Expanded thinkingCompetition pushes $20 million expansion and rehab for Isle of Capri Lake Charles
Staying competitive often means giving customers more than just the best slot machines and table games. This fact is not lost on Biloxi, Miss.-based Isle of Capri Casinos, which has launched a multi-million dollar refurbishment of its Lake Charles, La. riverboat casino operation to stay current in a rapidly expanding marketplace.
Lake Charles is one of four gaming regions approved by Louisiana's 1991 gaming law. When it comes to geography, Lake Charles is ideally located to draw out-of-state customers from nearby Houston. Isle of Capri saw the advantage of this arrangement early on, and opened two casinos, the Crown Riverboat and Grand Palais Riverboat, in Lake Charles by 1996.
Time has born-out Isle's faith in this market, which continues to be on of the few areas in Louisiana posts year-over-year casino revenue gains, according to the Louisiana Gaming Commission. This sustained casino success has attracted the rest of the gaming industry, however, and Lake Charles area is currently home to five gaming operations. Indeed, some companies still believe there is room for more gaming resorts in Lake Charles, including Pinnacle Entertainment, which is building a $325 million casino complex it hopes to open early next year.
Isle of Capri is not taking this continued encroachment into one of its core marketplaces lightly, and is protecting its investment by expanding the largest of its two Lake Charles properties, Grand Palais Riverboat Casino.
"At the moment, we have just completed work on our shore side facilities, which include a hotel and restaurants at the Pavilion. We've added a new buffet restaurant there, too," said Tom Carr, senior vice president of operations for Isle of Capri. "We are also enclosing the third deck of the Grand Palais Riverboat, called the 'Texas Deck,' and adding a new gaming area. We are also renovating the other two levels of the boat. They will get an Isle Style makeover with new carpeting, ceiling tile, wall coverings and lighting."
The new gaming area formerly served as a storage area, Carr said. The expansion is part of a $20 million dollar renovation and improvement project.
Calypso's Buffet received a facelift in another phase of the renovation. The restaurant was gutted and redesigned to include a pizza cooking station, as well as a rotisserie and carving station and gourmet coffee.
For the time being, Isle of Capri has no plans to expand its second boat, Crown Casino, Carr said.
"Together, both boats offer 85 table games, 1,880 slot machines and a poker room. They operate 24 hours a day.
"In our strategy, we have added gaming capacity, square footage to our casino and 400 additional slot machines with ticket-in/ticket-out capability. We had that capability in some of our existing slot machines, but are expanding them. It's something our customers want. The ticket-in/ticket-out systems, which are added to the existing capabilities of the machine, makes it easier for customers because they don't have to carry coins."
Market dynamicsSuch distinctions are important, since the Lake Charles-area customer has plenty of gaming options to choose from. In addition to Isle of Capri's two riverboat casinos, Harrah's currently operates two riverboats in the area-Players casino and Star Casino. In addition, Boyd Gaming re-opened Delta Downs as a racino in 2001.
"As the market has evolved, we have to keep pace with improvements and renovations, but we would have probably done it anyway," Carr said. "Periodically in this business, you have to refurbish things and the business would warrant new capacity."
The new expansion and rehab reinforces Isle's attractiveness to the growing Houston market, and better positions it for the opening of Pinnacle's casino next year.
Carr said that the strong regional gaming market for Lake Charles, which has done well even in this difficult economy, is the reason
for Pinnacle's decision to enter the market. Indeed, the Louisiana Gaming Commission reported that the state's 14 riverboats took in $125.4 million in December, well below the $133.7 million they generated the same month the year before. Despite the downturn, some Lake Charles casino still post year-to-year revenue growth, evidence of the area's potential as a standout gaming market.
"The economy has affected everyone and that market has been soft but we continue to believe that is a very healthy market to the long term. Obviously, Pinnacle sees this as a very strong market for many years to come. We share that belief," Carr said.
Catering to the customerIn addition to a program of periodic refurbishment, Carr said that Isle of Capri stays a step ahead of the competition by emphasizing customer care.
"All businesses have to meet customer expectations. You have to offer your customers more in a market that is becoming more competitive," he said.
"Our competitive focus is on taking very good care of the customers we have known for a long time and who continue to return to our gaming centers. People can find slot machines anywhere. We try to offer them a service experience that we feel differentiates us from other locations. We don't think you win on brick and mortar alone and you have to put emphasis on how well you know the customers who come there and how you provide for them."
Carr said Isle of Capri maintains extensive databases that allow them to immediately identify frequent players. "We know who they are and we dedicate a large portion of our services to cater to them whether it is at the hotel, our restaurants or the gaming tables and slot machines. People go where they are known and that is what we really do attempt to do."
He said it is one reason why many Isle of Capri and Lake Charles customers travel there rather than to Las Vegas, which invests heavily in national marketing.
"If you go to Vegas one or two times a year, you really won't be that well known. But, if you come to Lake Charles 30 times a year, as many customers do, the customers expect to be treated differently and we recognize that as a part of our attraction," Carr explained.
Amenity drivenPart of that treatment is to offer its customers a consistent upper-end casino resort experience. The Isle of Capri Hotel Tower offers 252 rooms that connect to the entertainment pavilion, offering whirlpool tubs, room service, three televisions, three phones, and free valet parking. Other amenities include workout room, saunas, outdoor pool and hot tub, and video arcade. The Inn at the Isle provides 241 spacious rooms across from the entertainment pavilion.
Carr said Isle of Capri's unique and branded themed concept of a Caribbean resort atmosphere has been an added attraction to gaming patrons.
"The Caribbean resort getaway experience is unique. It is comfortable. We offer something we call 'Isle Style.' It's not just a theme, but about how we interact with customers. It's very friendly as opposed to a formal environment you might find in other casinos," Carr said. "We do it within the notion that you are going to a Caribbean resort and just want to kick back and have a good time and we try to give that to you because we are in the good-time business."
Added Carr, "They want to be catered to when they go on a Caribbean vacation and we try to give them that sort of feeling when they come here." CJ
Just the factsAlthough gaming revenues are down this year, few would argue that riverboat gaming has been a long-term economic positive for the state of Louisiana. Here are some of the highlights:
•-Approximately 53 percent of all gaming revenue comes from out-of-state, mostly from
Texas. As a result, on average, over $18.2 million per month is received by the state and local governments in gaming taxes.
• Each year, riverboat casinos pay over $368 million in salaries to some 15,000 employees.
•The industry has invested more than $1.7 billion in facility construction, and employs hundreds of Louisiana construction workers to build luxury hotels and entertainment centers.
•Riverboat casinos purchase over 70 percent of all goods and services from Louisiana vendors including computers, printing and floral arrangements.
-Source: Casino Association of Louisiana