Casino hotels and resorts are once again in the black as stronger consumer spending and international tourism have helped break the industry out of a recession-induced cold streak. In one of several new profiles on growing industries, the D&B industry team explores challenges and opportunities facing the Casino Hotels sector.
The profile provides insights into the industry’s growth prospects as major operators in the $55 billion US market look to replicate the allure of popular Vegas Strip landmarks in new markets around the world. Macau, a special administrative region of China, has become the world’s largest gambling market, thanks to heavy investment from both domestic and international casino companies. Developers are also opening multibillion-dollar Vegas-style casino resorts in Singapore and the Philippines to attract local and international gamblers, putting additional competitive pressure on casinos in North America and Europe.
In the US, casino hotel operators are taking creative approaches to broaden their appeal:
New Attractions Target Younger Gamblers — Casino hotels are introducing a variety of novel attractions and marketing strategies to attract younger gamblers as the industry’s core clientele gets older. Millennials are entering their peak earning and spending years, but the demographic has proven elusive for the gaming industry. Many establishments are modernizing their casino floors by adding larger bars, restaurants, and nontraditional amenities like tattoo parlors and event spaces for hosting mixed martial arts competitions. And because younger consumers tend to be less interested in slot machines compared to previous generations of gamblers, casino operators are replacing slots with popular table games like poker and blackjack.
While casino hotels have significant opportunities for growth, they also face a number of challenges. The industry depends heavily on consumer spending, and economic recessions can cause gaming revenue and leisure travel to decline significantly. Tight credit markets can also make it difficult for operators to make capital improvements or expand operations.
Other key business challenges facing the industry include:
Dependence on Regulators — Casino hotels are heavily regulated by state and local authorities. In states where gambling is legal, state commissions oversee gaming companies and have broad powers over their activities. State legislatures can easily raise tax rates on gambling machines. Municipal governments set local hotel-occupancy tax rates and may require various other fees for lodging establishments, which also must abide by building codes, zoning laws, and business-permit requirements. At the federal level, the Internal Revenue Service requires casinos to verify and report customers’ winnings for tax purposes once certain daily thresholds are reached. Continued industry growth depends on favorable legislation.
D&B’s Editorial team regularly adds new industry content while constantly updating existing profiles on more than 500 industries. Recently added new profiles of other fast-growing industries include Mobile Food Services and Marijuana Stores.
D&B industry profiles provide insights to guide sales and marketing professionals in their business decisions. The profiles contain comprehensive financial benchmark information as well as industry growth forecasts in an easy-to-digest format. Call-prep sheets, an abbreviated version of the profiles, provide a quick way get up to speed on an industry. D&B industry content is available in Hoover’s, First Research, D&B Direct, and other D&B products that serve enterprise and small-business professionals.
Rob Heidrick is an industry editor on the First Research team. He covers food and beverage manufacturing, hospitality, and recreation, as well as the government and education sectors. Rob is also on the First Research social media team and an editor for Bizmology.