Reflecting on Revel
Jeff Hartmann signed on as interim CEO of Revel Entertainment in March and departed the company after his six-month contract expired at the end of September. Casino JournalExecutive Editor Charles Anderer spoke to Hartmann prior to his leaving Revel about where the Atlantic City property stands after completing a Chapter 11 restructuring in May, its successful July slot loss rebate promotion, which led to a 20 percent revenue increase for the month, and cost-cutting efforts which have included multiple rounds of layoffs. Here are some excerpts from that conversation:
With the many steps you have taken over the past six months, would you say that Revel is on the road to profitability?
Hartmann: We’ve clearly made some inroads in terms of moving market share to Revel. We had to make a lot of hard decisions in terms of our expense structure and changing what the organization looked like when the property opened in 2012 versus the realities of today. We’ve made adjustments and reduced tens of millions of dollars of costs and we’re pretty optimistic that we’re going to get to profitability in the near term.
Gamblers Wanted, which guaranteed gamblers rebates in the form of free play awarded in 5 percent increments over 20 weeks for losses up to $100,000, was big news in the industry. How would you characterize its impact?
Hartmann: Clearly, the Gamblers Wanted promotion was successful. We worked closely with Randy Fine and the Fine Point Group. Revel has a great casino floor and the promotion really energized it. Gamblers Wanted told the gamblers, “We want you.” We also made product changes by adding a 24-hour restaurant, adding Asian food with the Pearl Lounge. Gamblers Wanted really re-launched Revel as a casino. Many consumers we spoke to indicated that at times they didn’t feel welcome at Revel and I we tried to dispel that with a big broad statement.
You couldn’t have been surprised when some gamblers challenged the legality of the promotion, but, on balance, would you say the vast majority of gamblers understood it?
Hartmann: Absolutely. We obviously don’t respond to specifics on legal issues, but in terms of our disclosure process at our players club booth and our overall messaging, we believe that the promotion was transparent. The overwhelming majority of our players understood it; it’s the kind of thing that has been happening in gaming for the last 15 years.
A lot has been made about Revel’s lack of direct Boardwalk access and the positioning of the casino floor which requires a long escalator ride to reach and is not integrated with the hotel. Are these significant long-term challenges or are they somewhat overblown?
Hartmann: It’s somewhere in the middle. We addressed some of the directional issues in the casino with a very comprehensive enhanced signage program in May. The aspect of getting from the hotel into the casino is a structural issue that we will not be able to address in the short term. There are some longer-term plans to potentially address the escalator issue. But through great way-finding signage, we’ve created a better pathway to the casino right now.
What kind of time frames are you looking at when you’re managing through a difficult period like this?
Hartmann: Every day. We’ve challenged our management team to look at our costs and re-engineer our processes. We have a very day-to-day focus on how we can enhance revenues and reduce costs. Ultimately, the board will decide what Revel’s strategic path will be.
Revel does have considerable non-gaming assets. Which amenities are showing promise?
Hartmann: We have increased our hotel occupancy over the last four months. I think gamblers are responding to the great room product we have at Revel. We’ve started to energize our entertainment halls, Ovation Hall and The Social. Over the summer, we started the Cirque Dreams show, which has been well-received by the casino customer. Ovation’s entertainment will only get better as time goes by. We had some challenges during the bankruptcy attracting acts, but the talent there will be very strong going forward. That will compliment a very strong dining product, including a very strong value restaurant, Relish, that we introduced in the spring.
It would seem that in a crowded and tightening market, Revel has learned to put the gambling first and the resort second.
Hartmann: Revel did a very good job of launching the resort in 2012, with great group and leisure response. Revel, along with one or two other properties in Atlantic City, is uniquely positioned to get that guest. Ultimately, the business model didn’t work. Right now, we understand that the casino customer really is needed to support the capital structure. The leisure and group guest compliment that, but that casino customer will help Revel get to where it needs to be in terms of profitability and long-term viability.
How do you keep employee morale where it needs to be in order to protect the quality of staff and guest interactions and the overall guest experience?
Hartmann: Our HR department has done a great job, starting in 2012, by hiring the right people. We have great employees and I think we try to do things the old-fashioned way. I have found over the years that the quality of your employee relationships starts with the interactions between supervisors and front-line professionals, and we always are sure to maintain strong communications there. We have team meetings with leadership and try to get employees to understand what the business vision of Revel is going forward. When we rolled out the Gamblers Wanted campaign we met with casino employees and explained how important their role would be in rolling out the campaign and in helping with the transformation of the casino. We can always do better, but, overall, we’re doing a very good job, and we’re always looking to be proactive in identifying areas where we’re not doing the job we should be doing.
Revel is one of the only remaining properties in Atlantic City that has yet to identify an Internet gaming partner. What’s your philosophy on iGaming as an area of opportunity for Revel?
Hartmann: Internet gaming is being handled by our Board, so I can’t comment for Revel. But my view is that, ultimately, if you integrate the iGaming customer with the bricks-and-mortar property with the proper rewards, I think it can be similar to a retail experience where people shop at macys.com but still enjoy going to Herald Square for that ultimate shopping experience.