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US – Atlantic City is a destination in transition

Atlantic City’s beach is busy, its Boardwalk is bustling, its nightclubs are buzzing, its restaurants are full and its stores are enjoying brisk sales. In short, it’s a typical summer day at the seaside resort.

Te midden van alle parasols in het zand en bezoekers die over de Boardwalk slenteren, is het een feit dat Atlantic City een bestemming in transitie is.

Atlantic City, which used to be one of only two US jurisdictions with legalised casino gaming, is currently in the midst of an aggressive, multi-year effort to broaden its appeal among non-gamers. As gaming supply outstrips demand regionally and nationally, mature casino markets such as Atlantic City, Delaware, Pennsylvania, Connecticut and others are being impacted by the proliferation of casino gambling nationwide.

De overvloed aan gokautomaten en tafelspellen heeft het ratingbureau Moody's Investors Services Inc. er onlangs toe gebracht zijn visie op de casino-industrie van het land te verlagen van "stabiel" naar "negatief". De totale binnenlandse gokopbrengsten daalden met 1.8 procent in april en 0.8 procent in mei voor 15 van de 18 rechtsgebieden die de resultaten van mei op tijd hadden vrijgegeven om in het rapport van Moody's te worden opgenomen.

Regionaal worden New Jersey, Delaware en Connecticut geconfronteerd met aanzienlijke concurrentie van casino's in Pennsylvania, New York en Maryland.

"Bedenk dat Atlantic City gastheer was voor bijna 39,000 slotposities in 2006", zei burgemeester Don Guardian van Atlantic City. “Pennsylvania, New York en Maryland hebben sindsdien het aantal regionale slotposities bijna verdubbeld tot 36,000 - en er komen er nog meer. Gelukkig is deze trend van toegenomen aanbod en concurrentie geen verrassing voor Atlantic City. We boeken aanzienlijke vooruitgang in onze overgang naar een bestemming die minder afhankelijk is van casinogokken en meer van een uitgebreide mix van attracties om toeristen naar de Jersey Shore te trekken. "

Tourism is the third most important industry in the state of New Jersey. Atlantic County represents 20 percent of the Garden State’s tourism industry, with Atlantic City serving as the single most significant contributor. At the same time that the local casino industry is necessarily contracting in response to regional and national gaming saturation, Atlantic City is seeing significant growth in other critical sectors, including dining, entertainment and retail.

“In Atlantic County, non-gaming revenues have increased by $240m, from $4.72bn in 2010 to $4.96bn in 2013,” said Casino Reinvestment Development Authority (CRDA) Executive Director John Palmieri. “Within Atlantic City, non-gaming revenues have increased by more than $160m in just the last two years and are now approaching $1bn annually.”

The CRDA has attracted more than $700m in capital investment, with more than $290m in process, to continue to grow the market’s non-gaming amenities, Mr. Palmieri said.

Another indicator of the growth in entertainment spending is represented by the luxury tax receipts – taxes on alcoholic beverage, tickets and other amusement attractions.

In the first quarters of 2011, 2012 and 2013, these receipts averaged 20.7 per cent higher than the four-year average from 2007 to 2010, growing from $5.6m quarterly to $6.8m. On the same basis, second quarter receipts were 33.1 per cent higher, third quarter receipts were 20.8 percent higher and fourth quarter receipts were 20.2 per cent higher.

Atlantic County’s retail sector has expanded over the past three years, with 2013 retail wages and salaries increasing 8.1 per cent relative to 2010, from $381.9m to $412.9m. Wages at full-service restaurants in Atlantic County reached estimated 2013 levels that were 28.3 percent ahead of 2010 — $128.1m to $164.3m– and bars were 42.7 per cent ahead ($12.8m to $18.3m).

The influx of visitors seeking a leisure getaway has been fuelled by an innovative mix of special events, new attractions and modern facilities, said Atlantic City Alliance CEO Liza Cartmell.
“We’re proud to host A-list performers such as Lady Gaga, who did a sold-out show at Boardwalk Hall earlier this summer, and feature top-flight entertainers in free concerts on our magnificent beach,” she added. “We just concluded the Sand Sculpting World Cup and look forward to welcoming AVP pro beach volleyball back to Atlantic City in the months to come.”

In addition to broadening its appeal among tourists, Atlantic City is positioning itself for considerable growth in the meetings and conventions space. Caesars Entertainment, the largest casino operator in Atlantic City, is investing $126m in a new, state-of-the-art convention center at its Harrah’s property in the Marina District.

Since 2009, group bookings at the core group travel properties has grown from 274,000 room nights to more than 361,000 room nights – an increase of more than 22 per cent. Atlantic City currently owns just about 6 percent of room nights used for group business whereas regional convention and meetings hotels currently run at roughly 25 percent, providing the destination significant opportunity to grow its convention nights moving forward.

In 2014, the Casino Reinvestment Development Authority selected Global Spectrum to manage the Atlantic City Convention Center and Historic Boardwalk Hall. The CRDA also authorized the creation of a new convention sales organisation, called Meet AC, to be laser focused on building the group, meeting and convention business.

“Atlantic City’s revitalisation won’t happen overnight, but as we continue to diversify our offerings, attract new investment, maximize our material assets and identify new and innovative ways to promote our differentiating characteristics, Atlantic City will grow stronger and stand taller for having experienced its recent challenges,” Mr. Guardian said.