Montecasino: A Bluprint for Success

Abstract

In May 2012, Rob Collins, MD of Tsogo Sun Gaming, one of the major players in the South African casino industry, reflected on the success of its star performer, Montecasino. Its success could – at least in part – be attributed to the fact that Montecasino had managed to establish a service-oriented culture that supported the strategy of the casino complex. Collins thought back on all that they had done to build the culture, and wondered what the most important things were that they had done to bring about success.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

Resources

Exhibit 1a Tsogo Sun Investment Holdings Ltd

Montecasino was owned by Tsogo Sun Gaming, which in turn was owned by Tsogo Sun Investment Holdings Ltd, a holding company for the Tsogo Sun Group. In the year ended 31 March 2011, the group generated a total income of R6.5 billion.

The Tsogo Sun Group operated through two wholly owned divisions: Tsogo Sun Gaming and Southern Sun Hotels. By 2011, Tsogo Sun Gaming owned 14 casinos country-wide and Tsogo Sun's Southern Sun division owned, leased and managed 94 hotels.

Sources: J Baumann, ‘Gold Reef and Tsogo Sun to Merge at Last’, Business Day, 19 February 2011, available www.businessday.co.za/articles/Content.aspx?id=94236 (accessed 7 September 2011); Tsogo Sun Holdings Ltd., ‘Annual Report 2011’, available www.tsogosunholdings.com/downloads/annual_reports/AnnualReport2010.pdf (accessed 21 September 2011); and Tsogo Sun Gaming, official home page, available www.tsogosun.co.za/Pages/default.aspx (accessed 30 August 2011).

Figure

Exhibit 1b Tsogo Sun Gaming Casinos

  • Montecasino, Johannesburg;
  • Gold Reef City Casino, also in Johannesburg, as well as The Apartheid Museum on the same premises;
  • Silverstar Casino in Krugersdorp;
  • SUNCOAST in Durban;
  • Golden Horse Casino in Pietermaritzburg;
  • Blackrock Casino in Newcastle;
  • The Ridge in Witbank;
  • Emnotweni in Nelspruit;
  • Goldfields Casino in Welkom;
  • Hemingways in East London;
  • Queens Casino in Queenstown;
  • The Caledon in Caledon;
  • Garden Route Casino in Mossel Bay; and
  • Mykonos Casino in Langebaan.

Source: Tsogo Sun Gaming Home Page, available www.tsogosun.co.za (accessed 21 September 2011).

Exhibit 1c The Tsogo Sun Group: Condensed Consolidated Income Statement for the Year Ended March 2012

INCOME STATEMENT

For the year ended 31 March 2012

Change

%

2012

Rm

2011

Rm

Net gaming win

61

6 111

3 804

Rooms revenue

Food and beverage revenue

1 615

752

1 591

677

Other revenue

553

415

Income

39

9 031

6 487

Gaming levies and VAT

(1 248)

(773)

Property and equipment rentals

(239)

(211)

Amortisation and depreciation

(623)

(447)

Employee costs

(2 116)

(1 467)

Other operating expenses

(1 787)

(2 137)

Operating profit

108

3 018

(1 452)

Interest income

49

24

Finance costs

(469)

(415)

Share of profit of associates and joint ventures

10

79

Profit before income tax

129

2 608

1 140

Income tax expense

(761)

(431)

Profit for the year

161

1 847

709

Profit attribu Table to:

Equity holders of the company

1 717

583

Non-controlling interests

130

126

Total

1 847

709

Number of shares in issue (millions)

1 097

1 097

Weighted number of shares in issue (millions)

1 097

906

Basic and diluted earnings per share (cents)

143

156.5

64.3

Note: Montecasino contributed R2 107 million in 2012 to the total income (R1 964 million in 2011).

Source: ‘Tsogo Sun Group Reviewed Consolidated Financial Results for the Year Ended 31 March 2012', Business Day, 18 May 2012.

Exhibit 2 Images of Montecasino

Fake roof in Montecasino

Figure

Skyline of the Montecasino precinct

Figure

West entrance to Montecasino

Figure

Street entertainer at Montecasino

Figure

Source: Images courtesy of Deidre Jameson, services manager, Montecasino, September 2011.

Exhibit 3 Montecasino Organisational Structure

Source: Courtesy of Wanda Moraka, Tsogo Academy at Montecasino, September 2011.

Figure

Exhibit 4 Montecasino's 10-year Vision: Cover of Time Magazine 2021

Source: Courtesy of Steve Howell, general manager, Montecasino, September 2011.

Figure

Exhibit 5 Creating the Guest Experience

Intangible elements to stimulate the senses were implemented at every initiative or event presented in the precinct. In the early days, the Tuscan village theme was emphasised by using Italian music and songs but, along with Montecasino's belief in changing constantly, the music and live street entertainment now focused on supporting a theme or upcoming event.

