY profitable business practices.
As mentioned herein - those things are what MADE LAS VEGAS FUN! And when people are having FUN, guess what: they spend more MONEY.
This mystic and allure of Las Vegas existed for more than 50 years, but is "watered down." these days.
So it makes business sense to do what airlines, VISA, and major stores have been doing for many years with rewards programs - with one objective: to get the customer IN THE DOOR.
THEN to keep them coming, "Give 'em what they want."
So, if such rewards programs DO NOT BECOME "con games," with unpalatable RESTRICTIONS (as some noted herein), the new Harrah's Total Rewards program may reduce the level of estrangement that it seems NON-gamblers may have felt - and enable Las Vegas to once again be seen as the place to be:
"One Exciting City, in One Amazing Place.
They never get tired of fleecing the chumps.
Total Rewards (TR) is just an OK comp program in my opinion ; in Vegas, MGM Mirage's Players Club has been much more player friendly, in my experience. It's true that $25+ minimums are required by MGM MIrage (usually) to get rated for comps.It's a good marketing ploy for TR to add these non- gambling extras to it's program..ultimately, they'll make more money but not from me. I go to Vegas to gamble, and MGM Mirage has been much more productive for me. Relatively, it's more beneficial than TR in terms of straight gambling comps. If my wife went to spas, shopped a lot, and involved herself in other nongaming activities, I might have an alternate opinion of TR. Blackjack players GENERALLY can also find better games (player-favorable rules) at the MGM Mirage properties vs Harrah's. And no, I'm not employed by MGM Mirage.
Cheers...
Whoopie. Harrah's is giving 1 point for every dollar spent. So if I spend $5000 on rooms and food I got a whopping $50 in points. (1 point = one cent in comps). I get 5x that rate on my Shell Mastercard.
Shopping in Vegas with your earned points may sound like fun. But the fun stops once you make it to the airport. The airlines are charging ridiculous overweight fees that shopping and carrying all that stuff back where you came from is no longer funny. I saw a group of Spanish tourists on their way back home. They all seemed to have loved shopping but it cost them about 300 dollars to check their bags at the airport, that's about 75 dollars apiece per person. Which is truly robbery.
When I went to Vegas this March I made sure that my bag was not heavy. I had about 10 lbs space but when I left Vegas, I was just under the allowed maximum, and therefore I didn't have to pay anything. But I think I hardly did any shopping at all. A few T-shirts, a few free caps, multi-vitamines, and you're at the maximum weight allowed. I wonder how free "free shopping" really is. I will only use my points for dining and perhaps onwards the room bill, but certainly not for carrying heavy items back home. So much about shopping in Vegas.
So they are giving points for spending money in other parts of the hotel. Whoopee! Harrahs is still the cheapest and worst run corporation on the strip. Walmart mentality at its finest. Oh, and no brochures at the front desk. They just fired a 20 year or better employee from the front desk for allegedly upgrading a room for a guest. Go figure! This woman had been the " Employee of the year and had even won the Chairmans Award", the highest award given an employee in all their properties! Harrahs has no loyalty to their staff and certainly no loyalty to their guests or they would provide a proper number of staff to service them. The supervisors are watching 8 games or a whole pit so it is next to impossible to get rated properly to get your comps! I just read an article thattheir profits are down this quarter, then how are they buying property after property and crying about their losses as they continually take benefits away and reduce the staff. Harrahs sucks!
Let me see if I understand this: You get points for playing their ripoff casino games and you get points for buying their ripoff food and drinks? Come on now. Sounds like the big bend over in the long run.
There is NOTHING free in this town anymore. The cocktail service has gone from bad to worse. You'll be lucky to get one free drink, which will cost you at least $20 in gambling to get.
Most of the buffets in this town stink. The food is cold, overdone, and lacks any flavor at all.
The one exception is the Wynn. Otherwise, stick to Claim Jumpers or Outback. And play video poker at your local bar.
I have a bridge in Brooklyn that's available for sale, cheap!