Casinos Often Measure Wrong Thing When Trying to Determine ROI

Casinos typically measure the wrong thing when they try to determine the return on investment they make in internal improvements designed to boost revenues, but there is a solution to the ROI problem.  Slots managers claim that improved casino performance is the result of a new mix of gaming machines.  Better guest service can lead to higher profits, but how can that be measured?  It isn’t the result of internal changes, but the chief executive officer often attributes higher revenue to the area’s growing economy.  Weather – good or bad – has been pointed to as the source of increased revenue during the past quarter.  But the only true ROI on internal improvement comes from creating guest and employee advocates and measuring how many the casino has.  The more it has, the more successful the property will be.

Martin R. Baird
Robinson & Associates, Inc.