Harrah's adding tower
By WILLIAM H. SOKOLIC
Harrah's Entertainment opened the House of Blues this year at Showboat. Next year, the Pier at Caesars comes aboard. On Thursday, the Las Vegas-based corporation announced an expansion at Harrah's Atlantic City.
The company plans to build a 964-room hotel tower, along with a 172,000-square-foot dining, retail and entertainment complex located in several stories between the new hotel rooms and an adjacent tower.
The retail and entertainment center, opening at the end of next year, will feature:
an Elizabeth Arden Red Door Spa with 22 treatment rooms;
an ultra-lounge nightclub;
an indoor pool and entertainment complex;
new retail shops;
a 650-seat buffet;
a 500-seat coffee shop;
The existing Fantasea Reef buffet will be converted into additional gaming space, adding 400 slot machines and 20 table games.
"This buffet will be even better," said Carlos Tolosa, Harrah's Eastern Division president. Although no deals have been set, the retail stores will feature recognizable names, Tolosa said. "We realize the Marina area is becoming more and more of a destination, and with next year's expansion at the Borgata, it would benefit both of us to have more lounges, restaurants and retail," he said.
The hotel tower will be completed by mid-2008.
"The new tower will allow us to capture more of the tremendous unmet demand for Atlantic City hotel rooms," Tolosa said. "There are few markets that have historically been as attractive, stable and business-friendly as New Jersey and we're pleased to make this sizable investment in the future of Atlantic City."
The decision shows tremendous confidence in Atlantic City, said Roger Gros, editor of Global Gaming Business magazine. "It won't necessarily be the last expansion for the company. Positive revenue figures the city is posting are proof."
Gros said Harrah's executives in the past scoffed at the importance of retail and dining attractions. But the success of Borgata and Tropicana changed the thinking, he said.
The need to add more nongaming amenities was driven home with the release Thursday of the third quarter earnings report by the Casino Control Commission.
Although Harrah's reported a 6.8 percent increase in gross operating profits, the casino hotel lags behind the city average in the percentage of revenue gleaned from outside the gaming hall.
The dozen casinos reported 21.7 percent of total revenues came from nongaming sources. For Harrah's, it was just 20.6 percent.
By contrast, nongaming revenues at the Borgata, which raked in more money in the casino than any other property in the third quarter, was 27.4 percent of the total.
Nongaming revenues at The Tropicana, home to the largest hotel in the state and The Quarter dining and retail attraction, accounted for 26.9 percent of the total.
The Borgata led the industry with gross operating profits of $76.2 million, an increase of 16.9 percent over the same period a year ago.
Tropicana reported a 64.6 percent increase.
Reach William H. Sokolic at (609) 823-9159 or firstname.lastname@example.org
Published: November 18. 2005 3:00AM