This summer, the Tropicana in Atlantic City completed a $40 million renovation project that included updated hotel rooms, another property entrance, a high-limit slots area and a number of added new features, from a luxury hair salon to a premier nightclub.
The upgrades came a year or so after the resort completed a $50 million renovation that featured a modernization of the casino floor, more hotel room updates, a new fitness center and the creation of a multimedia light and sound show on its boardwalk façade.
Who says Atlantic City is crumbling?
At a time when five casinos have closed in less than three years, the Tropicana’s yearly investments back into its own property appear to be an anomaly.
Or a business success story — at least, that’s how Tropicana CEO and President Tony Rodio sees it.
“We are financially successful, strong and continuing to grow,” he said.
Indeed, the Tropicana, like other remaining properties in the city, has seen its market share grow with less saturation. But Rodio also attests the success of the resort to its commitment to business and the age-old adage about spending money to make money.
“We think it’s critical to make sure that we focus on all three elements,” Rodio said. “The employees, the customers and the building.”
Don’t be confused. Rodio is cognizant of the world around him.
Just south of the building is the former Atlantic Club, closed since January 2014. A few blocks north is the former Trump Plaza, visibly in a state of disrepair since it closed in September 2014.
As light and bright as the Tropicana’s new boardwalk shows may be, Rodio knows the city’s challenges are an obstacle.
“It really is difficult, firstly because you have to overcome a negative perception that the general public has about Atlantic City,” he said. “They hear about the city’s financial issues and the potential for the city to go into bankruptcy, or the potential for the state to take over the city. They see all these closures, and then there’s parts of the city that are rundown and blighted.
“But we’re an oasis in the middle of all of that.”
Out on the casino floor, Tropicana General Manager Steve Callender says the changes have boosted morale and reinvigorated employees.
“We have 30-year employees that have been become engaged by what we’ve been doing, “ he said. “They’ve got a new energy about them when we started to redo this casino floor, and they really appreciate it. They get to work more hours; their tips go up. The customers are loving it; they’re engaged with it, as well.”
The success hasn’t exactly come from a secret sauce, either.
Back in 2013, Resorts cut the ribbon on its $35 million Margaritaville-themed expansion and renovation project. In August, figures from the state Division of Gaming Enforcement showed that Resorts saw its gross profits rise by 26 percent over the first half of this year, compared with last year.
That same report showed a 25 percent spike in gross profits for Tropicana over that time period.
“The people that are investing money in their property are seeing a return for it,” Callender added. “Now that we have the right amount of casinos, you can feel comfortable about investing in your property … especially if you do it right.”
Rodio said it’s not just how Tropicana is spending its reinvestment dollars but, rather, what it’s investing in.
Diversification, he said, is key. With a number of changing market elements, the city’s casinos need to continue to offer a wide range of activities that might not center around or have anything to do with traditional gaming.
While that’s certainly a buzzword these days in Atlantic City, Tropicana has long kept that in mind with its boasting of its IMAX theater and array of nightlife and dining options in the “Quarter” section of its resort. But the recent renovations have doubled down on those amenities, with the additions of Ivan Kane’s Kiss Kiss A Go-Go nightclub and a number of eateries, including new restaurants expected early next year from popular Philadelphia-area Iron Chef Jose Garces.
It is part of a larger strategy to attract millennials, who Rodio said are often “focused more on non-gaming attractions that get them to the property.”
“I think it’s even more important as we look to the future,” Rodio said. “You read so much about the millennials and they’re going to be the economic engine that’s driving the economy in the next 10 to 15 years as they gradually become more and more of an economic force.”
Regardless of the confidence Tropicana is currently exuding, there is still a lot of uncertainty across the city.
First, there’s the Trump Taj Mahal, managed by Tropicana Entertainment and owned by Icahn Enterprises, which closed its doors earlier this month amid poor performance and a labor dispute with the local casino workers’ union.
Rodio has largely been in the news lately responding to what will happen at the Taj, but that property’s future is still very much up in the air, with rumors of all sorts continuing to percolate.
That’s also being fueled by an ongoing effort in the state Legislature to effectively block the Taj from holding onto its gaming license. That situation is uncertain.
There’s also the upcoming northern New Jersey casino expansion referendum that voters will consider Nov. 8. While recent polls show that the ballot question might lack the support it needs to pass, nothing is, of course, for certain.
Atlantic City’s gaming market is still eagerly awaiting its fate.
Rodio says that, ultimately, if there aren’t new casinos coming soon to northern New Jersey, he expects to see “some additional properties coming online or reopening” in the next couple of years in Atlantic City as market confidence builds.
Even if it fails, Rodio said he expects legislators to try again. That’s why he’s hoping for a grand defeat.
“I’m hoping that it fails by a pretty wide margin to send a message to Trenton,” he said.
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