by Andrew Cardno
For tribal gaming properties, the response to COVID-19 may have been the first time many have had to close their doors since first opening. The economic impacts of these closings have been dramatic, with direct economic impacts on essential tribal services. Vaccines have delivered a light at the end of the tunnel and will allow for a new kind of normal for operations. It is important to note that vaccines and immunization do not represent the end of the virus. As tribes are planning their gaming businesses in a world where a COVID-19 vaccine is widely available, there are critical factors that will determine the future state of business.
Quarantine is a Reality of Future Travel
The virus SARS-CoV-2 is mutating, and with the vast, planet-wide spread, we can expect to see new mutations being discovered each month for years to come. Each mutation has the potential to change how the COVID-19 disease spreads, how it impacts people, and if people immunized with the vaccines are effectively protected.
The global response to COVID-19 is of critical concern, as it is only when the entire planet is protected through vaccination that the SARS-CoV-2 virus will be likely to stop mutating and evolving. In the world before COVID-19, gaming customers would travel both domestically and internationally for personal and business reasons. In the short and medium term, this travel will be limited, especially with the rise and spread of new variants.
Countries such New Zealand have suppressed the virus by implementing extremely strict travel and quarantine regulations. These quarantine regulations require all travelers to stay in an isolation hotel for two weeks after arriving in the country. In the U.S., travel restrictions apply to foreign nationals who have been in China, Irian, Europe, the U.K., Ireland, Brazil or South Africa.
COVID-19 testing is extremely sensitive and is now able to detect very low levels of infection. The challenge is that even with the most sensitive tests, an infected person is unlikely to test positive until around 5-7 days after exposure. Furthermore, some people can be asymptomatic, and therefore difficult to find and test for the virus. During these first few days, it is still possible to transmit the disease.
Many tribal casinos serve the local market and are providing safe, well organized, local or drive-to entertainment. There are stories of local properties having their strongest performance of any time. In a world where customers are hesitant to travel and are looking for entertainment offerings, this brings a silver lining to the global pandemic as local properties have an opportunity to flourish and diversify.
Over the years, a property’s marketing department has likely built up a rich history of marketing programs and response patterns, and the gaming department has carefully shaped the gaming floor and the products it contains to meet the needs of their customers. These analytic based decisions are a central part of how business operates.
COVID-19 has transformed the customer database. These changes reflect people working from home, no longer visiting restaurants, going to movies, or traveling. Most customers have completely changed their visitation patterns and are closely following how a property reopens.
After a reopening, every metric, assumption, and gaming product decision about an operation has changed. Furthermore, the basic math around determining game and customer performance has changed. For example, the decision to close part of the floor distorts the numbers, concentrating play on the remaining games and making the games that are turned off look unsuccessful. In the past, one key way of understanding customer value was the analysis of visitation patterns, but with the properties being partially or fully closed, and with unpredictable at-home conditions, these simple calculations based on visits per month are no longer reliable.
Many property staff have had a very difficult year going from an environment of steady employment in a gaming facility, to uncertain times compounded with the challenges of handling a pandemic. As the gaming business continues to return, some team members may have moved on, others may be under extreme financial stress, and most will have a level of uncertainty about their future lives that will impact their life decisions (such as the decision to buy a house).
There are reports from New York and other large cities of mass exodus. Many people are choosing to move to the countryside rather than stay in a small city apartment. Some of these remote workers may have chosen to move near a tribal property. Furthermore, many more may be deciding where to move. These new “locals” often come with remote jobs and a potentially very different set of entertainment requirements.
Tribal gaming had a difficult year in 2020, but there may be a silver lining as 2021 continues, with customers choosing staycations over vacations. This is a big shift for the gaming world, and as tribes plan for a vaccine enabled business, they should think deeply about business decisions as there are likely to be some unexpected and significant opportunities among the recovery challenges.
Andrew Cardno is CEO & Founder of Innovation Gaming Group. He can be reached by calling (858) 254-0412 or email [email protected].