Is Cheaper More Expensive When It Comes to Casino Guest Service?

According to Cornell University research, the cost of replacing the average hospitality industry employee is $5,000.  Most research shows that employees want improved communication and recognition above and beyond an increase in pay.  The average player is worth an amazing amount of money to most casinos, and the marketing cost alone to replace players is staggering.

Here is why I am sharing these simple facts with you.  As they run their day-do-day business, many casinos are doing what they think is right.  They’ll also take the easy way or cut corners and still think they’re getting it right.  If they’re wrong, it could be costing them dearly.  For example, I seriously doubt casinos truly understand the burdensome cost of employee turnover and that it can be reduced with a well-planned recognition program.

Please don’t get me wrong.  I’m not suggesting I own all the seats on the smart bus.  But I do have a high level of confidence that my team is very knowledgeable in our area of expertise.  We have learned from our mistakes the last 15 years and that’s why I say some casinos may “think” they are doing the right thing.  The problem is they don’t know what they don’t know.

Casinos cannot afford to get it wrong when they look at improving their guest experience.  I say often that improving service doesn’t cost, it pays.  This is true, but if the improvement is done poorly, it can cost your casino more than you can imagine.  Lost play because of poor service can cost your casino millions.

We see three critical areas that casinos need to assess when they look at the big picture of  guest service.  They are employee orientation, guest service training, and reward and recognition programs.  These areas are important because they can have both an immediate and long-term impact on your casino’s bottom line.

Let’s start by talking about your orientation.  For many casinos, orientation is an eight-hour session that, in reality, is seven hours and 55 minutes of how to get written up or fired.  It’s all about the “regs” and what not to do.  In the final five minutes, new hires are told the casino is committed to service and teamwork and that they should go and have fun.

I don’t know about you, but that is not the way to get me to buy into the idea that this a different place to work and that I will be treated as a valuable asset.  The orientation alone could cost your casino two people per session.  I repeat – Cornell says it costs $5,000 PER AVERAGE EMPLOEE to replace hospitality workers.  Cornell says it costs nearly $10,000 to replace a hospitality employee who holds a complex job.

There is something else you should look at even before the orientation.  You should review how you select your new hires and whether you give them a realistic job preview.   You need to know the characteristics of the people who succeed and hire more people like them.  A realistic job preview should be you’re A-1 top priority.  I hate to break it to you, but most people who aspire to work at a casino think it’s like what they see in a movie or on TV – only good looking, socially developed people come to play.  Get real.  Prospective hires need to know about people losing lots of money and drinking to excess.  And those aren’t even the challenging players.  Selective hiring, realistic job previews and effective orientations – that’s a great combination that can lead to outstanding guest service. 

Now let’s look at guest service training.  Again, if done poorly, the training can be a morale cyanide pill.  Bad training demoralizes employees and actually can increase turnover.  But, hey, everyone is laughing when the GM walks into the session, right?

What are the learner outcomes?  What decided them?  Who measures them?  Who can give honest feedback about what is working and what needs to be fixed?  News flash:  the answer is not the training department.

The final area is your reward and recognition program.  Some casinos have really generous programs.  Please note I said generous, not good.  Just because employees get quarterly checks or a chance to win a new car doesn’t mean the program meets your goals.  How do you measure your program?  What parts are working?  What parts need improvement?  What should be scrapped?

All too often these programs turn into an entitlement because management thinks they have to give the employees something.  This is not good for long-term success.  I’m a free-market guy, so I think people should be rewarded for achieving predefined goals.  If they don’t, they should be educated so they can achieve them.  Handouts don’t work and never have.

Now a few tips on conducting your assessment. 

In “Rich Dad, Poor Dad,” the author spends some time talking about using OPM and leverage.  OPM is Other People’s Money.  His view is that you use a bank’s money to buy more real estate.  I like the idea of leveraging OPM to make your business better.  When I looked online for things a casino can leverage, I found one I liked – Other People’s Mistakes.  When it comes to doing your assessment, you want to learn from other people’s mistakes.  I have a friend who said he would learn from others’ mistakes in 2010 so he didn’t have to make his own.

In “The One Minute Millionaire,” the authors talk about leveraging Other People’s Experience.  This is very strong, too.  When it comes to assessing your guest service and really tearing into your orientation, training and employee recognition, you want to have third-party experience to draw from.  The book says it could take 10 to 20 years to reach the same level of experience.  Waiting a decade could be a very expensive proposition.

By now, I think you know the answer to the question posed in the headline for this column.  Cheaper definitely can be more expensive.  Getting it right takes an investment of money and effort, but that’s why it’s an investment.  It pays off.

To read other articles by Martin Baird, go to

Martin R. Baird
Robinson & Associates, Inc.

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