In 2020, Atlantic City casinos won $1.5 billion, 43.7 percent below the $2.7 billion won in 2019. Hard Rock Hotel & Casino was down 30.8 percent. Ocean Casino Resort saw a relative dip of 14.9 percent, making it best in show in the city.
With Covid-19 on the wane, 2021 looks a lot more promising. Atlantic City casinos won $493.2 million through March, a 0.5 percent decrease over first-quarter 2020. Hard Rock reaped $80.9 million, a 45.3 percent jump over the same quarter in 2020. Ocean rose 29.6 percent.
These figures explain why millions of dollars’ worth of upgrades are planned at properties across the resort town. Hard Rock will spend $20 million across the board—on suite renovations, a new Starbucks and additional slots and table games. It will also upgrade the 5,000-capacity Hard Rock Live arena and Sound Waves, add a new dining outlet and refresh its beachfront amenities.
Growth Mode
“Since reopening in July, our success is evidence that we have opportunity by investing in our product and customer experience to continue to grow,” Hard Rock Property President Joe Lupo told GGB News.
That spirit seems to be pervasive. On the Boardwalk’s northern end, Ocean Casino has allocated $15 million for upgrades to its casino floor as well as outdoor amenities like pools, cabanas and even the beach out front. The property will open a high-limit table games area, an Asian gaming space and two new guest lounges for rewards-card holders.
Harrah’s Atlantic City will add three new restaurants, a new spa and a renovated lobby bar. The additions are part of a pledge by Caesars Entertainment to spend $400 million on its three properties in the town. And Bally’s Corp. is plowing $90 million back into its namesake Atlantic City casino.
It’s an axiom in the hospitality business: Don’t rest on your laurels.
Even coming out of the Covid crisis, casinos “must continue to invest in their properties to keep them looking fresh,” said Jane F. Bokunewicz, institute coordinator at the Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism at New Jersey’s Stockton University. “Hotels rooms can become dated quickly if not renovated frequently, and if a property begins to look run-down, guests will go elsewhere. So a portion of the proposed investment is just the routine cost of doing business.
“We’re starting to see some proposed investment in non-gaming attractions like the Showboat water park,” she added. Bart Blatstein, who owns the former Showboat Casino Hotel, recently announced that in addition to the planned $100 million water park, he’ll add a massive arcade; an 8,000-capacity outdoor concert hall; and a beer garden. The Showboat ceased to operate as a casino in 2014.
Bringing Back MICE, Entertainment
Hard Rock’s reinvestment plan speaks to a level of optimism, even in trying times, said Lupo. “Our growth over the past year, during unprecedented circumstances, also speaks to guests’ trust in our property and enjoyment of their experiences.”
The Hard Rock will renovate 66 Celebrity and 25 Roxy suites and add new flat-screen TVs and LED lighting. The Starbucks will open in late May, with Boardwalk access adjacent to the Hard Rock Café. A new restaurant will also open to serve increasing volumes of guests. The casino will expand its Asian and high-limit areas and add more table games and slots—a testament to seven months of revenue growth.
“Amenities like new restaurants and entertainment attractions are more exciting,” said Bokunewicz, “because they attract new guests to visit the casino and frequent customers to return to see what’s new. This suggests that operators have confidence that there’s growth potential in the market.”
Conventions and meetings play a big part in making these investments pay off, she added. In 2019, guests at conventions, meetings and trade shows booked through Meet AC used 390,566 room nights in Atlantic City. That doesn’t include rooms booked for gatherings held in the individual casinos.
Although this market segment represents a small portion of the total room nights available in Atlantic City casinos—more than 5.4 million in 2019, according to the state—”it helps to smooth demand in off-season months when general tourism slows,” she said.
But conventions bring their own issues, Lupo said. “We really need convention space occupancy levels to increase to over 250, where it stands currently. The convention and sales business books months in advance, so the current level is severely hindering our ability to rebook. We’re confident we can do it safely and under guidelines, like the other pieces of our business as well, it is just so important to our midweek occupancy and business overall.”
Booking major entertainment also poses a problem given the restrictions still in place in New Jersey, as performers also need advance time to schedule tours. “We’re waiting for occupancy guidelines to loosen up before I get too excited about summer entertainment,” Lupo said. “While we could possibly have a very busy entertainment schedule, that’ll only come if the arena can operate at 100 percent occupancy.
“So, we’re still tentative, but hopeful.”
