Atlantic City Hotel and Lodging Association
September 2012 Meeting Summary
ACHLA Meeting Recap:
Gary Van Hettinga
President/CEO, Resorts Casino Hotel
Whether you missed our recent meeting at Resorts Casino Hotel on Thursday, September 27, 2012, or simply want an easy reference to the key messages, here is a quick recap.
Resorts Casino Hotel’s new CEO Gary Van Hettinga delivered his first public remarks to the Atlantic City Hotel and Lodging Association (ACHLA) at our September meeting. Van Hettinga is doing double duty as CEO of Resorts and president of Mohegan Gaming Advisors, the management subsidiary of Mohegan Sun and the company that recently took over operations at the Atlantic City casino.
He credited Resorts for having the attributes that made it an attractive alliance with Mohegan Sun. “The very first tour we took of the property, we were impressed by the friendliness of the team members,” said Van Hettinga. “They didn’t know who we were, yet they greeted us warmly.” The tour also showed that Resorts was an asset with potential, from its distinctive architecture to its recent renovations.
Mohegan Sun surveyed its customers in Connecticut to ask whether they’d travel to Atlantic City if their comp dollars could be used interchangeably between the two casinos. The response was overwhelmingly positive. “One hundred percent of the respondents said they would visit Resorts,” announced Van Hettinga. The average number of trips per year worked out to about four, according to the survey.
In addition to cross marketing, Van Hettinga mentioned other opportunities presented by the partnership. Management could leverage the Mohegan Sun buying power to save as much as $2 to $3 million for Resorts purchases. Mohegan Sun also would benefit from being able to market a destination that had the Boardwalk and Atlantic City Ocean at its doorstep, and it could build on Atlantic City Alliance advertising and marketing efforts.
He showed a rendering of the anticipated Margaritaville project, a partnership with singer-songwriter Jimmy Buffet that will result in a $35.5 expansion at Resorts. The expansion will include a Margaritaville Restaurant/Bar & Gift Shop, the Land Shark Bar/Grill & Gift Shop, a beach bar, and a bar in the main casino named 5 O’Clock Somewhere.
Van Hettinga also announced plans for other property enhancements:
· Food court to open next spring
· Renovations to the parking garage and surface parking
· New VIP lounges for premium casino guests
· Renovation of the Ocean Tower rooms
· Casino reconfiguration
· Additional retail
“We have a lot to offer in Atlantic City,” noted Van Hettinga. “But Atlantic City may be underselling itself by heavily discounting room rates.”
A quick online search revealed that 8 of the 12 Atlantic City casinos published rates ranging from $49 to $69 for January 9, 2013, a date chosen arbitrarily. The other four casinos did not have published rates. By contrast, 30 of 72 hotels at Baltimore’s Inner Harbor averaged $183 for the same date. “I think that Atlantic City has more to offer than Inner Harbor,” noted Van Hettinga. “We are boxing ourselves in with these rates. They become a ceiling for what group sales people can offer.”
According to a chart displayed by Van Hettinga, the average daily rate for Resorts in 2011 was $69.21 with 76 percent occupancy. As of June 2012, it was at $74.34 with 79 percent occupancy. The Atlantic City casino property average daily rate is $98 with 82 percent occupancy. Higher rates would position Atlantic City as a more upscale tourist destination, he noted.
In gaming, Atlantic City also is not as competitive as New York or Connecticut in promotional gaming credits as a percentage of slot wins. “We tend to go deeper into our lists to give away rooms and fill the hotel,” he said. Atlantic City averaged close to 20 percent while New York and Connecticut hovered around 10 percent or less.
Van Hettinga noted that Atlantic City would continue to benefit from the $3 billion in gaming revenue but encouraged the industry to change its focus. “We need to compete more on product and service, and less on pricing,” he said.
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