ATLANTIC CITY, NJ — The COVID pandemic forced most U.S. casinos to close for months, resulting in a slump in payrolls, revenue and earnings.
But the enforced shutdowns and heavily regulated restores have also taught the industry useful lessons that will endure even if the pandemic is a distant memory, panellists at a major casino conference said on Thursday.
Speaking at the East Coast Gaming Congress, executives at major gaming companies said the changes the pandemic has forced them to make have had some upsides.
“We have learned lessons that cannot be unlearned,” said Thomas Reeg, CEO of Caesars Entertainment.
“It compelled us and gave us an opportunity to tell our guests that things that used to be considered entitlements might not need them as much as they thought they did,” added Jim Allen, chairman of Hard Rock International. “Do you need a buffet? Should it be a buffet?”
The conference took place at the Hard Rock Casino in Atlantic City, whose buffet is still in operation. Some of Hard Rock’s casinos in other states, including Florida, offer buffets while others don’t.
David Cordish, chairman of the Cordish Companies, which operates casinos in Pennsylvania, Florida and Maryland, said the pandemic presents his company with an opportunity to “streamline the ship.”
“We haven’t gone back to buffets,” he said. “It sure wasn’t fun. The months-long closure has been appalling for employees. But many lessons were learned.
“What we did – and we may have to do again – is when we were closed, we conducted every possible type of health and safety screening that you could do,” including hand sanitizer and barriers between player positions at table games, Measures to measure this have been implemented frequently in casinos across the country.
Cordish said that spending paid off handsomely once casinos were allowed to reopen in mid-2020.
“People got tired of being locked up and flocked back to the casinos, especially when we were doing these things,” he said. “Since the reopening, business has been excellent.”
Eric Hausler, CEO of Greenwood Racing, which owns Casino Parx in Pennsylvania, said the pandemic has opened his eyes to a specific liability.
“We had a restaurant that was open every day for lunch and never made any money,” he said. When the casino reopened after its pandemic-related shutdown, “we didn’t bring it back and nobody ever said anything about it.”
The daily cleaning of casino hotel rooms has become another casualty of the pandemic in some places. In June, Atlantic City’s largest casino workers’ union filed a complaint with the state that four casinos did not clean hotel rooms required by law on a daily basis and one admitted that it did not have enough housekeepers to clean all rooms every day.
Leading hotel companies say the combination of a shortage of cleaners and a reluctance by some guests to let hotel workers into their rooms during their stay has led to a daily housekeeping standard being abandoned at resorts across the country.
A lasting effect of the pandemic is lower payrolls. This is due both to workers being laid off and not reinstated during or shortly after the closures, and the continued difficulty in attracting new workers across the gaming industry, as in many others.
Jayson Guyot, president and CEO of Connecticut’s Foxwoods Resort Casino, said he ordered a complete top-down restructuring of the business during the shutdown — something that would have been difficult if it were still in operation.
“It has allowed us to rebuild our margins from 10% to 13% to 18% to 20% now,” he said.
But he also voiced a common concern: Foxwoods has not yet returned to pre-pandemic levels of business.
That’s a major concern for Atlantic City’s casinos, which overall have yet to return to 2019 revenue and profit levels for in-person gaming.
Second-quarter results released in August show that five of Atlantic City’s nine casinos failed to surpass their pre-pandemic profit levels, and the resort as a whole saw profits fall nearly 1%.
Atlantic City has thousands fewer casino employees than before the pandemic. Like virtually every other casino market, it struggles to attract new workers and retain existing ones.
Hard Rock recently made headlines by spending $100 million to give big raises to 10,000 untipped workers, most of them in the United States. Other companies have recently made smaller salary increases. Foxwoods has raised its minimum hourly wage from $10.50 two years ago to $14.50 now, Guyot said.