Atlantic City Fights Back

The destination redefines itself in the face of new competition and old challenges

To the outside observer, Atlantic City's glass-clad towers, sparkling lights, and historic boardwalk are powerful and impressive. But a look under the flashy surface reveals that Atlantic City, a tourist destination since 1870 when it unveiled its first boardwalk, is a city fighting to stay relevant.

Its competition has never been so fierce. Atlantic City is losing ground in gaming revenue to Connecticut, Delaware, Maryland, and West Virginia. Last year, New York surpassed the destination in gaming revenue even though it has not yet legalized the full spectrum of casino gaming. Pennsylvania, a state that many do not instantly associate with gaming, now has 10 casinos that include Mohegan Sun at Pocono Downs, Sands Casino Resort Bethlehem, Mount Airy Casino Resort, SugarHouse Casino in Philadelphia, and the Valley Forge Casino Resort.

According to the North American Gaming Almanac released by Casino City Press, New Jersey ranks fourth on the list of top gaming states. Nevada sits at the top, with $10.5 billion in total gaming revenue, followed by California with $9.7 billion, and New York with $5.4 billion. New Jersey brought in $4.4 billion in total gambling revenue in 2010, down from $6.4 billion in 2009.

"Atlantic City went wrong from the very beginning when it positioned itself as a convenience gambling town and not a resort town," says Vin Narayanan, managing editor of Casino City, a Newton, MA-based company that gathers and publishes data, information, and news about the gambling industry. "It was easy to bus people in from all over the Eastern seaboard for the day and not worry about the resort infrastructure."

Today, Atlantic City is focusing on much more than just gaming. "I have been saying for years that in the future, one would not have to go far from home to pull a lever on a slot machine. Well, the future is here," says Jeffrey Vasser, president, Atlantic City Convention & Visitors Authority. "We have to continue to focus on compelling reasons to come to Atlantic City and that's not just for slot machines. It's for retail, dining, entertainment, spa, golf, beaches, and meetings and conventions."

Betting on Diversification
In order for Atlantic City to rise above the competition, diversification and reinvention will be vital, says Narayanan. "Take Las Vegas. On the weekend, the big nightclubs make more money per square foot than the actual gambling floor. Revel is going to help, but it's going to take more than one property to save Atlantic City," he adds.

Narayanan has a few suggestions:

• Bring in more good restaurants outside of the casinos.

• Eliminate some of the schlocky souvenir shops on the Boardwalk.

• Add compelling special events.

• Constantly reinvent.

Narayanan says that every time he visits Las Vegas, things look a bit different, and that's an experience that isn't common enough in Atlantic City.

Now, however, change is happening. The city's most recent marketing push has been focusing on the wide diversity of experiences the destination has to offer. "If you look at our new 'DO AC' campaign that has been very successful, gaming is not a part of it," says Vasser. "It's about raising the level of awareness of other ancillary amenities in the city."

The new beachfront Revel property fits the campaign perfectly as it is marketed more as a lifestyle resort than a gaming destination. The months-old resort, which cost a staggering $2.4 billion and received more than $260 million in tax reimbursements, promises a full entertainment experience with celebrity chefs, a spa with "wow" factor, and big-name entertainment.

Revel opened in April and has 1,898 rooms, each with a view of the Atlantic Ocean; 55,000 square feet of retail space; 12 restaurants; two nightclubs; a 31,000-square-foot spa; two theaters - one with 5,500 seats and another with 700 seats; 10 pools; a 150,000-square-foot casino; and 160,000 square feet of indoor and outdoor meeting, convention, and event space. Some see it as the emotional lift the city needs.

"We realize we couldn't survive on gaming revenues alone,"says Lori Beth Gumnitz, Revel's national sales director. "It's a fortunate thing that Revel has been designed for other purposes and offers a wide array of experiences for our guests. We are a complete, full-service resort with amenities that have not existed previously in Atlantic City or the northeast market."

