Study: Atlantic City casinos should comp travel expenses

The news about the Atlantic City gaming market is bad. Again. September’s gaming revenue numbers were down 6.3% compared to September of last year.  

Perhaps Atlantic City’s casinos can take a cue from a new study that found providing vouchers for travel and parking paid more back per dollar than free rooms, drinks and food.

“Many of these gamers would have visited Atlantic City anyway,” said Seul Ki Lee, assistant professor of at Temple’s School of Tourism and Hospitality Management, of gamers who received room, food and beverage vouchers. “The travel-related comps help bring new demand into the Atlantic City market, although this demand increase is not exclusive to the rewarding casino as the comps are not as binding.”  

The numbers, which were drawn from 2008 to 2011 casino monthly promotional allowance and expenditure data, are startling. Every dollar spent on comped room, food and drink returned $2.51 to the entire market – not just the issuing casino. However, every dollar spent on travel and parking returned $8.45 for the casino and $11.19 for the entire market. 

Lee admits that changing the system would involved a paradigm shift on behalf of the casinos, who would most benefit by working together to bring more people to Atlantic City through comps vs. offering room, food and drink vouchers to their regular customers. Getting casinos to work together isn’t the easiest thing to do, especially when they’re vying for fewer gaming dollars.

But at this point, isn’t anything worth a shot? While Atlantic City was posting a loss, Pennsylvania’s casinos reported an 3.3% gain for this September compared to last year. If Atlantic City’s going to stay tied to gaming, revamping the comp system is worth looking into.