Leading Meeting Professionals

Professional Convention Management Association

July 14 2014

Atlantic City Shifts Focus From Gaming To Group Business

By David McMillin

 As more cities and states work to legalize gambling, a simple law of economics is beginning to impact the country’s tables and slot machines: supply is outpacing demand. The imbalance has created a burden on Atlantic City, one of America’s oldest gaming destinations. Atlantic City used to be just one of two jurisdictions in the country with legalized gambling. Now, the destination’s neighbors are opening casino after casino. Atlantic City Mayor Don Guardian and local tourism officials are responding to the surge in gaming development in New York, Delaware, Pennsylvania and Maryland with efforts to diversify the city’s revenue sources.

“We are making significant progress toward becoming a destination that relies less on gambling and more on a diversified set of tourist and convention assets,” Guardian told reporters in a press call last week.

John Palmieri, Executive Director, Casino Reinvestment Authority, adds that the city is seeing growth in the dining, entertainment and retail sectors.

“This is part of the game plan that started in 2011,” Palmieri said. “Gaming is going to take a more modest role in the destination’s success.”

The Northeast Convention Corridor

Liza Cartmell, CEO, Atlantic City Alliance highlights that one of the main pieces of the plan is growing the destination’s group business, and that piece is already beginning to take shape. Since 2009, group bookings have grown by 22 percent.

“There is a huge opportunity for us to grow our convention nights, especially during the middle of the week and during non-summer periods,” Liza Cartmell, CEO, Atlantic City Alliance, said.

Currently, Caesars Entertainment Corporation brand Harrah’s estimates that Atlantic City only gets about 1 percent of the Northeast conventions and meetings business. As it continues to compete against major regional and national players, it’s clear that casinos will not be the factor that helps them secure new business.

To elevate the destination’s market position, Caesars has plans for a new 250,000-square-foot conference center that will complement the Atlantic City Convention Center. Caesars recently broke ground on the new facility, which will include 125,000 square feet of meeting space and two 50,000-square-foot pillar less ballrooms. The project is estimated to cost just over $125 million.

The Long Haul

Officials in Atlantic City see the promise of the future, but they also recognize that getting there will require overcoming a number of hurdles. The immediate challenges include a number of soon-to-be vacant casino properties. The Atlantic Club closed at the beginning of the year, and Showboat is closing next month. Recent reports show that the Trump Plaza will soon follow suit. Revel Casino, which is less than two years old, has filed for bankruptcy protection twice in just 15 months. Some of the newest properties may have simply pursued a demographic that doesn’t traditionally spend in Atlantic City. Revel offered luxury in-room amenities and included high-end boutiques, restaurants and night clubs.

As Atlantic City works to support the casinos that will weather the storm while adding new entertainment opportunities to welcome more visitors, officials are realistic about the road that lies ahead.

“Atlantic City’s revitalization will not happen overnight,” Guardian said. “Time is an essential element of our formula.”

There may be more hard work ahead, but Atlantic City is already making great progress. Click here to learn more about the attractions and activities that will keep your attendees busy on the boardwalk.

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