Harrah’s Atlantic City is Remodeling the Harbor Hotel Tower and Rebranding it the Coastal Tower

Caesars Entertainment (CZR) continues to reinvest in its Harrah’s Resort in Atlantic City. After a remodel of the Pool, completion of its new convention center, drawing Gordon Ramsey Steak to replace its aging steakhouse and revamping its coffee shop, Harrah’s is in the midst of a total remodel of its Harbor Tower.

The Harbor Tower was one of the first hotel towers at Harrah’s and was in bad need of a remodel. All hotel rooms in the tower will be remodeled. Harrah’s brought in MPM Studios to help with the design.

After the remodel is complete, the hotel tower will be rebranded the Coastal Tower. The newly redesigned tower will boast 507 hotel rooms with approximately 450 square feet of living space each and a focus on technology. Rooms will be equipped with both WiFi as well as hard-wired internet, something that business travelers crave, as well as 55-inch TVs.

This is a much needed upgrade. The old Harbor Tower was definitely showing its age.

With new competition in the Atlantic City market, the legacy casinos definitely need to make changes to keep up with the hip Hard Rock and the modern Ocean Resort. Based on revenue statistics released earlier this month, these two newcomers in AC, especially Hard Rock, are eating in to the legacy casinos’ market share.

The remodel of the Harbor Tower follows the 2017 revamp of Harrah’s Bayview tower. In that project, Harrah’s redecorated 444 hotel rooms.


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Caesars Entertainment has been spending heavily on renovating its hotel rooms, especially in Las Vegas. Here’s an overview of the hotel room remodel projects that Caesars completed since 2015:

In addition to these completed hotel remodel projects and the ongoing remodel of the Harbor Tower at Harrah’s Atlantic City, CZR is planning several additional hotel room renovations:

  • Paris Las Vegas – remodel of 1,596 rooms starting in 2018
  • Harrah’s Las Vegas – remodel of 918 rooms in the Mardi Gras Tower, beginning in 2019
  • Flamingo Las Vegas – remodel of an addition 1.075 hotel rooms, with no determined start date yet
  • Caesars Palace Las Vegas – remodel of 453 hotel rooms in the Forum Tower, with no determined start date yet

With all of this capital expenditure on hotel rooms, CZR is making a serious investment to remain a leader in the gaming market. This is needed since the competition, both in destination areas such as Las Vegas as well as local markets, is only getting stronger.

Atlantic City Total Casino Winnings Flat But Most Casinos Continue to Benefit From Taj Closing

The June 2017 casino revenue reports show that total casino winnings in Atlantic City were virtually flat in June 2017 versus a year ago. In June, the seven operating casinos pulled in winnings of $197,488,784. This is a -0.003% decrease from June 2016 when AC casinos pulled in $197,493,766.

While the flat casino winnings may be disappointing, most casinos saw significant year-over-year increases as a result of the closing of the Taj Mahal. The June 2016 winnings include winnings at the Taj, and most casinos benefited by that casinos closing.



The Tropicana produced the largest total winnings growth rate at 20.4%, followed by the Golden Nugget with a 14.7% year-over-year growth rate. The only casino to post a negative growth rate in June was Caesars. Caesars total winning dropped 1.9% from a year ago.

The table below outlines the year-over-year growth rates of total winnings of the seven current AC casinos.

 

As you can see, it has been a pretty good year so far for the remaining Atlantic City casinos.  All of the casinos have been benefiting from the closing of the Taj and other casinos.  The notable winner is the Trop which has seen double digit growth rates in its casino winnings.  While the individual casinos are posting gains pretty consistently every month, the casino winnings for the entire AC casino market has been a mixed bag.  As you can see in the table above, since January, the total AC winnings growth rate has been positive 3 months (January, March and May), negative 2 months (February and April) and flat one month (June).

While the Tropicana can boast that it had the largest winnings growth rate, the Borgata still remains the most profitable Atlantic City casino based on total casino winnings.  In June 2017 the Borgata won $59,835,792 in its casino.  The next closest casino was Harrah’s which won $31,647,463.  Here is the full list of casino total winnings for June 2017:



Borgata: $59,835,792

Harrah’s: $31,647,463

Tropicana: $28,459,162

Caesars: $24,688,410

Bally’s: $18,156,634

Golden Nugget: $18,017,766

Resorts: $16,683,557

ALL CASINOS: $197,488,784

With the peak summer season upon use, it will be interesting to see if Atlantic City casinos can ramp up their casino winnings and build momentum before new pressures arise from the pending opening of the Hard Rock and possible reopening of the Revel.

Atlantic City Slot Wins Flat in June But Taj Closing Boosts All Casinos

The New Jersey Division of Gaming Enforcement released the June 2017 casino revenue reports and the results regarding slot machine wins is positive for all Atlantic City casinos.

Year Over Year Slot Win Growth

While the total slot wins in June were amazingly close to flat versus June 2016 for all Atlantic City casinos (142,968,402 for June 2017 vs 142,948,427 for June 2016), all casinos posted positive year over year slot win growth rates.  How can this be?  The simple answer is that in June 2016 Trump Taj Mahal was still in business.  Effectively, the remaining seven AC casinos split the Taj’s approximately $12 million monthly slot win.

The clear winner of the Taj shutdown is the Tropicana, based on slot wins.  The Trop’s year over year slot win increased a remarkable 21.2%.  The next biggest slot win growth rates belong to the Golden Nugget at 14.7% and Resorts at 10.4%.  While all casinos posted positive year over year slot win growth rates, Borgata was in last place at 4.8%.  A case can be made that Borgata, arguably the highest-end casino in Atlantic City, benefited from the closing of the Taj the least.



The chart and table below show the year over year slot win growth rates for each of the last six months for all of the AC casinos still open, plus the total slot win growth rate for all casinos.

Year Over Year Slot Win Growth Rates for Atlantic City Casinos

As you can see, the total Atlantic City slot win growth rates have been a mixed bag since the beginning of 2017.  While the growth rates for slot wins increased during the first three months, the growth rate turned negative in April and May and was essentially flat in June.

Absolute Slot Wins

While the Tropicana had the largest year over year percentage growth rate for slot wins, Borgata continues to have the largest absolute dollar for slot wins.  In June 2017 Borgata had slot wins of over $41.0 million.  Its next closest AC rival was the Trop at $23.9million, followed closely by Harrah’s at nearly $22.0 million.  The table below shows the total slot win for each of the last twelve months for the AC casinos currently in business.

 



What will the reopening of the Taj as a Hard Rock property and the (hopeful) reopening of the Revel/Ten do to the slot business of the existing casinos?  Only time will tell.  Stay tuned!