The bankruptcy and closure of Revel Atlantic City offers many lessons for casino and gaming executives, representing an end to the era of a “build-it-and-they-will-come” marketing.
That is, the idea a high-end property can flourish in any environment; that by simply hiring world famous architects, luxury hotel executives and flash-in-the-pan chefs to create a 150,000-square-foot, 57-story, all-glass tower of glitz with a 20-acre beachfront presence, you have a recipe for an instant success. The belief that this concept would succeed now reads like a bad satire.
And yet, Revel stands as the second tallest building in New Jersey: A vacant symbol, its own name since removed and its employees dispersed throughout the depressed avenues and boulevards of Atlantic City like a real-life version of the Monopoly board game gone horribly awry; a reminder that conventional marketing often yields unconventional—even devastating—results.
On paper, of course, things looked very different than the outcome that happened for all to see and criticize. But, spreadsheets and business plans will accept whatever numbers and projections we enter into them, and given the belief that supply creates its own demand, the false comfort of so many eager bankers, investors and developers is a powerful blinder to common sense.
A half-hour survey of the surrounding area, with its high crime rate (19 murders in 2012, the year construction began for Revel, 322 robberies, 481 burglaries and 1,884 thefts), crumbling infrastructure and splintered boardwalk, confirms the obvious: That an experiential brand cannot survive in a setting with such a notorious reputation.
I take no pleasure in writing these words because, in my role as the Founder of The SpareCash application for Android and iOS, which transforms marketing into a science (thanks to the use of the ultimate incentive, money, to inspire controlled results), I want casinos and resorts to thrive. Their success is mine, too, provided the setting is right for guests to enjoy an interactive adventure.
But, explain to me (in much the same way, I imagine, Revel’s lenders are trying to explain to themselves)how“experiential marketing” can flourish, when, prior to having entered this self-contained carnival of chance and excitement, one experience some patrons may have had was apprehension? Why would individuals and couples have answered a hotel’s slogan that read more like a plea, “Gamblers Wanted,” than an invitation to indulge in weekend luxury? Notice, too, that Revel had no strategy for mobile engagement; there was no plan—and, to my knowledge, there are no existing blueprints among nearby casinos along The Boardwalk—for communicatingwith guests and busloads of gamblers.
These questions are, to a degree, rhetorical, but they are also legitimate queries about basic marketing tactics.
In the absence of a setting suitable for the kind of scientific marketing I believe is critical for acquiring the right intelligence about this audience, casino owners and investors must choose between the lesser of two costly options:
• They can run expensive TV advertising campaigns to build “awareness,” in the hope that this bombardment of the airwaves will compel viewers to seize on some promotion, a loss-leader for the casino, and hurry to Atlantic City for nonstop gambling; or
• The same casinos can hire teams of consultants, whose reports and recommendations will restate already acknowledged truths (albeit in a leather-bound study, replete with heavy-stock paper and colorful illustrations) that “America’s Favorite Playground” has a set of severe problems that belie its unofficial nickname.
The demise of the build-it-and-they-will-come business model will save would-be casino owners hundreds of millions of dollars.
Revel is, thus, a revelatory tale of corporate hubris, false assumptions and disastrous mistakes.
Simply stated, Revel built it… and they never came.
Gamblers wanted, indeed.