Atlantic City has had its fair share of challenges, some more exaggerated than others. After Hurricane Sandy, many TV networks reported that the famed Atlantic City Boardwalk was destroyed. Not true. More recently, the focus of many stories is that Atlantic City is losing ground in gaming revenue to nearby states. That, unfortunately for the destination, is more accurate.
“Gaming has expanded from three states to 36 states over the last 10 years. There was no way this mega growth wasn’t going to affect gaming numbers,” says Gary Musich, vice president of convention development for Atlantic City Convention & Visitors Authority (ACCVA).
However, Musich adds that gaming now represents 55 percent of the city’s revenue, down from a high of 90 percent. He says the real story is the growth of Atlantic City’s non-
“Spending in [the non-gaming] sector is up double digits,” says Musich. “Plus, our meetings business has been up for five straight years.”
Kim DePalma, director of conference operations for auto dealer and manager consultancy Dealer Communications, may be based in Boca Raton, FL, but she is a Jersey girl at heart. The last four years, she has held Dealer Communications’ Digital Conference & Exposition in Orlando. But when the event company she had been using wasn’t able to secure suitable dates there for this year’s conference, she started lobbying for Atlantic City. “I grew up in Monmouth County and still have family there,” she says. “Plus, my dad, an engineer, was part of the Atlantic City tunnel project. I am excited to be bringing the conference and revenue into the city.”
The conference, which features marketer and entrepreneur Seth Godin as the keynote speaker, will have approximately 2,300 attendees. It will be held at the Atlantic City Convention Center with Harrah’s Resort Atlantic City as host hotel.
“Harrah’s blew us away,” says DePalma. “It’s on the water, is newly renovated, has beautiful shops, great restaurants, and cafes. The standard rooms are phenomenal, as is our room rate of $75 a night.”
The city has been doing its best to diversify. “There is much more than just gaming in Atlantic City,” says Musich. “There is shopping, dining, entertainment, spas, championship golf, and the beach.”
Some may be surprised to learn that the destination was ranked No. 6 on Forbes Traveler’s “Top 10 Golf Cities in America,” listed alongside perennial golf meccas like Myrtle Beach, SC; Scottsdale/Phoenix; and Orlando. National Geographic named its boardwalk (built in 1870 as a way to minimize the amount of sand that was tracked into train and hotel lobbies) one of the top 10 in the country.
During Prohibition, Atlantic City’s seaport became a popular spot for rum running. This comes to life in Atlantic City not only through the HBO TV series Boardwalk Empire but also with tours that feature sites from the show. “You can’t get that at the corner casino,” says Vicki Gold Levi, coauthor of Atlantic City: 125 Years of Ocean Madness and a historian for Boardwalk Empire. “You can’t get the beach, the Boardwalk, the amusement rides, the good restaurants, incredible nightclubs, big stars, beach bars, and Miss America Pageant anywhere but Atlantic City.”
Gold Levi will be in Atlantic City this April for the Garden State Film Festival Benefit Night, as she is a member of the Historic Organ Restoration Committee (HORC), the group that will be receiving the proceeds from the event. The HORC has been overseeing extensive renovations of the Midmer-Losh Pipe Organ, housed in the Atlantic City Boardwalk Hall, which is the biggest organ in the world, with more than 33,110 pipes. (The Boardwalk Hall, when completed in 1929, was itself the first and largest full-service convention facility.)
“There are so many other reasons to go to Atlantic City than just to gamble,” says Gold Levi, pointing out that the world’s biggest Ferris wheel is being constructed on Steel Pier and groups can have food and drink in each gondola during their ride.
“Plus, the Steel Pier helicopter rides are hard to beat,” she says. “There are trolley tours that take you to all the Boardwalk Empire sites, not to mention some of the greatest spas in the country. Where can you get all of this outside of Vegas?”
