It symbolically started with the shuttering of the Atlantic Club in January 2014, but the actual decline of Atlantic City's casino industry began years earlier, as the regional market became increasingly saturated with new casino properties in nearby Connecticut and Pennsylvania.
Atlantic City, long a golden goose for the state of New Jersey, would go on to lose three more casinos that year, saying goodbye to Showboat, Trump Plaza and Revel, the $2.4 billion waterfront property that never turned a profit over its short two-year lifespan.
Since then, Wall Street credit rating agencies have speculated about more closings in the future for the city’s eight remaining properties. Despite the shrinkage of the local market, many analysts still express concern over the viability of a healthy industry in Atlantic City, with yet another casino opening in Philadelphia in the next few years and the possible threat of a gaming expansion to northern New Jersey waiting in the wings.
And then there’s this whole issue about the municipal government and being broke. Maybe you’ve heard about it.
But these are Atlantic City’s problems, already well-documented and ever-present.
Cem Erenler, general manager of The Claridge Hotel, wants to focus on the city’s future instead.
“I have no doubt that, within the next eight to 10 years, Atlantic City is going to be again one of the most curiosity-creating cities,” said Erenler, who’s also the vice president of hotel operations and business development for TJM Properties, the Florida-based company that owns both The Claridge and the now-former Atlantic Club. “I have no doubt about that, and we’re not going to wait for eight to 10 years. It’s already gradually getting there.”
And that’s not just posturing from Erenler. He truly believes there’s a life after gaming for properties in Atlantic City.
Or, at least, he should. The Claridge, a historic former casino, was repurposed as a stand-alone, non-gaming hotel by TJM after it purchased the property from Caesars Entertainment in 2014. Since then, Erenler noted, TJM has invested a lot into the property, including the addition of 15,000 square feet of new conference space.
Conferences, weddings and just pure oceanfront tourism: The way Erenler sees it, they’re all just a part of Atlantic City’s new business model.
TJM is not alone in being intrigued, either. Philadelphia developer Bart Blatstein has also bet big on the city despite its woes, recently acquiring the former Showboat property with the intention of reopening it as a non-gaming hotel.
Then there’s Revel, purchased in 2014 by Florida developer Glenn Straub, who has proposed one lofty idea after another for how the property should be repurposed.
Erenler said the gamble on non-gaming hotel properties is already starting to pay off. Last year, The Claridge posted a 38 percent occupancy rate, up from 33 percent the year before.
“In the next three years, that will be going up and getting closer to 65 percent,” Erenler said. “That is my forecast.”
The good news for The Claridge and any other hotel newcomers is that there is plenty of business to go around.
According to data cited in a report put out by Stockton University’s Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism, Atlantic City lost well over 4,300 rooms in 2014 following the casino closures.
Erenler says the possible future reopening of Showboat, Revel and other former casinos as hotel-only properties is a positive for The Claridge and the city’s hotel industry, not a cannibalization of an already-shrunken market.
“It is very good,” Erenler said. “It can only bring attention.”
Mayor Don Guardian has also said the increased occupation of hotel rooms is happening, and with the numerous summer events lined up, there is a need for even more rooms.
Between the six beach concerts and an air show, “We are still sold out on weekends, and will be until the end of September,” he said.
Joe Kelly, president of the Greater Atlantic City Chamber, views the hotel industry as just part of a larger story in the years that have followed the casino closings. Atlantic City, as Kelly points out, might be now hitting its stride.
“I think we have stabilized,” Kelly said. “If you look at all the numbers, you see that gaming year over year is up, dining and entertainment and retail is up. Visitor numbers are consistent.”
And that pattern still allows room for growth, Kelly said.
“We’ve right-sized the market, and now we’re seeing if there’s a bit more to be had,” Kelly said. “We think there is.”
Kelly, like Erenler, stressed the role that conventions play any hotel industry’s success, because they present a “12-month activity” that offers “mid-week business.”
What’s even better, Kelly said, is that the hotel-only properties add to the “diversification” of the city’s offerings, just like state and local officials have talked about for years. They help move Atlantic City toward being a city that offers gaming, rather than a gaming city that might have a few other things, too.
“The diversity is the appeal,” Kelly said. “We think we have some pretty creative folks taking on these properties.”
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