Can Hard Rock Save Atlantic City From Itself?

Over the five years or so, getting lucky in Atlantic City, New Jersey, was a bit of an oxymoron. The city itself was quite down on its luck, with five casinos—including four that had been around for more than three decades—shuttering since 2014.

On June 28, though, Hard Rock Hotel & Casino Atlantic City will fling open its doors, taking a big risk in a city that seems to have the odds stacked against it. It’s housed in the former building of Trump Taj Mahal (closed in 2016), renovated to the tune of $500 million, with a 6,000-seat arena; a 1,400-seat entertainment venue; 2,000 guest rooms; 2,100 slot machines; a spa; and two dozen dining options, including Japanese restaurant Kuro, seafood-forward Council Oak Fish and Sugar Factory confectionary.

If the move looks surprising from the outside, it’s one that the executive team—including Atlantic City veteran Matt Harkness, property president, and John Lucas, COO of Hard Rock International—have put great thought into.

“[Hard Rock] is really about entertainment; it’s not just a hotel company or a restaurant company,” says Lucas. “We thought it was a great way to come into this market, help regrow the market and bring some of the business that left back by providing a lot more than slot machines and table games.”

They’re planning to leverage the entertainment market by bringing in names like Carrie Underwood and Pitbull for opening weekend, plus a steady stream of classic rock, country and pop stars in the coming months. The hope lies in drawing significant business from the large population base within a few hours’ driving distance from the city who may not have considered coming to the destination before, or who may not have gaming at the top of their vacation bucket list.

Hard Rock isn’t the first to point out the need for Atlantic City to diversify.

While the city’s long touted itself as the No. 2 gaming destination in the United States (second only to Las Vegas), the formation of Meet AC, a sales and marketing force supporting Atlantic City Convention Center, in 2014 aimed to shift focus to attracting meetings to the area. The group made a big splash in summer 2016 when Atlantic City hosted MPI’s World Education Conference, drawing more than 2,000 meeting planners to the area.

“Hosting MPI was a chance for us to tell everybody in the meetings market that Atlantic City is now interested in hosting your future meeting or convention,” says James T. Wood, Meet AC’s president and CEO, noting Atlantic City has seen growth in its meeting markets each of the last four years.

Michael Massari, chief sales officer for Caesars Entertainment Corporation and a native to the region, has also been an advocate for meetings in Atlantic City. He was involved with the addition of Waterfront Conference Center to Harrah’s Resort Atlantic City in 2015, which added 100,000 square feet of meetings space to the venue.

“Five or 10 years ago, you didn’t see customers like Olympus, MassMutual or EY having multi-thousand-person [conferences] in Atlantic City, and now you do,” says Massari, noting the addition of Hard Rock—which will have 140,000 square feet of meeting space, including the arena—will only help the city’s quest to draw more meetings.

The city as a whole, though, still has a long way to go to become a meetings powerhouse to rival, of course, its top competitor in Las Vegas. “I’d like to see three meetings facilities as large as the ones we have at Harrah’s,” says Massari. “If that happens, I think Atlantic City will [see a] large component of the meetings market.”

As much as entertainment wizards like Hard Rock hope to dazzle with concerts, and champions like Massari focus on building meetings business, gaming still has a stronghold in Atlantic City. “We’re still probably a 90 percent gaming market,” says Wood.

From a bottom-line standpoint, that’s good news. “One of the things Atlantic City has going for it is a very low gross gaming tax on gaming revenue,” Harkness points out. “In New York, it can be as high as 60 percent; it’s about 50 percent in Pennsylvania, but here it’s around 9 percent. What that does is it allows companies to reinvest more easily back into their properties.”

That creates more jobs, adds Lucas. Hard Rock, in fact, has generated huge interest among the hospitality industry in that respect: The property received more than 50,000 applications for 3,500 positions in advance of opening, says Harkness.

If gambling remains the top industry in Atlantic City, how will May’s Supreme Court ruling to legalize sports betting affect the city’s future?

“It’s certainly going to drive visitation,” predicts Wood, noting legalization of sports betting in New Jersey—and the likely addition of sports lounges at its existing and new hotel-casinos—will probably bring big business to town over sports weekends, especially during NFL season. However, he doesn’t anticipate sports betting to be the hot new attraction in town.

“People come here for food, entertainment, the boardwalk, the ocean. When they come here they’re going to make…a weekend out of it; they’re not going to spend all their time here sports betting,” says Wood.

With all the ways Atlantic City is trying to convince potential visitors they are not, in fact, a dying destination, there’s one big thing still missing.

“There are things that families can do, but [Atlantic City] really needs to develop more kid-friendly activities,” says Jennifer Street, owner of Fly By Nite Travel based in North Alabama, who specializes in Atlantic City travel and has referred six clients there so far in 2018.

“They have Steel Pier [theme park], but I have found they aren’t consistent with their hours, and several of my clients have complained that this is really the only activity for kids. They need to develop other activities that everyone can enjoy.”

The other challenge looming large for Atlantic City: Reversing its reputation for being an expensive destination that many say is not worth the money at a time when competition is fiercer than ever. It can only hope that brands like Hard Rock—as well as the new Ocean Resort Casino, opening in Atlantic City coincidentally on the same day—can help solve some of its image issues and turn its luck around.