Damn. After two years of hemorrhaging money since it opened in 2012, the gigantic and quite stunning Revel Hotel in Atlantic City is poised to go under. In a letter to employees obtained by the AP, Revel announced that if it cannot find a buyer before August 18th, it will cease operations. "If Revel is unable to complete such a sale promptly, Revel expects to close its entire facility," the letters read.
The closure of Revel—which many hoped would signal a revitalization of beleaguered Atlantic City—would be a heavy blow. Atlantic City has struggled to redefine itself as a tourist destination in an era when gamblers have an array of options in the northeast, and Revel, with its emphasis on fine dining, live music, world-class DJs, and burlesque, seemed like it could work. But groundbreaking on the $2.4 billion resort coincided with the 2008 financial crisis, and stalled in 2010 until New Jersey Governor Chris Christie offered additional tax breaks.
Revel filed for Chapter 11 bankruptcy last year, has been trying to find a buyer, with no takers. From the AP:
The Seminole tribe of Florida, through its Hard Rock franchise, has indicated an interest "if the price is right."
The casino is owned by investors who gained control of it during bankruptcy last year, swapping debt for equity in the property. The transaction wiped out 82 percent of Revel's $1.5 billion in debt.
But even with that extra breathing room, Revel continued to struggle. It acknowledged mistakes in how the property was marketed and operated, launching a massive campaign to try to win back patrons. But that backfired when a "You Can't Lose" promotion offering to refund slot losses angered many customers who thought their losses would be refunded in cash. Instead, they were gradually credited to a Revel account over several months, with restrictions on when the credits could be used.
Wall Street analysts said last month that Revel's current asking price of $300 million was too high. Last year it lost $130 million, up from $110 million in the first nine months it was open. The hotel is currently offering rooms at a steep discount, so take advantage while you can; it's gorgeous.
Revel employs approximately 2,800 full-time and 1,000 part-time workers.