Wednesday, September 2, 2015

Borgata bucks the odds, fends off Revel

At the time, it looked like the safest bet in Atlantic City.

Borgata bucks the odds, fends off Revel

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Despite the predictions of many, Borgata has maintained its market-leader status in the wake of Revel's opening. Photo: www.atlanticcitynj.com

This is the full version of the story that appeared in today's Daily News:

At the time, it looked like the safest bet in Atlantic City.

Prior to the April 2 “soft” opening of the $2.4 billion Revel mega-resort, the smart money said it would be Borgata Hotel, Casino & Spa, the city’s market-leader since its mid-2003 opening, that would take the biggest hit, due to the two properties’ similar marketing strategies and their shared emphasis on upscale facilities and amenities.

But the so-called experts weren’t even on the outskirts of accuracy. Wednesday’s Atlantic City gaming revenue report represents the sixth straight month the Big B has significantly out-earned its rival on the far eastern end of the Boardwalk. According to figures released by the New Jersey Casino Contol Commission, Borgata grossed $55.3 million (good for a first-place finish), while Revel placed eighth (out of 12 gambling dens) with $16.9 million.

So, how has Borgata managed to so far fend off what was supposed to be the greatest-ever challenge to its dominance of AyCee’s gaming industry?

For starters, executives at Borgata, which is located at Renaissance Pointe on the bay side of the city, did not ignore the potential game-changer that was on the horizon prior to revel’s debut.

“We were not going to lie down. We were not simply going to hand over our customer base,” said Joe Lupo, Borgata’s senior vice president of operations.

To that end, Lupo offered, the casino’s braintrust devised a strategy whose basic message was, “Just because there’s a new property doesn’t mean it’s a better property.”

The centerpiece of the pre-emptive game plan was last year’s $50 million makeover of Borgata’s 9-year-old hotel tower (not to be confused with its  4-year-old Water Club). In addition to this project, which Lupo cited as the most important (and expensive) part of the plan, Borgata also added the Long Bar, a public cocktail lounge, the Society Club, a private retreat for high-stakes gamblers and Vintage, a wine outlet. A million dollars also went into upgrading the poker room, Atlantic City’s preeminent card parlor.

But Lupo also credited his casino’s ongoing success to elements that can’t be covered just by cutting a check.

“Since we opened in 2003, we’ve always had the best product,” he bragged. “I still believe firmly that we have the best product--the layout, the design, and, even from the standpoint of accessibility, getting into Atlantic City. I think our customer base finds it easy to navigate, very accessible. I believe our product is second-to-none.”

Lupo also spoke of the importance of his hotel’s reliance on customer service, its inventory of restaurants affiliated with such celebrity chefs Wolfgang Puck and Bobby Flay, and its A-list-filled entertainment roster (recent and upcoming headliners include Tony Bennett, Jerry Seinfeld and John Legend). But according to one casino business observer, such “front-of-the-house” assets are just part of the story of Borgata’s success in the wake of Revel’s appearance.

Steve Norton, CEO of Norton Gaming Management LLC, a casino consulting firm, suggested Borgata’s corporate bloodlines have played a crucial role. Unlike Revel, which is backed by financial institutions otherwise unconnected to the gambling realm, Borgata is owned and operated by Las Vegas-based Boyd Gaming, one of the industry’s longest-established casino operators.

“It’s good management. They’ve run the property very well,” said Norton, who was a Resorts International executive when AyCee’s first legal casino opened in May, 1978. “But that has a lot to do with being part of Boyd Gaming and having a history behind it. I think you have to give credit to that background.”

Norton also pointed out Borgata’s 2,800-to-1,900-hotel room advantage over Revel—a key to Atlantic City’s fiscal health because the day-trip market has all but evaporated since the introduction of casinos in eastern Pennsylvania and parts of the New York metropolitan area.

Not that Borgata hasn’t seen its bottom line take a hit because of out-of-state competition. Last month’s $55 million haul represents a six-percent decrease from September, 2011. But, said Norton, while some Atlantic City casinos have seen their revenue drop by as much as 40-to-50-percent in the past five years or so, Borgata’s hit has been a far less-drastic 10-to-12 percent.

Linda Palmer of Hackettstown, N.J., didn’t seem too concerned with the whys and wherefores of the gambling realm’s issues. As she and two friends grabbed a bite to eat in Amphora, Borgata’s slot-players lounge, she didn’t hesitate when asked the reason why Borgata remains her casino of choice.

“I think Borgata makes it very easy to get comps. You don’t have to go to a machine and get a voucher,” said Palmer, referring to a common industry system. “You just use you [rewards] card.” 

Her tablemate, and fellow Hackettstown resident, Sientje(CQ) Smith, gave her props to Borgata based on something far more fundamental than free food and hotel rooms.

 “I like the safety,” said Smith. “You can’t get to your room until you go past the security guard [in the hotel elevator lobby] and show your key.”

 

 

 

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About this blog
Philly native Chuck Darrow has literally covered Atlantic City’s casino scene since Day One: He was there on assignment the night in November 1976 when voters approved legalized casinos.

Since then, Chuck has covered the town and its gaming industry for several area newspapers -- which is why, in some circles, he’s known as “Boardwalk Charlie.”

You can reach Chuck at darrowc@phillynews.com. Reach Chuck at darrowc@phillynews.com.

Chuck Darrow