Atlantic City's $2.4 billion Revel Casino Hotel has announced their doors will be closing Tuesday morning only two years after opening with high hopes of revitalizing Atlantic City's struggling gambling market, according to The Associated Press.
Analysts and competitors say Revel's downfall was hampered by bad business decisions and a fundamental misunderstanding of the Atlantic City casino customer, the AP reported.
"The timing of it could not have been worse," said Mark Juliano, president of Sands Bethlehem in Pennsylvania and the former CEO of Trump Entertainment Resorts in Atlantic City, according to the AP. "The financial climate while Revel was developing and when it opened were completely different."
The casino broke ground just before the Great Recession and ran out of money halfway through construction and had to drop its plans for a second hotel tower while scrambling for the remaining $1 billion or so it needed to finish the project, the AP reported. When it opened in April 2012, it was so laden with debt that it couldn't bring in enough revenue to cover it.
It also started at a huge disadvantage by not having a pre-existing database of gamblers to solicit, in the way that casinos owned by nationwide companies like Caesars Entertainment or Tropicana Entertainment can, according to the AP.
Customers found Revel's design off-putting as well, said Joe Lupo, senior vice president of the Borgata, whose upscale market Revel appeared to target, the AP reported.
"Revel struggled with the execution of plans to develop their market, as well as with their design and just a basic understanding of the Atlantic City visitor," Lupo said, according to the AP.
Entering from the Boardwalk, they had to take a vertiginous escalator up four flights to reach the casino floor, according to the AP. Once there, the property wound around a circular pattern instead of the linear layout of most other casinos.
The casino's huge power intake proved risky for some potential buyers in bankruptcy court who reportedly were scared off by the ongoing expense of the heating, cooling and electrical plant, and they sought unsuccessfully to exclude it from their purchase offers, the AP reported.
