Atlantic City is experiencing a chaotic domino effect as gambling houses close one after the other, slowly turning the city into the ghost town it initially was. The closure of Caesar’s Showboat, The Atlantic Club and Trump Plaza and Hotel will account for nearly 5000 job losses in Atlantic City, and this trend is set to continue as more and more gambling houses cave under the pressure of dwindling patrons. Revel, another once-prominent gambling house has folded its cards looking to sell due to bankruptcy threatening over 3100 jobs. So, what are we learning from this?
Neighbouring Competition and the Downfall of Atlantic City Casinos
The competitive nature of the industry, with casinos being legalized and opened in neighbouring states like New York and Pennsylvania, is cited as a primary reason for the downfall of casinos in Atlantic City. This is ironic as, once a dull ghost town without any notable prospects, the first established casinos began in 1976, bringing in tourists, locals and money. For three decades the industry boomed until growth took a drastic decline slashing the jobs it once bountifully created.
While the macro-level excuse of increased competition in neighbouring states serves as justifiable, this skillfully hides away the decisions that marketing managers and executives made on a micro-level that slowly chipped away from the city’s appeal.
Plans to Build Attractions?
In order to attract appeal among consumers, it’s no secret that the surrounding attractions at casinos are a vital part of its performance. Plans to increase arts and entertainment ventures and to attract gay tourists, who have a high disposable income, have fallen flat. How did this happen? Complacency and dull responses to consumer decline are equally responsible for the fall of Atlantic City. On a business level, marketing managers and executives seemed to have lacked the creativity and imagination to create compelling attractions for visitors to drive passed casinos in their own states to Atlantic City.
While there was talk of a five year turnaround plan for the city from Governor Chris Christie in 2010, the questions that should be raised are how many of these plans were put into action, how many conventions challenged and how were attempts at measurable growth executed? Until we have answers to these questions on a micro-level we only have the usual reasons to fall back on.
Was the effect of competition and high real estate taxes truly too overwhelming to conquer? While many executives may answer ‘yes’ with overwhelming certainty, much introspection is needed to arrive at a firm, resounding conclusion.
Learning from Past Mistakes
For individual casino brands looking to use the past mistakes made at Atlantic City as a learning curb, it would be wise to assess the full package that a casino offers to patrons, not as a single business entity in a gambling hub, but as a tenant in a pleasure-producing community of businesses that make up a whole area. Also, honestly ask yourself the basic questions that no business is exempt from: What more can I do to attract and satisfy customers and is my staff capably trained to do this? A million questions will undoubtedly follow and before you know it, you could be creatively dealing with a challenging situation instead of leaving the issue of customer decline to a predefined macro-economic fate.