International Journal of Hospitality Management 29 (2010) 754–757

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International Journal of Hospitality Management

journal homepage: www.elsevier.com/locate/ijhosman

Research note

An exploratory study of the relationship between customer-based casino

brand equity and firm performance
Henry Tsai *, Catherine Cheung, Ada Lo
School of Hotel & Tourism Management, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong

A R T I C L E I N F O A B S T R A C T

Keywords: This exploratory study examines the relationship between customer-based casino brand equity and firm
Customer-based brand equity (CBBE) performance using Macau casinos as a sample. The results indicated that better-performing casino
Casino brands were associated with greater customer-based brand equity, which comprises brand loyalty,
Macau brand image and brand awareness. Furthermore, Asia Pacific-based casino brands in Macau
Firm performance
outperformed their U.S.-based counterparts in terms of customers’ perceived quality, suggesting the
need for U.S.-based casino brands to better cater for the needs of Macau casino visitors and to localize
their services. Future research directions are also suggested.
ß 2009 Elsevier Ltd. All rights reserved.

1. Introduction Branding is prevalent in almost every industry including

The casino industry, whether in the United States (U.S.) or
elsewhere, has seen phenomenal growth in terms of both supply
and demand in the past two decades. Meanwhile, casino firms have
also faced fierce competition within the industry, particularly with
the reshuffling of the Asian casino market since the early 2000s.
The release of three gaming concessions (and later, three sub-
concessions) in Macau in 2002 and the subsequent development of
the Integrated Resorts (containing casinos) by Singapore has
further complicated the casino business environment. Despite a
seemingly optimistic outlook for the industry, questions such as
whether there are enough people to fill the casino floor, or how to
attract and retain customers are frequently raised by the
stakeholders. The answer to the former question can probably
be found in published statistics. In the U.S. alone, total casino
revenue increased from US$16 billion in 1995 to US$32.42 billion
in 2006 (American Gaming Association, 2007). Macau, emerging as
the largest casino jurisdiction worldwide in terms of casino
revenue, took in almost US$7 billion in 2006, representing an
increase of 90% from 2003 (Statistics and Census Service, 2007).
This growth in casino revenue reflects people’s rising interest in
casino gaming, but it also indicates that casino firms need to
distinguish themselves from their rivals in order to attract and
retain customers, and thus generate more revenue. One way of
distinguishing a company, or seeking competitive advantage, is to
focus on branding strategies (de Chernatony and McDonald, 2003).
* Corresponding author.
E-mail addresses: hmhtsai@polyu.edu.hk (H. Tsai), hmcat@polyu.edu.hk
(C. Cheung), hmada@polyu.edu.hk (A. Lo).
casinos and has become an element of corporate strategy. For
example, Wynn Resorts created the global brand name ‘‘Wynn’’ to
identify its casino properties and today there is substantial
recognition of the name ‘‘Wynn’’ in connection with high-end
gaming and entertainment facilities (Wynn Resorts, 2007).
Harrah’s Entertainment, owning close to 40 casino properties in
the U.S. primarily under the brand names of Harrah’s, Caesars and
Horseshoe, is considering changing its corporate name to ‘‘Caesars’’
because of the various benefits that such a change may bring
(Casinogamblingweb.com, 2007). Such branding strategies lead
one to ask whether brands have value and, furthermore, how they
affect firm performance. The value of a brand to consumers and the
firm owning the brand has been conceptualized with the term
‘‘brand equity’’ (Randall, 2000), and this is regarded by many
companies as their biggest and most valuable asset (Ambler, 2003).
Brand equity research in the hospitality industry has gained
increasing attention from both academics (e.g., Kim et al., 2003;
Prasad and Dev, 2000) and commercial firms (e.g., Interbrand).
However, brand equity studies related to the casino industry have
been scarce. Aaker (1991) suggests that the nature of brand equity
varies from context to context and that brand equity should be
defined within particular industry contexts. One such context is
the casino business. A uniqueness of the casino industry is that it is
considered a privilege, not a right, to own and operate a casino
(Kilby et al., 2005). It is therefore not possible to franchise a casino
brand to franchisees as is the case in other industries such as
restaurants. The goal of this study is therefore to examine if there
exists a relationship between firm performance and brand equity
in the casino industry using Macau casinos as a sample. To the best
of our knowledge, no prior studies have researched the topic of
casino brand equity, let alone its relationship to firm performance.