Vicki Gold Levi, co-author of Atlantic City: 125 Years of Ocean Madness and a historian to the HBO series "Boardwalk Empire," is blown away by Revel.

"It should be a game changer," she says. "It's a vertically integrated resort with pools, spa, shops, nightclubs, a burlesque show, and a beach with a beach bar. If someone just wants to gamble they can go around the corner. If they want the experience of all these things plus the boardwalk, rolling chairs, Steel Pier, and beach, they should come to Atlantic City."

Reflective of a trend happening in the entire hotel and resort industry, Revel has partnered with a name-brand spa and celebrity chefs to bump up its offerings. Exhale was brought in by Revel ownership to complete its vision of a spa with a brand- and hospitality-driven paradigm. The spa is a shrine to wellbeing with 35,000 square feet encompassing a coed bathhouse, wet and dry lounges, 32 therapy rooms, and a gym. A mind/body studio for the wildly popular core fusion and yoga classes is in the process of being built.

"A spa like this is a first for Atlantic City," says Exhale's COO Julia Sutton. "Leveraging Exhale's brand, retreats, and proprietary class programming draws the local community as well as our dedicated guest base from our 19 other U.S. properties, so we are able to positively influence Revel's overall economics."

The last time there was such hope surrounding a hotel opening was in 2003, when the first pair of dice rolled on a craps table in the Borgata Hotel Casino & Spa. Atlantic City's location has always been a strong draw, but the city has lacked a variety of incentive-quality properties until now, when it boasts both the Borgata and Revel.

Shortly after Borgata, a $1.1-billion, 43-story golden monolith, opened in 2003 - with 2,022 guest rooms, 70,000 square feet of meeting space, 12 restaurants, and a 53,000-square-foot spa - there were expansion plans. July 2008 saw the opening of The Water Club, a $400-million tower with 800 guest rooms and suites, 18,000 square feet of meeting space, retail shops, culinary creations from the likes of Geoffrey Zakarian, and a two-story, 36,000-square-foot spa.

Not All Glitz and Glamour
Atlantic City still has work to do. When leaving the boardwalk, you're likely to see vacant lots, abandoned buildings, and homeless people.

"This is not the Vegas Strip or Disney World. This is an actual living city and there is improvement that needs to be made, not just for tourists but for the people of Atlantic City as well," says Gold Levi.

Improvements are noticeable. The Casino Reinvestment Development Authority, which uses casino investment obligations to improve the city, has a Special Improvement Division, which recently joined forces with the Atlantic City Alliance. This newly created nonprofit plans to improve the boardwalk.

New lighting has been installed and a 3-D sound-and-light show has been created that illuminates the facade of Boardwalk Hall in the evenings all year long. Boardwalk Ambassadors, on foot and on bicycles, have been employed to answer questions and provide a sense of security simply by their presence.

Twenty new police officers have been deployed in the city, where they will help provide an enhanced law enforcement presence in the city's tourism district. In 2010, the governor helped create the Atlantic City Tourism District, directed by the state's Casino Reinvestment Development Authority, which encompasses the beach, boardwalk, casinos, Marina District, Gardner's Basin, Bader Field, and downtown retail districts.

Beyond the boardwalk, the Atlantic City Alliance's "Do AC" ad campaign has created a buzz. Part of the city's $20-million rebranding effort includes ads that end with the catchphrase: "Do Anything. Do Everything."

Atlantic City, often portrayed as a gritty place, has had its fair share of obstacles to overcome. Even the Miss America pageant, which debuted there as a publicity stunt in 1921 by a group of hoteliers aiming to extend the summer season, left town in 2005.

Reminders of Miss America's history can be found all over the city. The Sheraton Atlantic City Convention Center Hotel showcases memorabilia and pageant treasures. In front of the hotel, a statue commemorating past pageant master-of-ceremonies Burt Parks stands ready to crown the next successor. It's the hope of tourism officials in this famed destination that with a great deal of investment and hard work, their beloved Atlantic City will once again be crowned "Jewel of the East Coast." SM