In the planning phase of any such event, the marketing department planned how to appeal to the five senses of sound, sight, touch, smell and taste. The combined stimulation of the five senses would then satisfy the sixth sense, which Montecasino described as the overall emotion or feeling a guest would experience in Montecasino. Montecasino's complex services then helped to implement the plan to the smallest detail, to create and sustain the right environment in which the customers could have this multisensory experience.

On entering Montecasino, the guest would therefore encounter a powerful yet subtle sensory experience. The theme-based lighting and décor, in accordance with the current theme, stimulated the sense of sight. The visual experience was further enhanced by the attention to detail: the ever-gleaming cobblestone floors, the realistic-looking plants and the washing on the lines above the streets. This washing was changed to support the themes for the events; for example, during the ‘Taste of Johannesburg’ food and drink event, chefs' jackets were hung on the lines. Over weekends, there were the added visual delights of jugglers, mimes and stilt walkers.

By pumping various aromas through the air conditioning ducts, the guest became even more involved in the theme. When Montecasino presented the SA Open Tennis championships, for example, the smell of freshly cut grass and berries were pumped through various sections of the precinct. Likewise, the smell of freshly baked muffins or coffee filled the air in various areas during the food and drink event, Taste of Joburg.

To emphasise the sense of touch, samples of sunscreen lotion would be handed out during the tennis championships, or roses on Valentine's Day. And, naturally, indulging in the wide choice of food and drinks in the restaurants satisfied the sense of taste, while musicians in secluded corners and background music, appropriate to the theme of the day, appealed to the sense of hearing.

Being entertained in Montecasino terms meant that guests should never experience a dull moment. All theatre productions, for example, were therefore uplifting in nature. Depressing shows, regardless of good reviews they might have received, would simply not be presented.

The shops in Montecasino also embraced the ‘Mood and Mind’ concept. A good case in point was the bookshop, Skoobs (books written backwards) – a concept store that claimed to be the first of its kind in South Africa. Visitors to the bookshop indulged in another sensory experience the minute they stepped into the shop and saw a fish tank with its specially designed water books nestling in the sand at the bottom of the tank. Apart from its vast range of books to touch, it had a coffee shop emitting aromas to stimulate the senses of smell and taste, as well as a champagne bar with a baby grand piano intermittently used to entertain the visitors, stimulating the sense of hearing. Children were entertained in an interactive gaming area, the smaller children by an animal-themed interactive book section. The sensory journey took one right through to a Zen garden on the top floor in the Body, Mind and Soul book section that featured a comfortable hanging chair for guests to nestle in.

Sources: Interview with Cecile Putter, 8 December 2011; and Montecasino, ‘Skoobs: Theatre of Books’, no date, available www.montecasino.co.za/storedirectory/Pages/Skoobs.aspx (accessed 3 January 2012).

Exhibit 6 Tsogo Sun Gaming Group's Top Line and Bottom Line Principles and Descriptions

TOP LINE PRINCIPLES

A Great Place to Work

  • We laugh and have fun
  • We bring passion, enthusiasm and energy to everything we do
  • We work hard and play hard

Attract and Develop Gifted People

  • We employ only the best – the right person with the right attitude and the right ability
  • We nurture and develop talent through training, mentoring and coaching
  • We recognise and appreciate a job well done

'Can-do'

  • We are proactive: if we don't know – we ask, we find out, we make it happen
  • We always go the extra mile
  • We do whatever it takes – even if it's not in our job description

Clean and Safe Environment

  • Cleanliness and safety is everyone's responsibility
  • We focus on maintaining our environment to the highest standards
  • We are ALL vigilant and aware

Continually Raise the Bar

  • Good is the enemy of great!
  • We look for different ways to do things better
  • We welcome challenge and constructive input

Deal with the Issues

  • We believe in doing the right thing, not the popular thing
  • We say it as it is – we don't sugar coat it
  • We step up to the plate when we have to (even when it's tough)
  • We are decisive
  • We take action
  • We follow up
  • We do it now

Entrepreneurial Spirit

  • We live by the ethos to ‘Dream, Dare, Do'
  • We think out of the box and stay open to new ideas
  • We choose to be players, to try new things, to take calculated risks – to make a difference

Great Communication

  • We share the message with everyone (not just on a need-to-know basis)
  • We give AND receive feedback
  • We keep the message relevant and simple
  • We deliver the message timeously (face to face and in person where we can)

Inspiring Leadership

  • As leaders, managers and supervisors we are visible, involved and approachable
  • We lead by example – we are a ‘roll' model to others
  • We have a clear vision and focus

Market and Business Intelligence

  • We keep our finger on the pulse
  • We know our business, our market and our customers
  • We know how to utilise this information to make the biggest impact in our area