0278-4319/$ – see front matter ß 2009 Elsevier Ltd. All rights reserved.
doi:10.1016/j.ijhm.2009.08.001
 H. Tsai et al. / International Journal of Hospitality Management 29 (2010) 754–757
Our exploratory study can therefore contribute to the body of
knowledge and stimulate further research in this area.
2. Methodology
This study identified and measured the components of casino
brand equity from the customer’s perspective. Conceptualizing
brand equity from the perspective of the customer motivates
marketers to focus on how their marketing programs increase the
value of their brand in consumers’ minds (Keller, 1993). In our
study, we investigated the possible relationship between casino
brand equity and firm performance.
The study consisted of two stages: the exploratory stage,
during which relevant measurement items of casino brand equity
were drawn up, and the main survey stage, during which
customers’ brand equity perceptions were measured. In the
exploratory stage, a list of brand equity descriptors was generated
based on previous literature, such as Aaker (1991), Kim et al.
(2003) and Kim and Kim (2004), and then categorized into four
dimensions: brand loyalty, perceived quality, brand image and
brand awareness. The wordings of the descriptors were modified
to apply to the casino setting. Brand loyalty included attributes
such as ‘‘I regularly visit this casino’’; perceived quality included
attributes such as ‘‘Game play areas are clean’’; brand image
included attributes such as ‘‘The casino is luxurious’’; and brand
awareness included attributes such as ‘‘The casino is very
famous’’. While a number of hospitality brand equity studies
(e.g., Kim et al., 2003) have been published, they were not
conducted in Chinese or casino contexts. Because of cultural
differences between Chinese and non-Chinese, we felt that the
brand equity instrument developed in other cultural settings was
not suitable for our study. After we had drawn up the list of brand
equity descriptors, it was reviewed by an expert panel consisting
of 10 academicians and industry professionals, and each
descriptor was evaluated for its ability to measure the individual
brand equity dimensions. A convenience sample of 66 people who
had previously visited casinos in Macau were interviewed at the
Hong Kong China Ferry Terminal in Hong Kong, to further validate
the attributes under the different brand equity dimensions. The
list of descriptors under the four dimensions was deemed valid
after these two rounds of validation. Cronbach’s alphas were then
calculated to assess the reliability.
The main survey was conducted in October 2008 using the
validated brand equity dimensions derived from the exploratory
analysis (see Appendix A). A total of 40 attributes were included in
the questionnaire, including five items for brand loyalty, 21 for
perceived quality, 10 for brand image and 4 for brand awareness.
The target respondents of the survey were people who had prior
experience with one of the six casino brands selected for this study
during the previous 12 months. As it was unlikely that each
respondent was familiar with all six casino brands, we asked the
respondents to answer our questionnaires by considering the
casino they had most recently visited. The survey was conducted
outside six major casinos that belong to six casino brands in Macau
using a convenience sampling method. The respondents were
asked, using a seven-point Likert-type scale (‘‘1’’ = ‘‘Strongly
disagree’’ to ‘‘7’’ = ‘‘Strongly agree’’), to indicate how they
perceived the brand equity of the casino. Demographic information
was also obtained. The survey data were analyzed using
descriptive statistics and independent-samples t tests.
Traditional firm performance measures such as return on equity
(ROE) and return on sales (ROS) were deemed to not be appropriate
for this study because they are strongly related to the management
ability of a firm in terms of controlling expenses. Using gross
gaming revenue to measure firm performance seemed to be
appropriate in this context as it directly reflects the level of
755
customers’ gaming activities as a whole in a casino. The responses
were split into two groups based on the performances of the casino
brands being evaluated (i.e., high-performing vs. low-performing)
(see, for example, Kim et al., 2003). Based on the results of the
customers’ evaluation of casino brand equity, the relationship
between casino brand equity and firm performance was then
assessed using an independent-samples t test to compare the high-
performing and low-performing casino brands. A second inde-
pendent-samples t test was conducted to compare the customer-
based brand equity between U.S.-based and Asia Pacific (APac)-
