Today's casino resort operations include a very large variety
of ways in which a guest might entertain themselves from weekend hotel
getaways, shopping, or dining to taking in a movie, bowling or even ice
skating. However, the real business of a casino property is and always
was conducted on the gaming floor! Right?
Perhaps the answer to this question is not as obvious as it once was.
The 2005 revenue statistics for the gaming industry in the state of Nevada
show, for the first time in history, that 51% of casino resort revenue
came from hotel rooms and food and beverage sales! This reflects changes
which have occurred particularly in Las Vegas, Mecca for casinos, where
hotel room rates have been climbing steadily for the past five years and
the quality and variety of fine restaurants and nightclubs is now on par
with the best restaurant cities in the U.S.A. More importantly, hotel
rooms and restaurants have become real profit centers for modern casinos
not just must-have amenities.
There are still many "locals" markets in Las Vegas and elsewhere
that are less impacted by hotel room rates, but not any less by the quality
of restaurants and other entertainment. At any given moment in the casino
nearest you, look around and try and estimate the number of people in
the casino who are not gambling and came for dinner, a show, or other
event and may or may not ever fill a gaming position. Casinos are "a
scene" a modern place to be, and be seen and the quality of their
"other services" is more and more becoming the differentiating
factor in why guests choose where they go to gamble and/or just be entertained.
This led me to wonder if compensation for the executives in charge of
hotel and food and beverage services has achieved parity with that of
their peers running the gaming operation. To find out, I queried our proprietary
HCE Compensation Exchange, Gaming Property Report for 2005, comparing
the compensation of VP Hotel Operations and VP Food & Beverage to
that of VP Casino Operations, VP/Director Slot Operations and VP Table
Games. Since these revenue statistics are taken only from Nevada casino
operations I selected only compensation data from Nevada based casinos.
Base Salary - 2005
| Position |
Minimum |
25th percentile |
Median |
75th percentile |
Maximum |
| VP Hotel Ops |
$48,530 |
$91,650 |
$142,215 |
$186,045 |
$395,638 |
| VP F&B |
$55,000 |
$82,575 |
$115,680 |
$158,541 |
$219,875 |
| Position |
Minimum |
25th percentile |
Median |
75th percentile |
Maximum |
| VP Casino Ops |
$75,788 |
$115,095 |
$168,451 |
$242,510 |
$447,673 |
| VP Tbl Games |
$59,525 |
$92,675 |
$124,556 |
$155,500 |
$260,000 |
| VP Slot Ops |
$68,520 |
$90,510 |
$131,025 |
$174,266 |
$281,216 |
It will come as no surprise that the VP Casino Operations
is making the highest median salary of the group at $168,451 or 18% more
than his or her nearest peer. The surprise may be that the next highest
median base salary is going to the VP Hotel Operations. The increased
average rates and the realization of hotel rooms as a profit center for
the property are likely justification.
The VP Food and Beverage remains the lowest earning position of this
group. However, this may be inevitable as profits from Food and Beverage
operations, with the exception of nightclubs, will never be as high a
percentage of the revenue dollar as gaming or hotel rooms.
Bonus - 2005
| Position |
Minimum |
25th percentile |
| VP Hotel Ops |
$38,875 |
$105,821 |
| VP F&B |
$24,441 |
$73,650 |
| Position |
Minimum |
25th percentile |
| VP Casino Ops |
$56,520 |
$242,975 |
| VP Tbl Games |
$28,775 |
$91,615 |
| VP Slot Ops |
$31,948 |
$108,722 |
Since bonuses are most often calculated as a percentage of
base salary we find that similar trends exist in this area as we found
above. As a percentage of salary VP Casino Operations earned a median
bonus of 34% while VP Hotel Operations median bonus percentage was 27%.
All the other executives in this group earned median bonuses of less than
25% of their base salary with the VP Food and Beverage again earning the
least at 21%.
In summary, while I obviously can't state that the "service"
executives have achieved parity in compensation I think there is a definite
trend in that direction. Certainly when compared to an industry of a not
so long ago that considered hotel room and meals something to give away
in order to lure players to their gaming tables this shows progress and
a heightened awareness of the need for competitive service in gaming resorts.
I, like many others feel that it will be these types of services that
will be a property's competitive advantage as the gaming industry continues
its growth in new and existing markets in the U.S. and abroad.
