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The Hotel Guy – Atlantic City Does Not Get It

Once upon a time a famous boardwalk city decided that if they allowed gambling it would cure the allying city. The city officials pondered the idea and after much discussions and arguing with the powers to be, Atlantic City was about to be reborn. Land was acquired, sites where approved and the rush was on. Atlantic City was going to be next Las Vegas. This was of course their first mistake, one of many. Gaming board was set up regulations adapted and unions galore.

The first thing that the planners did wrong was to try and copy Las Vegas and fit it in to Atlantic City. There is only one Las Vegas, there are many gambling places around the world, but they did not copy the Vegas Style. The majority of the hospitality executives that relocated there came from Las Vegas. The mentality was Vegas style business. I had the opportunity to go, however I declined, not because of salary, it was because I did not have the power to make changes. I had envisioned Atlantic City differently than the rest of those that went.

Atlantic City should have had its own identity, failed to do so instead it took on the Las Vegas identity. The casinos, those that have been successful are quiet. Stop to look at how many Vegas properties opened there and just as quickly got out or were sold. Why? The Vegas style management was not working there, and problems started to show through. Billion dollar properties have been sold for 3/4th of the original value. (Trump properties), now the newest property that opened with much fanfare a year ago Revel Hotel & Casino, which now is planning on filing chapter 11 bankruptcy protection.

The Revel was designed to be a Las Vegas style resort destination property, I guess they did not do their homework very well. Every hotel and there have been many has failed with this theme. Atlantic City should have had its own identity, this would have set it apart and, that would have been the difference between failure and success. The fact is also that there have been a lot of new gambling establishments sprouting up in the northern state. Markets change, and Atlantic City did not take advantage of it, or revamped their strategy to offset the competition.

When Disney moved to Orlando, it did not copy Anaheim, Orlando had its own identity, even though the rides are similar, they identify differently. Same goes for Paris, France. Atlantic City has been plagued with financial problems, political, and others. The quarterly returns show that the city is not generating what it should, it is losing money, and revenue share to other properties out of state. Where are the revenue managers and general managers? What are they doing? This is a problem that need to stop.

Prime example of bad management (Trump Plaza was built in 1984 at a cost of 210 Million dollars) recently sold to Mereulo Group for 20 Million. What a barging people…. That is exactly what I mean bad management all around, and don’t tell me no one saw it coming, they did, they just did not have the courage to change the guy at the helm. I know I can sit here and criticize because it has already happened. I saw the writing on the wall back in the late 80s people, the problem was that everyone else was looking at the large 6 figure salaries that were being offered to move. Now of course the state is offering huge tax incentives to get business to stay, or return. Revel has approximately 1600 or so employee’s that stand to lose their jobs, or at least a good portion of them. It will depend on how it reorganizes itself. This should never happen, especially now they keep blaming the economy, well the economy is a lot better, but it is not the blame, the blame is the people running that hotel.

Me personally I would be asking for a salary refund from those people running the hotel. I have worked as a CFO before. I can tell you real quick if we are headed over the cliff, and if so let’s fix it before we go over. Where were these people? My opinion filing chapter 11 is a cop out, don’t get your britches in an uproar, some are or were justified. Even Las Vegas has problems with occupancy and rate, however they have managed to overcome it. Want a success story look at the Cosmopolitan Hotel here is a hotel that could. With all of its problems and debit it managed to come out on top. It’s a great hotel with excellent marketing programs that have kept it one of the hot spots in Las Vegas. Call them up ask for help.

Atlantic City if you don’t wake up and get your own identity you will become just another failed hotel town. Major Players will seek other venues, and you will slowly sink in to the ocean.

The Hotel Guy…

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Alan Campbell
Alan Campbellhttp://hmsco1.wix.com/hmsco1
ALAN is a highly accomplished, results oriented Hotelier with many years of experience in developing and delivering strategies and implementing solid organizational cultures that addresses the needs of the customer, colleagues, owners, community and industry. He has been in Las Vegas for over 30 years and has worked for the major strip hotels. Alan has spent some time in California, Los Angeles where he worked for the Radisson and Sheraton hotels. He considers the hospitality industry the best job in the world – it is the only place that both king’s and Paupers will visit you. Alan is also a featured contributor for Ehotelier.com, the “Global Hotelier’s Community.”

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