ATLANTIC CITY — After years of operation, Providence at Tropicana Atlantic City and Dusk at Caesars Atlantic City joined the growing list of nightclubs that have gone silent over the last couple of years.
The recent closings of the two clubs come as food and beverage sales, a traditional indicator of how well the resort’s nongaming attractions are performing, fell for the fifth straight quarter.
The drop raises questions about the future of the club scene in the resort.
Over the last couple years, the city also has seen HQ go dark following the closing of Revel. WAV at Playground Pier closed shortly after its highly publicized opening last year.
But the closing of the clubs is not necessarily an ominous sign for the resort, said Robert Ambrose, a gaming industry consultant. During the first half of 2017, food and beverage sales at the resort’s seven remaining casinos were down nearly 5 percent over the same period last year.
“In many ways, today’s nightclub is defined by the niche market it promotes to,” Ambrose said. “Today, when the experience is ‘hot’ and trendy, there is success promoted by social media. When that falls off, it is time to change the customer experience or close.”
The closing of nightclubs is not just an issue in Atlantic City. Around the country, about 6,500 clubs have either closed or cut back hours in their first year, according to the American Nightlife Association.
After eight years in operation, including an expansion three years ago, Dusk nightclub at Caesars Atlantic City closed last week. No reason was given.
Providence nightclub at Tropicana Atlantic City closed Labor Day weekend. Bob Pereira, founder of Providence operator Metronome Hospitality Group, said the company is looking for another location in the city. Tropicana general manager Steve Callender said the casino plans to open a new nightclub in the space.
“Typically in the hospitality industry, owners and operators tend to refresh and renovate their product offerings periodically,” said Rummy Pandit, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism at Stockton University. “I believe that’s probably the driver behind the closings, and we will see enhanced product offerings in the future.”
While some clubs are closing, others such as Premier Nightclub at Borgata Hotel Casino & Spa are a big part of what the resort has to offer, said Liza Costandino, director of communications at Borgata. In 2016, Borgata invested more than $14 million into opening Premier.
“As the market has changed and advanced, we have worked to evolve our offerings to speak to an ever-changing customer base,” Costandino said. “This philosophy was top-of-mind when we launched Premier Nightclub in 2016, presenting a transformative party experience where clubbing is theater. Premier is uniquely positioned as both a destination in which to plan your night around as well as an amenity to experience while enjoying everything Borgata has to offer — including Borgata’s entertainment, dining and spa options.”
Casino properties have started to rely less on the nightclubs to generate revenue over the last decade, Ambrose said.
“Years ago, most properties had one venue that served as house bar, lounge or night club. Customers were there because they had no other choice on property,” Ambrose said. “Today, properties host sports bars with upscale food and beverage, celebrity-named bars, beer gardens or wine experiences all impacting the foot traffic of the nightclub. This isn’t a bad thing. The money still stays on property.”
Panditt said he doesn’t think the continued drop in food and beverage revenues is a concern for the resort.
“(A) millennial is generally looking for an experience that would encompass food and beverage venues including nightclubs, so I don’t believe the closings are related to that market segment,” Pandit said. “I would attribute the majority of the drop in food and beverage revenue primarily due to the closing of a combined 31 food and beverage and retail outlets at the Taj.”