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Top-10 ways to fix Atlantic City4 August 2014
The Atlantic Club closed in January. Atlantic City's overall June gaming revenue, which includes online gaming revenue the casinos didn’t have last year, was down 5.7 percent from June of 2013.
Unless things change, it’s only going to get worse. The competition is getting tougher. Philadelphia will have a second casino soon. MGM is building a casino just outside of Washington. New York might approve a casino near New York City soon. And a casino may be built just outside of Boston if the voters approve casino gaming in Massachusetts.
With increased competition on the way and Internet gaming catching on slowly, Atlantic City has to move quickly to halt and ultimately reverse its revenue slide. What does it need to do to reinvent itself as a true resort destination and not a gambling town? Here are 10 suggestions:
10. Say no to a northern New Jersey casino
Atlantic City’s primary problem is that its feeder markets for the brick-and-mortar casinos are being cut off. Delaware, Pennsylvania, Maryland, Connecticut and New York all have casinos now, making the trip to Atlantic City unnecessary. There’s no need to add North Jersey to that list, especially since Garden State residents have online gaming -- a convenient option -- already available to them.
9. Keep Revel open
Revel is a gorgeous casino. It cost $2.4 billion to build and it looks like it. Unfortunately, the casino’s management hasn’t been as good as its architecture, and it has declared bankruptcy twice now.
If you’re looking for examples of mismanagement, look no further than its food selection. Revel was targeting high-end customers, who expect restaurants that provide a memorable fine dining experience. Unfortunately for Revel, its restaurants didn’t deliver on that high-end experience. What’s the point of operating a luxury brand if you’re not going to provide a luxury experience?
Atlantic City needs to find a buyer for Revel. Steve Wynn, anybody? This is his sort of property. Even if Wynn isn’t interested, Atlantic City has to find someone to acquire the property. Revel has the potential to be one of the city’s crown jewels. It just needs the right owners and executives to make it happen.
8. Close more casinos
Even though Revel needs to stay open, that doesn’t mean more casinos shouldn’t close. During the summer, Atlantic City has occupancy rates in excess of 90 percent. But that drops below 70 percent after Labor Day. Nearly one-third of Atlantic City’s hotel rooms are unoccupied for large stretches of the year. The answer to this problem is simple. Shut down more casinos. Yes, the closures of the Atlantic Club and the impending closures of Showboat and the Trump Plaza will help this problem. With Atlantic Club and Trump Plaza out of the picture (and Revel still open according my plan), Resorts and the Golden Nugget are next up on the chopping block if you go by gross gaming revenue.
7. Embrace the boutique
Now that we’ve slashed off two more properties, it’s time to start rebuilding the city. Atlantic City will need hotel rooms during the summer, especially since we’ve slashed capacity. So let’s replace the shuttered casinos with two boutique casinos with 200 rooms apiece. Let’s throw in some funky lounges (one for each hotel). This should attract a young, affluent clientele. And there are fewer rooms to fill up during the winter.
6. Expedite new development
Atlantic City needs help now. New projects need to given the green light, zoned and built faster than any city in the country. That’s the only way this resort town is going to survive. So make it happen.
5. Secure the streets
The goal here is to turn Atlantic City into a true resort destination. One of the keys to making that happen is ensuring the safety of visitors. In Las Vegas, tourists generally feel safe walking the Las Vegas Strip 24 hours a day, seven days a week. That’s not true in Atlantic City. People visiting Atlantic City don’t feel safe if they venture a few blocks from the boardwalk. That has to change.
4. Great restaurants
In order to get people to visit Atlantic City, you need more than casinos. Most of Atlantic City’s customers live a short drive away from a casino. Gambling is not enough of a reason to visit. If you pair gambling with other great entertainment options, however, then you’re giving people a reason to visit. And great restaurants have to be part of the equation. Most of the feeder markets to Atlantic City have a great food scene. And if Atlantic City can’t compete with that, they’re not attracting any visitors.
3. Entertainment/retail districts
Las Vegas successfully diversified its revenue streams years ago. And Atlantic City needs to do the same. Tourists to Las Vegas are splitting their spend between gaming and non-gaming pretty equally. And on weekends, night clubs are making more per square foot in Las Vegas than the gaming floor. That needs to start happening in Atlantic City. Visitors to Atlantic City need more entertainment options. They need bars, restaurants, clubs and vibrant music venues. They need great stores to browse. And it all needs to be walkable. The solution? Dedicated entertainment and retail districts that are designed to be walkable. Visitors can walk from restaurant to restaurant, comparing menus. They can go clubbing or visit a cool lounge. And the can go shopping through cool stores during the day. This gives Atlantic City visitors a much needed non-gaming option and allows the city to diversify its revenue streams.
2. Focus on conventions
How do you get people to Atlantic City during the week? Make them come for business. New York and Philadelphia are expensive places to host conventions. Atlantic City doesn’t have to be. If you pair great restaurants, bars, and entertainment with lower costs and high-quality convention space, you have a winner. Of course, you need to the great restaurants, bars and entertainment to pull this off.
1. Redevelop the Boardwalk
The Atlantic City Boardwalk is cheesy at best and depressing at worst. Its prime real estate is occupied by massage parlors, cheap pizza joints and tacky t-shirt shops. What a waste. The fact that Atlantic City hasn’t managed to redevelop the Boardwalk is an indictment against every leader Atlantic City and New Jersey has had in the last 30 years. It’s embarrassing. And it needs to change in a hurry. Bring in great restaurants. Bring in great stores. Build a giant Ferris wheel. Do something!! This space has been wasted for decades. And if Atlantic City doesn’t figure out how to use it, it deserves to drift into irrelevancy.
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