Dining and drinking are increasingly important ingredients of the casino experience, industry experts say, and all indications are that Arkansas’ new gaming destinations won’t neglect either.
The role of food and beverage service at casinos has evolved over the years, said Joe Lema, a professor at the University of Nevada, Las Vegas. Lema heads the Food & Beverage & Event Management Department at the Harrah College of Hospitality at UNLV.
“We’ve often seen in the past that the restaurants have been an amenity, but it’s actually more than that now,” he said. “It’s really part of the overall strategy. And the revenues have really increased, and the quality and so on.”
Arlene Spiegel, founder and president of Arlene Spiegel & Associates of New York, is a restaurant, retail and food service consultant who has advised casinos on their dining options, including Harrah’s Casino and Cherokee Nation Casinos.
She said it’s essential for casino operators to understand the demographics of their customers, and then to go “above and beyond their expectations. So if you have a buffet, you want to have familiar items, but you’d also want to have items that may be signature or presented in a unique, higher-level way,” adding, “You want them to be surprised and delighted.”
At Oaklawn Racing Casino Resort, which is opening a 28,000-SF gaming expansion, the new dining options will eventually include a fine dining restaurant, a family-style restaurant, a food court and a “sports tavern.” The fine dining venue, expected to be open later this summer, occupies a prime spot along the resort’s thoroughbred racing track, at the first turn, between the expanded casino and the new seven-story, 200-room hotel, all part of a $100 million project.
And the $350 million Saracen Casino Resort in Pine Bluff plans at least five distinct restaurants and dining areas, including a food court, a sports bar, a buffet, the Red Oak Steakhouse and a coffee shop.
Casino restaurants, particularly the legendary buffets, might once have been considered loss leaders meant to draw diners who then might transform into gamblers, but that is changing.
“The overall trend is for at least a break-even, if not make a profit,” Lema said. “They’ve been a big source of revenue too. At some properties, the food and beverage is rivaling on the revenue side even parts of gaming and the hotel. You can see that in the pricing. It seems to be higher than it used to be.
“And then the other twist to it is that with casino restaurants you have comped guests, and that adds a little challenge,” he said, adding that it presented an opportunity as well. Casino restaurants also want to be able to attract paying diners from the local community.
Spiegel said the industry has changed a lot, and she agrees with Lema about the increasing importance of dining and drinks to the casino business model. “Gaming is sometimes even less than 50% of the revenue stream in some environments,” she said, “so there is an eye on profitability in the other revenue streams.”
As for strategies casino restaurants use to entice diners to gamble, Lema said the most obvious is the buffet dining comp, the complimentary meals provided to gamblers, which can result in separate lines for diners who are paying and diners who are being comped. That’s the kind of distinction that’s readily apparent to casino visitors.
And that practice requires a “delicate balance,” he said. “You want to make sure that people feel that they’re being treated fairly and equally, but yet you want to get those comp guests in there quickly and get them back out on the floor gaming. So the buffet has been a strategy for many years.”
Spiegel said casino restaurants can be both loss leaders and profit centers. The higher end steakhouse or seafood house tend to be comp areas for high rollers and VIPs. “And they’re often not profitable, but if you look at the typical guest spend on property in the gaming sector, then it justifies itself,” she said.
“But I also feel that these high-end restaurants on property, it’s really a way to build loyalty,” Spiegel said. “Very often the frequent guest has a separate, climate-controlled cage where they can have their special wine stored or a cigar room. It’s a way to create loyalty and differentiate the casino’s brand by learning how to be intimate with each and every one of their customers that are big spenders, so that they don’t even think of going anywhere else.
“The dining is more than just feeding people and delighting or surprising them,” she said. “It’s a way to build relationships and loyalty.”
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