The $50 Million Budget: Real Renovation

How to make the most of your budget

Taj Mahal Spice Road, Location: Atlantic City NJ, Architect: SOSH Architects

Nobody thinks of $50 million as a small amount, chump change, “peanuts,” or just walking-around money. But when it comes to renovating casino properties, $50 million is often considered a small amount.
   
Yet, a small amount may be all that a property can manage in the current economy, and if that’s the case, where should the money be spent? Where will it make the biggest impact?
   
We asked that question of a number of leading design and engineering firms that have done a significant amount of work in the casino industry. Their answers have a general consensus, but some of the responses may surprise you.

The Gaming Floor

Several of our respondents pointed to the gaming floor as a good place to make a big impact with a small budget. Tom Hoskens is a principal of Cuningham Group Architecture, which designed the $44.5 million renovation of the Palace Casino Resort in Biloxi. Hoskens points out, “Even on a small budget, one opportunity for change that does not necessarily involve a large investment of capital is changing the layout of the gaming floor, and the path by which guests experience the gaming environment.
   
“A different layout will change focal points and add pathways and corridors, thereby encouraging guests to explore and criss-cross the floor to reach certain amenities. While carpet and ceiling treatments need to change to work with the new flow, the impact is substantial, and for less money than what it would take to add floor space.”
   
Dike Bacon of the Hnedak Bobo Group puts it rather succinctly when he states, “Make your revenue-generators visible.” Hnedak Bobo Group recently applied this principle to the Sycuan Casino, near San Diego, California, in a $27 million renovation.
   
Brian Fagerstrom of WorthGroup Architects cites the example of his firm’s addition and renovation of the Hard Rock Hotel & Casino Tulsa, Oklahoma, as part of the Cherokee Nation. Changes on the gaming floor included the games themselves.
   
“Another important trend in the U.S. is the dynamic transformation occurring on the gaming floor with the influx of interactive gaming as the future of i-gaming is on the horizon,” Fagerstrom says. “This is interesting from the design perspective as there is a need for maximum flexibility and adaptability with changing amenities and new technologies. Perhaps most appealing in these trends is that their implementation can be accomplished in many properties for relatively reasonable capital investment.”
   
A note of caution is in order at this point. Many properties have been renovated over the years—sometimes because a concept fails and is replaced with another, and sometimes because an ownership change brings about a new change in focus or direction. This sort of change over time can result in a disjointed environment.
   
Bacon describes the Sycuan Casino as “suffering from repetitive addition syndrome that resulted in the casino feeling very piecemeal and closed off from one area to the next.”
   
Ken Kulas of Cleo Design adds, “Over time, many casinos will modify in reaction to specific guest services, changes in technology, or personal taste of the current operator. A property can lose the original focus and build upon designs that are slightly skewed from a brand direction and end up with a disjointed comprehensive interior that can confuse a guest.”
   
According to Kulas, a solution that Cleo Design has used in several properties—including the Las Vegas Hilton, the Golden Nugget Casino Las Vegas, and the Stratosphere Casino in Las Vegas—utilizes the concept that “surface changes rather than construction can make a huge impact to a renovation, yet are much more friendly to an owner’s budget. Décor—being the most recognizable difference when renovating a casino—can be as easy to understand as its brand.”

Make Every Part Contribute

Many renovations are initiated when an amenity, for whatever reason, doesn’t attract customers. A certain ethnic food, for example, may not find many fans in one part of the country.
   
Mike Stewart of YWS International gives us an overview: “Typically opportunities exist in unused, non-revenue- generating space or space that can be adapted for another use once its primary use is closed, such as a race and sports book. After analyzing the competition, the facility infrastructure and the customer needs, we can typically develop new concepts, including new F&B venues, potential brand partnerships, or retail/entertainment amenities, which can become new revenue opportunities for the owner.
   
“One project we recently completed was the buffet remodel at the Hard Rock Hotel & Casino in Tulsa, Oklahoma. Not only did this project completely change the look and feel of the buffet but it also incorporated unused space to increase seating capacity by approximately 20 percent.”
   
SOSH Architects had a similar experience with the Trump Taj Mahal in Atlantic City. According to Tom O’Connor, “SOSH started with a successful $25 million interior renovation which translated into an extensive $11 million Boardwalk improvement renovation. SOSH was able to introduce a number of retail and F&B venues with access directly off the Boardwalk to ‘activate and celebrate the public access.’”
   
Another danger with amenities is the underperforming one—one that may do well at certain times but is relatively dead at other times. David Nejelski of Thalden Boyd Emery points out, “During off-peak times, center bars create a ‘dead zone,’ an area that does not contribute to a guest’s experience or the property’s revenue. An isolated venue as well can be empty for a majority of hours in a day—or even days.”
   
Nejelski cites, as an example of successful renovation, the Commerce Casino in Commerce, California, where a new River Bar made an impact even during off hours: “The alignment of the bar with the new ceiling element is all that is needed to create a space. It has the added advantage of never feeling empty, as people are always walking past. Bei
ng completely open, many of those people stop to get a drink. After opening, beverage revenues property-wide increased by nearly 20 percent.”

A Strategic Balance of the Amenity Mix

Amenities—bars, restaurants, spas, pools, retail and entertainment venues—are an important part of the appeal of going to a casino. Guests will go to a casino more readily if there is more to do than just visit the gaming floor, and more attention is being focused on having the right mix of amenities in the right location than ever before.
   