based casino brands. Previous literature suggested that a
difference in customer perceptions of a brand might exist due to
cultural differences (Foscht et al., 2008) or between a U.S. global
brand and domestic brands (Lee et al., 2008). Furthermore,
customers may perceive brand image (Koubaa, 2008), brand
preferences and brand choices (Kwok et al., 2006) differently
because of the brand’s country of origin.
Gross gaming revenue data of the six casino brands being
studied were obtained from their annual reports. In 2008, the gross
gaming revenues reported by each casino brand were as follows:
Sociedade de Jogos de Macau (SJM) MOP 28,832,000,000; Wynn
Macau MOP 18,192,415,000; Galaxy MOP 11,243,314,000; Vene-
tian Macau MOP 26,048,469,151; MGM MOP 151,517,000; and
Melco Crown Gaming (Crown) MOP 15,582,492,479.
3. Results
Altogether, 204 questionnaires were obtained and used for the
analysis. A total of 95.1% of the respondents came from Mainland
China, Hong Kong or Taiwan. Of these, residents of Guangdong
Province constituted about 56% and Hong Kong residents 13.7%.
Male and female respondents accounted for 49.5% and 50.5%,
respectively. Most respondents were in the age groups of 18–29
(29.4%), 30–39 (28.4%) or 40–49 (27.9%). Just over a third of the
respondents (34.8%) had received college/university education,
just under a third (32.3%) had received up to senior high school
education and 30.3% had not been to high school. A total of 43.8% of
the respondents earned less than RMB 5000 (1 USD = 6.8 RMB) per
month, while 31.5% earned between RMB 5001 and RMB 10,000
per month. A total of 41.8% of the respondents had made two or
three trips to Macau casinos during the previous 12 months. Sixty
percent of the respondents had a gaming budget of RMB 1000 or
more each trip; 10% had a gaming budget of more than RMB
10,000. The distribution of the non-gaming budget of the
respondents was similar to that of the gaming budget.
The Cronbach’s alpha values, which ranged from .722 to .911 for
the four dimensions, demonstrated an acceptable level of
reliability of the scales; an overall Cronbach’s alpha of .946
indicated that all attributes were measuring the same construct,
namely brand equity. The mean scores of each casino brand equity
dimension, along with an overall brand equity score, were
calculated (see Table 1). Using the average gross gaming revenues
of the six casino brands in 2008 (the first year of full operations for
Table 1
Comparisons of brand equity scores between high-performing and low-performing
casinos.
Mean scores
High-performing Low-performing t value
Brand loyalty 4.62 3.96 4.708*
Perceived quality 4.77 4.65 1.074
Brand image 4.89 4.60 2.366**
Brand awareness 5.09 4.43 4.288*
Overall brand equity 4.84 4.41 3.843*
*
Significant at p  .01.
**
Significant at p  .05.
756 H. Tsai et al. / International Journal of Hospitality Management 29 (2010) 754–757
Table 2
Comparisons of brand equity scores between U.S.-based and Asia Pacific-based
casinos.
Mean scores
U.S.-based Asia Pacific-based
Brand loyalty 4.28 4.37
Perceived quality 4.57 4.86
Brand image 4.69 4.84
Brand awareness 4.75 4.84
Overall brand equity 4.57 4.73
Note: Significant at p  .05.
all six brands) as the dividing point, SJM, Wynn and Venetian were
categorized as high-performing casino brands whereas Galaxy,
MGM and Crown were categorized as low-performing brands.
Based on the t test results, significant differences were found
between the high-performing and low-performing groups for all
brand equity dimensions except for perceived quality (brand
loyalty (t = 4.708, p < .001), brand image (t = 2.366, p < .05), brand
awareness (t = 4.288, p < .001), overall brand equity (t = 3.843,
p < .001)). Interestingly, it was also found that the mean scores for
the high-performing casinos were significantly higher than those
for the low-performing casinos for all brand equity dimensions,
again except for perceived quality. In other words, casino brands
that performed better were associated with greater customer-
based brand equity. However, it should be noted that no causal
relationship was implied by this result.
Table 2 compares the brand equity scores between the U.S.-
based casinos (i.e., Wynn, Venetian and MGM) and the APac-based
casinos (i.e., SJM, Galaxy and Crown). The results show that among
the brand equity dimensions, only perceived quality was found to
differ significantly between the U.S.-based and APac-based casino
brands. The APac-based casino brands generally obtained higher
scores for brand equity than did their U.S.-based counterparts. In
particular, the customers perceived that the service quality in the
