ATLANTIC CITY — Some of Atlantic City’s 17,000 casino-hotel rooms can be had for as little as $19 per night in the waning weeks of winter and in early spring.
These cut-rate prices may be good for bargain-hunting customers, but critics say they come with a cost. They believe Atlantic City’s image has been cheapened to the point that it will be viewed as the “Walmart” of tourist destinations.
Curtis Bashaw, the owner of the Chelsea, an upscale noncasino hotel on the Boardwalk, argued that casinos should instead be aiming for the higher end of the market. Unable to compete with the casinos’ heavily discounted hotel rates, Bashaw has closed down the Chelsea this winter during midweek, opening only on weekends.
“It continues to be a very troubling strategy that is leading to the least common denominator and reinforcing the reputation of Atlantic City as a second-rate resort,” Bashaw said. “Any place that offers rooms for $19 can’t be viewed as an up-and-coming destination. We want to be an aspirational destination. We don’t want to be a destination of last resort.”
Casinos have been slashing rates during the slow midweek period simply to get heads in beds during the winter doldrums. It is easy to find early-week or midweek rates in the $30s and $40s. Prices go up during the weekends, traditionally the busiest time for casinos. Gaming executives make no apologies for their discounted rooms.
“The dynamic pricing of our hotel rooms and hotel packages provides customers an opportunity to select what is most important and of value to them,” said Don Marrandino, president of the Bally’s, Caesars, Harrah’s Resort and Showboat casinos owned by Caesars Entertainment Corp.
The Atlantic Club, formerly known as the Atlantic City Hilton Casino Resort, seems to have found the bottom of the market by dangling rooms for as little as $19 per night during a special promotion that runs through April 5. Customers must pay in cash to get the ultra-low rate, offered Sundays through Thursdays.
Atlantic Club’s room rates reflect the casino’s rebranding as a value-oriented property catering largely to a local customer base. The casino is also slashing restaurant prices, adding new penny slot machines and offering low-stakes wagering at its table games.
“If we’re going to be a value-oriented property, we’ve got to do it,” said Michael Frawley, Atlantic Club’s chief operating officer. “If we’re going to talk the talk, then we’ve got to walk the walk.”
Bashaw likened the cut-rate hotel prices to fashion designer Gloria Vanderbilt’s clothing line starting as a premier brand, but ultimately ending up at Walmart.
“If we want to be the Walmart of gaming destinations, then maybe this pricing strategy makes sense,” he said. “As a whole, the town leaves money on the table by lowering rates to such a pathetic level.”
Similar to Bashaw’s comments, Hugh Chandler, general manager of Courtyard by Marriott, accused the casinos of tarnishing the tourist market.
“Sometimes, when you go too low in rates, you get beat up a bit,” Chandler said. “It’s doing a disservice. It just devalues an amazing city and destination.”
Deneen White, Marriott’s director of sales and marketing, said the noncasino hotel has held on to business travelers loyal to the Marriott brand, but has lost leisure customers attracted by the discounted casino rates.
“Is it disconcerting to see those rates every day? Absolutely,” White said.
Wayne Schaffel, a public relations consultant and former Atlantic City gaming executive, drew parallels between price cutting in Laughlin, Nev., and Atlantic City. He said as room rates plunged in Laughlin, the casinos there were also forced to cut the prices in their restaurants and other outlets. Schaffel predicted Atlantic City will be trapped in “a vicious circle” if room rates continue to go down.
“As the prices decline, management will do everything possible to cut costs,” he said. “This will result in rooms that never get remodeled. Conditions will deteriorate,and this will cause some of the better clientele to stay away even more than they do.”
However, the newest attraction in the casino market is already setting a higher standard for hotel rates, at least in the short term. Revel, the $2.4 billion gaming resort opening April 2, is offering rates from $239 for a standard room to $839 for a two-story loft suite on its first night, a Monday
In comparison, a price check on hotels.com reveals rates at some of the other casino hotels for April 2 in the $40s and $50s, including $47 at Resorts Casino Hotel and $42 at both the Golden Nugget Atlantic City and Harrah’s Resort. Even budget motel or hotel chains such as Super 8 and Days Inn are charging higher rates than casinos for the same night.
The pricing strategy is based on the hope that casinos will be able to recoup their hotel losses when customers spend money in different parts of the property — on the gaming floor or in the restaurants, bars, nightclubs, spas and retail shops.
“Midweek occupancy is a bit of a challenge, so you make money in other ways, on the gaming floor and in food and beverage,” Frawley said. “It’s obviously a bit of a gamble, but our data says it will be worth the risk.”
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