by Steve Norton
CEO, Norton Management

Atlantic City continues to recover from 'lost decade' | Top Stories | pressofatlanticcity.com

I admire the Atlantic City Government for trying to attract new types of commercial activity; which should be helped by the decline in land prices. In fact is may be possible to build affordable housing, that does not require a subsidy. But as for the resort/gaming attractions of AC, we have two strikes against us.

First, as a beach resort, our length of season, was diminished, over 50 years ago; by the introduction of jet air travel and affordable air conditioning. And the tremendous decline in demand for our resort hotels, were the reason that casino gaming was approved 40 years ago; in hopes of creating a new reason to visit Atlantic City. And in 2006, we were still a near monopoly, for the customers we called our own, in Philadelphia, New York City and the State of New Jersey.

But the majority of that demand was in the summer and on weekends, where the 4 to 5 hour roundtrip travel time, was not such a deterrent. And for the 200 nights a year, midweek, in the Fall, Winter and Spring; we developed line run busses. They were started by me, in November 1978, while Resorts International was still a monopoly. But they were only allowed mid-week days, and there was no subsidy or free coin or meals involved. Well by the time Caesars and Bally had opened, line runs were operating 7 days and nights a week, but the emphasis still was on mid-week. At one time in the late 1980's and 90's, the line run customers surpassed 14 million annually, or 40% of our total visitors. Now 90% of those AC players are going to Parx, and Sands Bethlehem, in PA, or Aqueduct and Yonkers in New York, And AC's best solution, off season conventions and trade shows; are difficult to attract; because the favorite mode of travel, by commercial airline, is not available to AC International. Of course, we do have air service at Pomona, but it primarily takes our South Jersey residents to Florida. and a return trip home.

The hospitality industry of South Jersey, needs to work with the AC casinos, and find a way to introduce air service from several hub airports, like Atlanta's Hartsfield; the World's busiest. Hartsfield has service to most of the Islands, with casino gaming; also provides service to South Florida, Biloxi and has 93 flights a day to Las Vegas. Atlanta would open our resorts and casinos to the entire South, including Houston and Dallas.

I know our operators prefer in house conventions; but AC also has a lot of non casino accommodations, and we also have an excellent attraction, for our affluent clientele, in our numerous, quality golf courses. They are very different than the ocean and beach, because they are available year round.

Air service is a necessary ingredient for the convention/ trade show market; and if we look at the latest Las Vegas Strip financial data available, it will show the 23 larger properties had occupancies of 92.1% and an average room rate of $163. And the room departments made more money than their casinos; and food/bev. and the convention departments were also profitable; unlike the old days, where all earnings came from the casino. AC casinos need to transition in that direction, and profit more from room sales, at higher occupancies and rates. And the only way to do that is to find rack rate business on those 200 mid-week nights in the Fall, Winter and Spring. .