Exhale, a leading lifestyle brand in the spa and wellbeing sector, has 22 properties in 11 top markets, Atlantic City including. Its location at Revel features 31 spa treatment rooms,
a 3,000-square-foot co-ed bathhouse with hot tubs, salt caves, and a hammam.
Julia Sutton, Exhale’s chief operating officer, is thrilled to have a location in the Atlantic City market. “Spa revenues are up in Atlantic City 15 percent over last year,” she says.
Air Service is Key
Real estate guru Jeff Gural raised $68 million for a new clubhouse that opened at the end of 2013, at the Meadowlands Racetrack in East Rutherford, NJ. He raised the funds through various equity partnerships, including Hard Rock International. His ultimate plan is to get slot machines — at the very least — in his new facility. This may actually be a good thing for Atlantic City, says Steve Norton, chairman and CEO of Norton Management Gaming and Hospitality Specialists, based in Alton, IL. Norton was an executive vice president at Resorts International, a founding director of the American Gaming Association, and chairman of the Atlantic City CVB. He reports that Gural has offered a 55-percent win tax if games are approved at the Meadowlands. This tax can be used to support Atlantic City air service by working with commercial carriers that fly into nearby Southern states, explains Norton. “Atlantic City air service would open South Jersey resorts to Atlanta; Charlotte, NC; Raleigh-Durham, NC; NorfolkVirginia Beach, VA; Nashville, TN; Richmond, VA; and Jacksonville, FL” he says.
Increased air service will help Atlantic City as it strives to diversify, he reports. Norton points out that there are 40 million residents, many of whom enjoy gaming, residing in the area from North Florida through Virginia. And there’s no gaming nearby. “There is only one casino in this part of the country: the Harrah’s Cherokee casino in the mountains of Western North Carolina,” says Norton. “Atlanta has more than 5 million residents and Hartsfield-Jackson International Airport has 40 flights a day to Las Vegas, which is three time zones away and more than twice the distance.”
Atlantic City International Airport recently underwent a $50-million expansion, which will help. Increased air service will also allow the destination to attract more meetings and conventions. As of April 1, United Airlines is flying into and out of Atlantic City International Airport with nonstop service from its hubs at Houston Bush Intercontinental and Chicago O’Hare. DePalma’s attendees are taking advantage of these new routes. United joins Spirit Airlines, which also has regularly scheduled service at the airport. “The typical convention attendee is the best guest a casino resort can have, because room rates and restaurant prices don’t have to be discounted, the customers are staying two or three nights, and they are filling rooms mid-week,” adds Norton.
Tourism groups in the city understand the importance of this market. So much so that a $1-million incentive program is in place. “Our entire destination is committed to this business and this financial program supports that commitment,” says Musich.
In April, Musich says his organization will be doubling the size of its sales staff. “Our focus is on growing the meetings, conventions, and incentives market,” he says.
Atlantic City also boasts 486,600-square-foot convention center, well regarded among meeting planners. The next biggest center is the 63,000-square-foot Mark G. Etess Arena in the Trump Taj Mahal. There has been a lack of venues in that space range, but that is about to change. Construction is underway on the new Harrah’s Resort Atlantic City conference center that is scheduled to open next year. With an estimated cost of $125.8 million, the 250,000-square-foot facility will offer 125,000 square feet of meeting space and feature two 50,000-square-foot pillarless ballrooms, each divisible into as many as 27 separate breakout rooms.
The Atlantic City Convention Center has a new general manager, Karen Totaro, a 33-year veteran of the facility management industry. Totaro will be responsible for overseeing all aspects of the convention center operation, including the booking of the facility and ensuring client and customer satisfaction.
“Atlantic City is at a pivotal point in the city’s development, and I am eager to be a part of it,” says Totaro. “The CRDA, the Convention Center Sales and support staff, and the Global Spectrum management team play a vital role in Atlantic City’s economic development. I look forward to using my experience, skills, and training to ensure a positive impact.”
