There is little doubt that the Hard Rock casino will take some casino play from the Atlantic City casinos still operating. But with an experienced company marketing and running the 2,000 room property, the overall market in AC will also grow.
The MGM in Springfield should have no impact on the AC market; but the Cordish Live property in Philadelphia, and a possible North Jersey casino at the Meadowlands will have a detrimental effect. However we are probably looking at 3 years before either of these projects are operational. In the meantime,
AC has to come together and make a Herculean effort to convince conventions and medium sized trade shows, that their customers can have more fun in AC, and drawing more exhibitors and attendees, than more air accessible cities, like New York and Washington.
Since the major Eastern competition has commercial business demand, competing with meetings for the available rooms; AC can offer substantial savings, and still enjoy meaningful room rates, compared to what they currently offered for, 200 nights a year, mid-week in the Fall, Winter and Spring.
Prior to PA gaming, AC relied on line run buses, where the majority of it’s 14 million visitors were coming mid-week days and nights.
AC is still at a disadvantage with no incoming commercial air service.
With quality accommodations, casino gaming, entertainment and top quality restaurants everywhere; plus room rates below the $500 per night mid-week in Manhattan, we can make a major case for conventions.
Following the example of the Strip in Las Vegas; that enjoys a higher annual occupancy than AC, and at room rates 60% higher, and a much lower percentage complimented, that our casino resorts.
AC receives 70% of its revenues and over 100% of its departmental earnings from the casino; the larger Strip resorts earn 34% of their revenue and only 26% of departmental earnings from the casino. The room department provides 41% of the overall earnings, followed by the convention department at 20% and food and beverage at 13%.
Hard Rock, with an emphasis on entertainment, will draw a disproportionate number of new visitors, but they can’t do the job alone.
Harrah’s will continue to bring group business to it’s convention facilities, but much more has to be done attracting city wide shows, that will also fill some of our nicer non casino properties.
When I look at Atlanta, with over 90 flights a day to Las Vegas, I feel we are missing the boat, even though we are the only one on the water.