The crm initiative also helped harrahs to increase

The CRM initiative also helped Harrah’s to increase its same-store sales i.e. sales from stores that
have been functioning for more than one year. Same store sales, an indication of customer loyalty,
went up by 14% in 1999, an increase of $242 million over 1998. Due to its CRM initiative,
Harrah’s was able to increase its same-store sales between 1999 and 2002 (Refer Exhibit III for
quarter-wise same-stores revenue growth from 1998-2002).
Another important benefit of the CRM program was the increase in revenues through cross-market
play. Revenues from cross-market play went up from 13% in 1997 to 22% in 1999. In 2002,
Harrah’s generated more than $1 billion in revenues from cross-market plays, which was up by
20% as compared to the 2001 figures. By 2004, the revenues rose to $1.44 billion. Harrah’s two
properties in Las Vegas, considered a very competitive market, posted a combined EBITDA
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of
37%, because of increased cross-market play.
The CRM initiative’s impact on the overall earnings of Harrah’s was significant. In 2002, Harrah’s
26 casinos across 13 states generated revenues of $4.14 billion, which was 12% higher than the
previous year. This was in the aftermath of September 11 terrorist attacks when the US
entertainment industry was in doldrums. Harrah’s total revenues grew from $2,977.8 million
reported in fiscal 2000 to $4,548.3 million in fiscal 2004 (Refer Exhibit IV for Harrah’s five year
financial summary).
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EBITDA stands for Earnings before Interest, Taxes, Depreciation and Amortization. EBITDA is an
approximate measure of a company’s operating cash flow. This measure is of interest to creditors as it is
an indication of the income a company has free for interest payments.
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Exhibit I
Hotel Revenue Management System
Source: .
Exhibit II
Winet Architecture
Source: .
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