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Mike Rothwell Managing Director Caesars Entertainment UK chats to Peter White
What, in your opinion, are some of the key attributes and characteristics that differentiate Caesars Entertainment UK’s casinos from other casinos in England and Scotland?
Caesars UK casinos typically differ from our competitors in two important respects – the scale of the operation and the breadth and quality of the offer.
Given that our properties, in most cases, have larger footprints, we’ve been able to differentiate through diverse and exciting products which we know appeal to not only existing customers, in each market in which we operate, but also enable us to attract new customers who wouldn’t otherwise visit a UK casino.
Our James Martin celebrity chef restaurant in Manchester is unique in the city and was, just recently, recognised as one of the Sunday Times Top 100 restaurants in the UK – a major accolade for us. The Marco Pierre White Steakhouse, Bar and Grill in Alea Nottingham has consistently performed well for us and, again, is unique from a casino perspective in that market.
In London, we have the incredibly successful Carlsberg Bar at The Empire Casino, not to mention the Playboy Club London in the heart of Mayfair, featuring the iconic Playboy Bunnies and also Salvatore Calabrese, one of the world’s most famous bartenders and mixologists. We are opening another celebrity chef restaurant at the end of January 2016 in our Alea Casino in Glasgow with Tony Singh. It’s an approach that works well for us.
We develop our business strategy on a market by market basis – what works in Manchester may not work in Glasgow, so we have to be creative, innovative and passionate about being the best we can be ensuring we understand the local opportunity and customer preferences, rather than providing a “one size fits all” solution.
What is the percentage of locals to tourists and business visitors to your London Casinos and is that representative across all the UK casinos or is it unique to London?
The contribution of casinos to the UK balance of trade is often under estimated. Across our London estate, I would estimate the split of revenue is roughly 50% international and 50% domestic, and that’s a significant influx of funds into the UK economy. Outside London, domestic business dominates revenues.
I’d like to see our government recognise this valuable contribution and support the industry through regulatory reforms, particularly around slot machine quotas, to enable UK operators to provide a product which would be more competitive in an international context.
Have there been many changes in the table game mix in recent years to account for changing trends?
The UK market has historically been dominated by roulette but, over the past couple of years, we’ve seen increased levels of Punto Banco / Baccarat, primarily in London, due to the influx of Far East Asian customers at the VVIP end of the market.
More recently, that segment of the market has contracted a little in Mayfair, but Caesars UK has been reasonably effective in increasing our market share.
What has been Caesars Entertainment UK’s approach at Head Office to the operations in the UK, Egypt and South Africa? Centralisation often characterises itself as a ‘one size fits all’ solution, or one can adopt a local model, with each operation incorporating their own individuality, founded on the clubs locality and the community it serves?
Our approach is to find the optimum balance between those two models. Centralisation where it makes sense from an efficiency and productivity standpoint, but with sufficient localisation to deliver maximum relevance and impact.
Our business model focuses on hiring great people and empowering them to get on and run their business, while holding them fully accountable. The role of our Head Office Team is to provide strategic direction, guidance, support, advice, capability, infrastructure and technology improvements.
As I said earlier, what works in one city may not work in another, so each business is tailored accordingly.
We’ve done a good job of breaking down any “them and us” mentality in our business and the communication lines between our management teams and our Executive Team are frequent and close. This enables us to move quickly and react well to changes in market conditions in a way that larger organisations typically find more difficult to do.
Overseas, we have dedicated management teams in Egypt and South Africa. They are there, in the market, and understand them well – our Head Office Team role remains the same – support them to get the best out of them.
Highly acclaimed Chef James Martin
Recently Mark Frissora, Global CEO of Caesars Entertainment Corporation recently went on record stating that the gaming industry needs to attract millennials to stay current. What initiatives do you think can be put in place from a UK perspective to engage with this section of the population?
I think Caesars UK has done a good job already in recognising that millennials are typically looking for entertainment experiences, rather than pure casino gaming experiences. Amenities like James Martin’s restaurant in Manchester235, Marco Pierre White in Alea Nottingham and the Carlsberg Bar at the Empire all appeal to this demographic.
Poker also has strong appeal to a millennial audience – the element of skill involved differentiates it substantially from regular casino games of chance. One can see this clearly from the recent World Series of Poker (a Caesars Entertainment brand) – the winner, Joe McKeehen, and the runner-up, Josh Beckley, were both 24 years old. Many of our properties have poker facilities – the most successful in our estate being the Empire Poker Room in Leicester Square, which we have recently expanded and refurbished.
We’re also doing a better job of communicating with our millennial customers – traditional direct mail has little relevance to them, so we are increasingly embracing social media, mobile, SMS and email as the means to market and inform.
The UK casino market still has a perception gap to overcome to be seen as a fun, safe, mainstream entertainment offer – I see this taking time, with relatively slim margins constraining significant above the line marketing investment, but celebrity partnerships and branding will help attract this increasingly important audience, as will a relentless focus on great service.
What aspects of the parent, Caesars Entertainment US, has the UK operation drawn upon to develop the Leisure and Entertainment aspects of the operation?
Our celebrity and branded partnership approach is something one will see throughout the Caesars Entertainment family. Gordon Ramsay, for example, has proved to be a massive success in our parent company’s Las Vegas properties.
Being part of the Caesars group also gives us access to experiences and offers which our competitors find difficult to match. We recently participated in a Caesars US promotion, the “Millionaire Maker”, to give our slot customers the opportunity to participate in a tournament in Las Vegas where one of them could win $1,000,000. This was a first in the UK market, and something that UK casino customers could only experience with us.
