CITY, New Jersey -- Atlantic City has taken a page
from the Las Vegas playbook.
last week's soft opening of The Pier at Caesars, a $200
million high-end retail-and-dining venue adjacent to Caesars
Atlantic City, the southern New Jersey destination continues
to morph into more than just a day-trip, gambling-intensive
for its traditional visitors, which numbered almost 35
million in 2005, is expected to intensify in the coming
years as neighboring New York and Pennsylvania make plans
to open large slot-machine casinos.
of necessity, Atlantic City's casinos have been forced
to invest financially in their plants beyond the gaming
floors to give customers more than just gambling.
really comes down to Atlantic City needing to reinvent
itself," Deutsche Bank gaming analyst Bill Lerner
seaside gaming community dominated by Atlantic City's
famous Boardwalk needs to give its customers other reasons
to visit, he said.
typical Atlantic City casino customer, a high-frequency
and convenience-oriented gambler, is going to find the
same slot machines in closer proximity to their homes.
That's going to become a real issue for Atlantic City,"
Lerner said. "The time is now to make that significant
capital investment into their properties to build out
those nongaming amenities."
Atlantic City, owned by Las Vegas-based Harrah's Entertainment,
is participating in that transformation. The first retailers
at The Pier at Caesars opened Tuesday. By December, it's
expected to have 90 stores and 10 restaurants.
Pier joins The Quarter at the Tropicana Atlantic City,
which was the centerpiece of a $225 million expansion
of the resort in 2004, and offers retail and dining options
to Atlantic City visitors. The old Havana-themed Quarter,
with 200,000 square feet, has 30 retail shops and more
than 20 restaurants.
Simpson, senior vice president of development and finance
for Tropicana parent Aztar Corp., said The Quarter is
responsible for the casino's jump in customer traffic
and gaming revenue. In 2005, the Tropicana Atlantic City
reported revenues of $490.1 million, compared with $384.6
million in 2004.
when you look at our numbers, the casino counts have risen
dramatically," Simpson said. "More people are
coming to the Tropicana because of The Quarter and those
people are new to Atlantic City."
said The Quarter's upscale and trendy restaurants, such
as Red Square, P.F. Chang's and The Palm, are attracting
a younger and more affluent Atlantic City visitor.
seen it both visually and statistically. Our database
has gotten younger because of The Quarter," Simpson
said he didn't think the Pier's opening would affect the
Tropicana. Although The Quarter is dominated by restaurants
and entertainment venues, The Pier will bring high-end
shopping to the Boardwalk.
some of the Pier's stores are standard on any mall directories,
Victoria's Secret, Gymboree and the Apple Store, others
are high-end, such as Tiffany & Co. and a Wolfgang
entire level is dedicated to couture, where the floors
are blue terrazzo marble and where Burberry clothes, Tiffany
jewelry and Tourneau watches can be purchased.
said The Pier's retail is more upscale, while The Quarter's
retail is for the "mass market." He said the
offerings will easily be absorbed into the market.
want more than just gaming, and Atlantic City is definitely
underserved," Simpson said. "There is clearly
room for more restaurants and more amenities. I don't
think there will be much of an overlap."
gleaming, 900-foot Pier is in stark contrast to the nearby
Boardwalk, where shopping is at stores that advertise
"Everything's 99 cents" and where seagulls circle
waiting for people munching pizza slices to drop a crust
developer of The Pier, Sheldon Gordon, built The Forum
Shops at Caesars 14 years ago. The Strip shopping and
entertainment complex is viewed as the catalyst in the
city's transformation from a gambling mecca to a place
to have fun and spend money without gambling.
the Forum Shops, new resorts were built with major retail
areas, the Grand Canal Shoppes at The Venetian and Desert
Passage at the Aladdin.
and other nongaming amenities have shifted Las Vegas visitor
spending habits. In 2001, 50 percent of the casinos' revenues
came from retail, restaurants, hotel rooms and other nongambling
areas. In 2004, 51 percent of the revenues were nongaming.
said that in Atlantic City, 90 percent of a casino's revenues
come from gaming.
revenues are lacking, and it's a major opportunity for
the casinos," Lerner said. "But it's also going
to have a major cost attached to it."
Las Vegas, spending on retail has more than doubled in
the past 10 years. The average visitor spent $66.18 on
shopping in 1995; that figure grew to $136.60 in 2005.
said he thought The Pier at Atlantic City, which is connected
by a skyway over the Boardwalk to Caesars Atlantic City,
could have the same effect on the New Jersey Shore.
is going to change the whole attitude," he said.
City today has more going for it than Las Vegas did when
the Forum Shops opened, he said.
resort has been upscaling for three years, since the Borgata
opened in 2003. The property, a joint venure of Boyd Gaming
Corp. and MGM Mirage, not only had a casino and hotel
rooms, but a spa and restaurants run by out-of-town chefs
such as Philadelphia's Susanna Foo.
other casinos have themes such as the Wild West and ancient
Rome, the Borgata emanates luxury and hipness. Scantily
clad waitresses patrol the casino floor, the rooms have
showers built for two and tour buses are not courted for
their normally low-rent business.
the Borgata opened, there's been a building boom. Several
of the city's 12 casinos got upgrades and added restaurants
run by celebrity chefs.
Borgata opened a $200 million expansion Friday, featuring
restaurants by Wolfgang Puck, Bobby Flay and Michael Mina,
along with a second nightclub, an upscale food court and
an 85-table poker room.
spokesman Michael Facenda said the casino realized soon
after it opened that there was more demand for upscale
living in Atlantic City than it was providing. So, the
expansion started quickly.
Bank's Lerner said expanding in Atlantic City makes more
sense financially than investing in other jurisdictions,
where the gaming taxes are upward of 50 percent of gross
much more competitive and it's a better return on investment,"
said casinos also need invest in other nongaming amenities,
including additional hotel rooms that would help lure
midweek convention business.
City is not competing with Las Vegas," Lerner said.
"But it's following a Las Vegas model to compete
Associated Press contributed to this report.