“We are seeing considerable strategic thought go into the selection of amenity mix at properties that are finely tuned to customer appeal,” Fagerstrom explains. “Abundant attention over the past year has infused the amenity mix with highly popular retail brand names—whether a famous chef, the hottest reality show, or most popular country singer.”
   
Hoskens of Cuningham Group echoes this view when he explains how changes in the amenity mix helped rejuvenate Palace Casino.
    
“The dramatic renovation and changing the mix of amenities allowed Palace to evolve to a more upscale market,” Hoskens says. “In doing so, it appeals to those seeking a destination and entertainment experience, not just a place to gamble. Palace capitalized on the trend of giving guests more reasons to stay longer, spend more and return again.”
   
Illuminating Concepts is a lighting and media design firm that has done a great deal of work in casinos. Michael Shulman of Illuminating Concepts explains his firm’s philosophy towards the gaming environment:
    
“There are many ‘features’ that we design and collaborate on for all of our projects,” explains Shulman. “We remain consistent that the entertainment strategy is not to create or deliver one feature but instead many elements, features and experiences to create a ‘must feel’ environment. We do utilize lighting and media to heighten the visitor expectation and try to instill a sense of personal belonging and interest into the space.”
   
Another element in creating the right mix of amenities is to go after the non-gaming guest. The Sycuan Casino saw a potential market in non-gaming customers and asked Hnedak Bobo Group to help exploit the opportunity.
    
“Many of our clients are focusing on non-gaming customers as an untapped potential revenue-generator,” Bacon says. “The Sycuan Tribe is a primary sponsor of area professional sports teams, the MLB Padres and NFL Chargers, so their new 6,500-square-foot, blue-and-gold-themed food and beverage venue was a natural fit as a sports bar that targets a younger demographic. It’s quickly become one of the hottest bars in San Diego County.”
   
The non-gaming customer is also drawn by nightclubs, specifically designed to attract younger customers.
   
“We are celebrating a new demographic, the Generation M, the Net Generation, those who have spent their entire lives with the World Wide Web,” Michael Mangini of SOSH Architects explains. “We are designing nightclubs that enliven and energize through the use of communications and media technologies—an immersive club experience. Casino properties are looking to capitalize on the extremely prosperous business of a nightclub while singularly identifying and branding their property as the ‘place to be.’”

Improving the Experience

Few gaming equipment, gaming floors, and a great amenity mix can still fall short if your guest has an unpleasant experience in the visit. With smoking being banned in more and more locations, people do not have the experience typical only a few years ago, of coming home reeking of cigarette smoke.
   
Most casinos still permit smoking, and most guests tolerate it—but the less smoke they experience the more they enjoy their stay. Greg Peterson is a mechanical engineer with AE Associates, a mechanical, plumbing and electrical engineering firm that has worked on several casino renovations.
   
“By far, the biggest reason we come across to improve a casino’s MEP (mechanical, electrical and plumbing) system is that it does not adequately remove cigarette smoke,” says Peterson.
    
Bacon makes a similar observation: “Give customers what they want. Many of Sycuan’s customer’s requested a non-smoking casino environment. Leveraging this kind of feedback, Sycuan built a 400-slot, 10-table boutique casino within a casino dedicated solely to the non-smoking gaming customer. Often, an attainable increase in returns can be found by raising the perceived level of quality of the facility by just enhancing the gaming experience itself.”
   
Peterson points out that one of the best times to upgrade the mechanical systems is when an overall renovation is taking place. Of a current project on the boards Peterson explains, “During conceptual design, ownership quickly realized the renovation was not addressing all of their customers’ needs, as the No. 1 guest complaint is cigarette smoke. As part of the renovation project, we are improving the HVAC system’s ability to remove cigarette smoke. When the renovation project is done, not only will the casino have a new, fresh look, but the air will be a lot fresher too.”
   
Of course, the environment in a casino is more than just the quality of the air. One simple addition to the gaming environment that provides energy and excitement has been used successfully by Cleo Design.
   
“A current trend for the gaming area to add energy and excitement for relative low cost is the use of the video monitor,” Kulas says. “Placed in highly visible public areas, a variety of content including promotions, directional information, sports and music entertainment can add that layer to help animate and update a vibe.”
   
Turns out that you can do a lot of things with “only” $50 million! Alter the gaming floor, improve the amenity mix, make better use of available space and venues, and clear the air are only a few items that a property can do to improve its
appearance and attract more guests. But don’t neglect other areas, such as the guest room experience, and the valuable use of pools—all day long and into the evening.

   
There are many options open to a property, and some will make more sense based upon local conditions than will others—but there are also a number of solid design professionals to help you reach your goals.

Articles by Author: Klaus Steinke & Jane Lee

Klaus M. Steinke has worked on a variety of hospitality, casino, commercial and other office projects, several of them exceeding $100 million in construction costs. His most recent project was the $300 million Rivers Casino in Pittsburgh. His 27 years as a licensed architect has been both in the office and in the field. Steinke is a strategic partner of American Project Management, LLC.Jane S. Lee is a managing partner and co-founder of American Project Management. She has 30 years of marketing, business development and management experience in the global financial, investor relations, design and construction industries.  She is responsible for establishing and maintaining client relationships in casino, hospitality, Indian gaming, entertainment, international investor relations and financial markets.