Personalised Service

  • Our service is legendary – every customer is treated as an honoured guest
  • We make every experience magical and memorable
  • Every moment is a ‘moment of truth'

Teamwork

  • We believe in pulling together and working as one – one team one goal!!
  • There is no ‘I' in ‘team'
  • We are co-operative, supportive and set others up for success

The Spirit of Tsogo

  • We act with integrity – doing only that which is noble and wise
  • We are impeccable to our word
  • We treat every person with dignity and respect (no matter who they are)

Uplifting the Community

  • We are part of the community – and strive to make a difference in everything we do
  • We strive to elevate the environment through arts and culture, entertainment and cuisine
  • We strive to generate a positive buzz and energy creating opportunities that never before existed

World Class Gamertainment

  • 'The thrill of anticipation – the pleasure of indulgence'
  • Our ENTIRE product offering is always of the highest quality
  • We strive to continually ‘assault' the senses – to create the right ‘mind and mood'
  • We leverage every opportunity to create the ‘Wow' and the ‘Sizzle' – to build our presence and raise our profile

BOTTOM LINE PRINCIPLES

Absenteeism

  • People who fail to show up without letting others know add no value to our business
  • People who are late or have no respect for time add no value to our business
  • People who are present but ‘mentally checked out' add no value to our business

Abusing our Assets

  • We abuse our assets when we mistreat or damage our equipment, whether deliberately or through careless action
  • We abuse our assets when we fail to report or repair faulty machines or equipment

All Talk No Action

  • When we go around in circles but fail to reach a conclusion
  • When we pay lip service to the strategy but fail to deliver
  • When we don't follow through

Arrogant and Complacent

  • If we think we know it all and are not willing to listen
  • If we look down on others and have an exaggerated sense of self-importance
  • If we believe we are untouchable and stop trying

Autocratic

  • If we abuse our power by dominating and intimidating others
  • If we believe ‘my way is the only way'

Bad Planning

  • We fail if we lose sight of the bigger picture
  • We fail if we are reactive and act on impulse without the appropriate facts and information

Bureaucracy and Red Tape

  • If we are rigid and inflexible
  • If we create unnecessary barriers and complex hierarchical structures
  • If we hold senseless meetings and made our decisions via committees

Damaging our Reputation

  • If we link our brand to the wrong event
  • If we associate with questionable or disreputable suppliers
  • If we ‘bad mouth' the company or act and dress in an inappropriate manner

Dishonesty

  • Lies, theft and corruption
  • Fraud and collusion
  • Lack of openness and transparency
  • Abuse of privileges and rights

Favouritism

  • If we have double standards
  • If we are inconsistent and unfair
  • If we allow personal feelings to cloud our business judgement

Lack of Accountability

  • If we make our career path someone else's problem
  • If we make excuses or take the easy way out
  • If we turn a blind eye or pretend something is not our problem

Negativity

  • People who are always moaning and complaining contaminate the environment
  • People who ‘live in the past' are never prepared to see a brighter future
  • People who believe they are ‘entitled' and are not prepared to ‘earn their keep' add no value

Non-compliance

  • We jeopardise our gaming licence if we fail to comply with Gaming Board rules and legislation
  • We put ourselves and others at risk if we do not operate within the corporate governance guidelines
  • We put our business at risk if we fail to follow policies and procedures

Politics

  • There is never a right time for backstabbing and gossip
  • There is no room in our business for hidden agendas
  • Power plays and turf protection are unproductive and pointless

Slipping up on the Basics

  • When we drop our standards or settle for ‘second rate anything'
  • When we get the simple things wrong
  • When we pay poor attention to detail and make the same mistakes over and over
  • When we have ineffective and inefficient processes

Source: Courtesy of Wanda Moraka, Tsogo Academy at Montecasino, September 2011.

Exhibit 7a Examples of Tsogo Sun Gaming's Top Line Icons

Source: Courtesy of Louise Sevel, general manager: brands, Tsogo Sun Group, 1 May 2012.

Figure

Exhibit 7b Examples of Tsogo Sun Gaming's Bottom Line Icons

Source: Courtesy of Louise Sevel, general manager: brands, Tsogo Sun Group, 1 May 2012.

Figure

Exhibit 8a Examples of the Montecasino Top Line Principles (Icons) – ‘Have to Have’ Principles

Source: Courtesy of Wanda Moraka, Tsogo Academy at Montecasino, September 2011.

Figure

Exhibit 8b Examples of the Montecasino Bottom Line Principles (Icons) – ‘Can’t Afford to Have' Principles

Source: Courtesy of Wanda Moraka, Tsogo Academy at Montecasino, September 2011.

Figure

Exhibit 9 The Montecasino Formula for Success

Figure

Source: Courtesy of Wanda Moraka, Tsogo Academy at Montecasino, September 2011.

Figure

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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