Atlantic City hotels hurt by major conference cancellations after storm

Though Hurricane Sandy left Atlantic City intact, the blow from two major state associations calling off their annual conferences at the Atlantic City Convention Center is having a more devastating impact on the hotel properties, a tourism industry expert said.On Nov. 5, the New Jersey League of Municipalities canceled what would have been its 97th annual conference Nov. 12 to Nov. 15 at the convention center, citing concerns about the approaching nor’easter this week and the need for local officials to stay in their communities to continue restoration efforts in response to the hurricane.
The League’s announcement followed the New Jersey Education Association’s Nov. 1 decision to cancel for the first time in its 158-year history its yearly conference at the convention center, which had been scheduled for Nov. 8 and Nov. 9.
According to the Atlantic City Convention and Visitors Authority’s website, both events combined were set to draw nearly 70,000 attendees to Atlantic City. Instead, their cancellations have left the tourist district’s casinos and hotels with blocks of empty rooms and very little time to fill them.
“These properties count on this business to fill an otherwise slower period here in Atlantic City,” said Brian Tyrrell, a senior research fellow with the Levinson Institute for Gaming, Hospitality and Tourism at Stockton College. “With business travel still on a decline — as meetings formerly held in conference rooms at the properties are replaced by teleconferences — the one sector that has remained growing is the association convention sector. It’s a very important piece of business to Atlantic City, so these cancellations are unfortunate.”
ACCVA President Jeffrey Vasser said he’s hoping to reschedule this year’s conferences to help lessen the impact of the cancellations on the local economy, which he said includes more than 12,000 lost room nights.
“We’re hoping to provide a good economic impact at another time, but that doesn’t help the hotels now, because they were counting on 10,000 room nights next week from the League, and now it’s nearly impossible to find people to book that many rooms on short notice,” Vasser said. “Attendees were widely scattered in rooms across all of the properties, so everyone’s feeling the impact from this — from Borgata to Revel to Sheraton.”
Tyrrell said the convention cancellations’ impact on the hotel properties will be similar to the drop in business they experienced when Hurricane Irene tore up the state’s shoreline, since “we saw double-digit increases for August 2012 compared to August 2011 across many metrics that track the properties’ performance, and a major reason why they did so much better in August 2012 was because of all the event and room cancellations from Irene” in 2011.
“When you look at the seasonality of the shore communities, there’s a huge spike in the middle of the summer and then it quickly drops off in the shoulder season. But historically, Atlantic City by virtue of its conventions was able to flatten out a little bit in the off months,” Tyrrell said. “Bringing in an association like the League of Municipalities in the middle of November is really important to any city, but particularly to a city by the shore like Atlantic City. Rooms are already challenging to fill this time of year, so the impact of these cancellations will be very significant.”