It’s funny how history repeats itself.
Thirty years ago, hotel group Ramada purchases the run-down Ambassador Hotel and called it The Phoenix. After a court battle, The Phoenix rose from the proverbial ashes and became the Tropicana. Between then and now, the Tropicana in New Jersey has overcome a near-death experience to become the second-best revenue earner in Atlantic City.
In 2009, the New Jersey Casino Control Commission stripped the casino’s owners of their license in the wake of massive employee layoffs that resulted in a filthy casino — insects infested the place, grime abounded, and all seemed lost.
New ownership and big investments turned the casino around, yanking it from the city’s revenue cellar and putting it near the top in fewer than 10 years.
“It’s an incredible difference and transformation,” Tropicana Entertainment President Tony Rodio told the Associated Press this past week. “Employee morale was at an all-time low. Customers were not happy with the facility and how it was being managed and were leaving in droves, and revenues were declining on a monthly basis. Fast-forward 10 years to where we are today, I couldn’t be prouder of what we’ve been able to accomplish over that time.”
A look at the numbers: Trop clears second by $27 million
The 2017 revenue numbers from the New Jersey Division of Gaming Enforcement were the capstone of the Trop’s comeback.
The NJDGE’s report showed that Tropicana NJ’s 2017 revenue of $390 million, while far behind Borgata’s $800-million year, was $27 million ahead of third-place Harrah’s.
The surge to the second spot was due to the casino’s significant 14.6 percent increase over 2016. Harrah’s saw a 1.6 percent growth, and fourth-place casino Caesars experienced a 14.4 percent gain over 2016.
Renovations catalyst for increased revenue at Tropicana NJ
Why so much growth in 2017? The answer to that question lies with a pair of renovation projects completed in 2015 and 2016. The first renovation cost $50 million, and the second one’s price tag was $40 million.
With $90 million on the line, Tropicana NJ was certainly hoping to surge ahead of Harrah’s and the Golden Nugget to snag the second-best revenue performance in 2017.
Steve Callendar, the property’s general manager, uttered these prophetic words in a 2016 press release announcing the completion of the second round of casino and hotel updates:
“Tropicana continues to evolve as a result of our constant investment into the property. Each round of improvements proves to be more rewarding than the last, as our guests are consistently pleased and revenues are rising.”
2018 will put gains to the test
While the 2017 revenue numbers were good news for Tropicana NJ’s owners, 2018 could be an entirely different beast for the thriving property.
The Hard Rock Atlantic City and Ocean Resort Casino are scheduled to open this summer and, when they do, there will no doubt be fierce competition for gamblers streaming into the city.
The University of Las Vegas Nevada’s Dr. David Schwartz, head of the school’s Center for Gambling Research, said it’s going to be hard to predict exactly what will happen with revenues.
The city’s seven casinos have found a solid equilibrium. So the presence of two new casinos (and the possibility of a third new casino) could throw that into chaos, leaving some with a much smaller slice of the revenue pie.