We’ve also arranged meet and greets for our customers with Caesars headline acts such as Britney Spears and Jennifer Lopez, at Planet Hollywood, and Mariah Carey at Caesars Palace – these are truly unique experiences which our customers can’t get anywhere else. Matt Goss, formerly of Bros, for those of us who remember the Eighties, has a long-term residency at Caesars Palace in Las Vegas, and recently performed three sell-out performances in Alea Nottingham, Manchester235 and the Playboy Club London. Our loyalty card customers get benefits and advantages both here in the UK and in our US properties, such as free room nights and the ability to use their loyalty points in the US and UK.
On the gaming side, we also work hard to promote UK experiences to US customers, and vice versa – having Caesars Palace or Planet Hollywood in the portfolio enables us to provide experiences and personal service which they can’t get elsewhere.
How does the financial performance of Caesars Entertainment UK compare across London with the regional Casinos and those in Egypt and South Africa?
2014 was a record year for us – we did a lot of work turning the business around from a relatively weak 2013, where we had been a little slow to adapt to intense competition in our key markets.
We worked hard to get the best talent on the team and drove engagement and service throughout the business. Our marketing team did a great job of improving our capabilities and focusing our investment on the strongest returns, and we made significant product changes, particularly on the electronic gaming side, all of which significantly boosted the business.
2015 very much continued that trend, albeit with some unlucky VIP play (from our perspective), which meant our strong business volumes didn’t all translate down to the bottom line.
London remains a fantastic market for us – it’s very international and very resilient in the face of a challenging economy. Generating profits outside London is much harder – consumer spending on entertainment and leisure is more constrained, so we have worked hard to differentiate ourselves, as I mentioned earlier.
The Middle East has performed well for us in 2015 – it’s seen by many as a difficult environment, but it’s an important force in the economic world, and we see strong linkages between our Egyptian and London operations. Again, we have a great leadership and operations team there, and the correlation with the impressive financial results is no coincidence.
The Emerald Resort in South Africa is a significant integrated resort property, comprising circa 750 acres of land, a 550 slot / 30 table casino, a hotel, bush lodges, chalets, restaurants, zoo, safari park and other amenities. 2014 and 2015 have been turnaround years for the resort – we put in place a whole new smart-card gaming system, provided by DRGT, new product, new marketing programmes and new talent – I’m expecting good things from 2016, in spite of a weakening local currency.
Have there been many changes amongst the EGM’s and what is your current replacement / upgrade cycle on slots and which would you say have proven to be stand out performers over the last year?
Rather than defined product replacement cycles we 9look at what performs and what doesn’t. It’s worth remembering that in the UK we have a very small number of units by international standards.
That said, throughout 2014, we undertook a major rollout of Bally’s Fusion electronic roulette product and that has been successful for us.
Your London offices happen to be located just down the road from a very famous address, 221b Baker Street, that of Sherlock Holmes. Do you and your staff see a lot of filming of the series along the street?
I’m a big fan of the Sherlock Holmes series, but I haven’t seen any of the actors or film crew since we moved here.
The rationale for the move, last March, from our previous Head Office in Mayfair, was to find a better place to work for our team, which fitted our culture better, was more open plan and modern with better technology, communication and more efficient building systems which, in turn, helps the environment. We also saved quite a bit of money and Marylebone is an exciting and vibrant area, so it’s been a winner all round.
How do you see the prevailing UK economic climate for 2016 and do you think there will be an increase in disposable income providing more opportunity for it to be spent in leisure and entertainment?
I feel positive about the UK economy generally, but I don’t see much natural growth in consumer disposable income over the next couple of years.
To capture market share, we’ll have to work hard to provide customers with what they want – excellent customer service remains critical for us, supported by training and engagement of our teams.
Making our marketing and promotions relevant and exciting to our customers, together with the diversity of restaurants, bars and other amenities on our premises will also be very important.
Caesars Entertainment UK has, in its portfolio, casinos that have maintained a very high quality of standards in highly appealing locations particularly in London. How popular and important are the bars, restaurants and the entertainment in clubs such as the Empire, Leicester Square, The Sportsman, Marble Arch, and the Playboy Club London in Mayfair?
We have some great amenities in our casinos, and branded associations will continue to be an important part of our business model – customers respond well to brands, providing the offer is executed and marketed well, and we’ve done a good job of that.
We recently extended the Carlsberg Bar in the Empire Casino in Leicester Square – it’s performed well since we originally opened it 4 years ago and the customer demand was clearly there – it’s a great place to watch the football, rugby, cricket and international sports too. December also saw the launch of the Dragon Lounge VIP room at the Empire, a dedicated area for high end customers with limits and service to match.
I mentioned the Playboy Club London earlier, which has been a game-changer in the Mayfair market. We’ve put a lot of thought, effort and analysis into being innovative and mould-breaking, and it’s been consistently successful for us.
Are there plans for Caesars Entertainment UK to expand into mainland Europe?
We have the capability, and extensive international experience in the team, to do so and I would like to. We continually evaluate opportunities.
What are amongst the main accomplishments of the organisation in 2015 and are among the organisations principal goals for 2016?
From my perspective, the key to building a successful organisation is to get the best people on the team, train them well and motivate them to be successful. During 2015, I believe I made good progress towards my goal of assembling the best senior management team in the industry – they’re great – operationally focused, engaged, enjoy working in the industry and are great ambassadors for Caesars’ Mission, Vision and Values.
Our customer service scores climbed to record levels, thanks to the efforts of all our team members, and our workforce engagement, which we measure through our annual Employee Opinion Survey, improved well over the previous year.
Employee engagement and customer service will continue to be key for Caesars UK during 2016, as will improving our product, processes and technology to enable us to give customers what they want and to help us understand our customers better and communicate with them more effectively.
I’m hoping that, with all the things we’ve done in 2015, and the plans we have in place, 2016 will be another record year for our business.
