Well, here we are, still dealing with the unpredictability in our business with the COVID-19 pandemic hovering over our heads. Casino entertainment is walking a tightrope. We all know and understand that entertainment is part of every casino’s brand and helps drive guests to your property. However, it’s time to really determine your strategic plan for your entertainment programs going into 2022.
To add to this complex, convoluted environment, major artists are dealing with their own internal health issues. Recently we have had several shows cancelled and rescheduled because of positive COVID-19 tests within the artist entourage. In one case, this cancellation happened only 48 hours before the scheduled concert. There was considerable money lost in marketing and advertising that wasn’t going to be refunded. The shows got rescheduled, but what a mess.
So, it’s time to add to your entertainment playbook.
Time to figure out your plans, big picture, and look at different approaches. With regards to touring artists, you simply must plan for the COVID-19 contingencies. Make sure that you are watching the artist’s touring schedule and make sure that you check in often with the group’s tour manager and agent. Watch closely the dates building up to your date. Be prepared and aware. Make sure that you have clear protocols internally with your team and with your vendors who are working your shows. More and more artists are requiring that anyone coming into contact with them needs to show a negative COVID-19 test prior to contact and masks are mandatory. The bigger touring groups even come with their own testing people.
Let’s talk about some strategies going into 2022.
Have you considered off-day shows? Those Friday and Saturday night shows typically crowd out your weekend guests, so why not work at establishing Thursday night or even Sunday night shows? This is pretty much a time to reboot things, so what can you lose here? If you look hard for unique and entertaining programs/artists, you don’t have to spend the big money. Your financial risk is less and more workable. You can comp more of your higher tier players into the shows and produce successful events. Game shows tend to really do well here. Get your players club people involved and dial in your core guest. The right entertainment event catered to the right guest will always be a winner. Even in these crazy times, people will make a point of coming to an event that is unique and not the same old, same old.
I completely understand the desire to have that big-name show and have your property make a big splash. Those big-name shows are still real and possible, but should only be looked at when the routing, the price point and the day of the week work for your strategic plan. Otherwise, you are on a slippery slope.
More and more today, casinos are looking at a more promoter-based approach.
In that we offer a strong guarantee with a backend split after all the expenses, including the artist fee, are accounted for. I know this sounds a little complicated, but if you determine your scaling and your gross potential revenue from ticket sales, that’s the first step. Determining your expenses is a little trickier. Get your production costs, all the artist-related outside costs and any miscellaneous costs, and try to get a figure you can live with for the show. For instance, if your gross ticket sales are $100K, your artist cost is $50K and your expenses total $35K, then there is a $15K profit that can be split with the artist. This could be a negotiated split of anywhere from 50/50 to 90/10 or even 100 percent to the artist. This kind of approach was never seriously looked at in the past because casinos used entertainment more as a loss leader. They comped a lot, so the door revenue was never attractive to an artist. In this model, the casino has to limit their comps to a very small number and will need to account for those comps like they are actual revenue.
I know this all sounds confusing, but it’s a direction that is starting to happen. This opens the door for a little less financial risk and a shared revenue opportunity. It also means that the artist is sharing some of the risk and will more likely be more involved with their own marketing team and social media platform. The major agencies have already open marketing departments to support their artists, once dates are booked. So I believe that it’s a trend we will see more of going forward.
In conclusion, be creative and be diverse. Follow the trends and follow the clues. Too often we all get trapped in our daily, complex world and we fail to see opportunities and changes. 2022 will be a challenge, and let’s hope for the best for our business.