APac-based casinos was significantly better than that in the U.S.-
based casinos. This implies that the APac-based casinos cater
better to the service expectations of Macau casino visitors. The
U.S.-based casinos might benefit from acknowledging cultural
differences between Asian and U.S. players and localizing their
services in Macau.
4. Conclusion
This exploratory study identified four customer-based casino
brand equity dimensions from prior studies and examined their
relationship to firm performance using Macau casinos as a sample.
Greater casino brand equity was found to be associated with
better-performing casinos. Future studies could extend this study
by examining the possible causal relationship between casino
brand equity (customer-based or financial-based as proposed by
Simon and Sullivan, 1993) and firm performance. In addition,
future studies could use a larger sample covering other gaming
jurisdictions in order to confirm the casino brand equity
dimensions used in this study. Lastly, future studies could examine
the magnitude of each brand equity dimension on the overall
brand equity and help casino operators to direct their resources in
more desirable ways in order to enhance their brand equity and
optimize their branding strategies.
A few limitations of this study should be noted. Firstly, the
respondents completed the questionnaires based on their experi-
ence at one casino of a brand, not the overall brand. Therefore, their
responses did not thoroughly reflect evaluations of the brand
equity of a particular brand. Secondly, the appropriateness of using
gross gaming revenue as the measure of firm performance in our
study might seem debatable as the gaming statistics reported by
casinos in Macau are not as detailed and comprehensive as those
reported by casinos in other gaming jurisdictions such as Nevada.
Dividing the overall gaming revenue of a casino brand into
t value revenue, from tables, from slots and from interactive gaming
.594
machines, or even dividing it further into revenue per table or per
2.483* slot, would better represent casino firm performance.
1.156
.601 5. Acknowledgment
1.314
The authors would like to acknowledge the financial support of
The Hong Kong Polytechnic University (Grant No. 1-ZV65).
Appendix A. Casino brand equity dimensions and attributes
with Cronbach’s alpha values
Brand loyalty (Cronbach’s alpha = .722)
I regularly visit this casino.
I would recommend this casino to others.
I am ‘‘emotionally attached’’ to this casino.
I am happy to tell other people about my experiences in this casino.
I would allow my name and a positive comment I made about this
casino to be used in an advertisement.
Perceived quality (Cronbach’s alpha = .911)
Supportive facilities (e.g., toilets, rest areas) are clean.
Games play areas are clean.
Games play areas are comfortable.
The casino offers good quality of food and beverage.
The casino offers consistent service every time I visit.
The casino shows a sincere interest in solving the problem I have.
The casino staff handles customer complaints effectively.
The casino staff anticipates my specific needs and serves me well.
The casino staff has professional appearance.
The casino staff is willing to offer their service accurately.
The casino staff quickly corrects mistakes.
The casino staff is competent in performing their tasks.
The casino offers a wide variety of games.
Besides gaming, there is a variety of different activities, e.g.,
shopping, entertainment, etc., in the casino.
The bet limits of the casino are reasonable.
The casino has a designated non-smoking playing area.
The casino treats my personal/financial information confidentially.
The slot machines function accurately.
The dealers treat all the players fairly.
The security measures taken by this casino are of the highest standards.
The responsible gaming measures taken by this casino are made aware
to the customers.
Brand image (Cronbach’s alpha = .836)
The casino is luxurious.
The casino has an exciting atmosphere.
The casino is big and spacious.
The casino has differentiated image from other casino brands.
The casino brand has a long history.
The casino has a welcoming atmosphere.
The casino offers high level of service.
The casino has courteous staff.
The casino staff adds something positive (e.g., enjoyment, value, etc.)
to my experience.
The casino is a lucky place for me.
Brand awareness (Cronbach’s alpha = .803)
The casino has a good name and reputation.
The casino is very famous.
The characteristics of this casino come to my mind quickly.
When I am thinking about gaming, this casino comes to my mind
immediately.
Overall casino brand equity (Cronbach’s alpha = .946)
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