Resorts Add Non-Gaming Amenities
Mohegan Sun, located in Uncasville, CT, has been quietly expanding its reach with the formation of Mohegan Gaming Advisors (MGA), which has helped Resorts Casino Hotel, Atlantic City’s original casino. MGA assumed management of Resorts and made an initial investment in the property. Together, MGA and Morris Bailey, who owns Resorts Casino Hotel, placed a strategic bet on Resorts’ future. More than $70 million in casino upgrades were made, including the addition of a $35-million Margaritaville complex.
In other resort news, Landry’s spent $150 million to transform the 740-room Trump Marina into the Golden Nugget Atlantic City.
Today, it’s all about nongaming amenities in the resorts. Tropicana Casino & Resort has added a Tony Luke’s, known for its Philadelphia cheesesteaks, and a Chickie’s & Pete’s Crab House and
Sports Bar. Approximately $35 million worth of renovations are proposed at the resort, including major improvements to its boardwalk façade, the addition of retail areas and a new fitness center, and North Tower hotel room renovations. The new façade will boast a fully choreographed, high-energy interactive light and sound show via 20-foot-high light bollards and nine LED screens.
The newest resort in Atlantic City is the beachfront Revel Casino Hotel. The $2.4-billion resort has 1,399 rooms, each with a view of the Atlantic Ocean, 55,000 square feet of retail space, 14 restaurants, three nightclubs, a 32,000-square-foot spa, two theaters — one with 5,000 seats and another with 400 seats — five pools, a 130,000-square-foot casino, and 160,000 square feet of indoor and outdoor meeting, convention, and event space. The resort declared bankruptcy a year into operation, but it emerged out of it just a few months later. For months, rumors have swirled that Hard Rock is among the entities interested in purchasing the property.
At the end of February, TJM Atlantic City completed its purchase of the Claridge Casino Hotel, which used to be its own casino but most recently operated as part of Bally's Atlantic City. The 500-room hotel, which opened in 1929, will be closed for renovations until a grand opening by Memorial Day.
Borgata Hotel Casino & Spa, co-owned by Boyd Gaming and MGM Resorts, continues to be a bright spot in Atlantic City. The Las Vegas-inspired destination resort is one of the largest hotels and tallest buildings in New Jersey. Shortly after the $1.1-billion, 43-story golden monolith opened in 2003, with 2,000 guest rooms, 70,000 square feet of meeting space, 11 restaurants, and a 53,000-square-foot spa, there were expansion plans. The Water Club, a $400-million tower, opened in 2008, 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 36,000-square-foot spa.
Shopping has always been a focus in Atlantic City and the options are expanding. Tanger Outlets The Walk, an outdoor mall, is home to more than 95 stores and restaurants including Michael Kors, Calvin Klein, Coach Factory, and Banana Republic. A 90,000-square-foot Bass Pro Shop is slated to open here in 2015, which will attract men as well as women.
“The success of The Walk paved the way for non-gaming investment in Atlantic City. We believe the last piece of the puzzle, which is Bass Pro, could be the most successful of all,” said John Palmieri, executive director, Casino Reinvestment Development Authority, at the groundbreaking.
In the effort to expand non-gaming entertainment in Atlantic City, the Atlantic City Ballet company has taken up residence at Boardwalk Hall. Another project in the works is an enclosed marketplace reminiscent of Philadelphia’s famed Reading Terminal Market, featuring a fresh market and food and retail vendors. Musich says the project is slated to break ground this spring. At the South Jersey Legislative Conference at Harrah’s Resort, Atlantic City Mayor Don Guardian announced that the Latitude 360 entertainment complex is interested in opening a complex on one of the city’s piers.
Even the Miss America pageant, which debuted as a publicity stunt in 1921 by a group of hoteliers who were hoping to extend the summer season, has returned to AC since leaving town in 2005. It’s the hope of tourism officials that with a great deal of investment and hard work, their beloved Atlantic City will once again be crowned “Jewel of the East Coast.”