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Wednesday, 15 February 2006 00:00

$254 million Harrah’s expansion targets baby boomers

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Harrah’s Cherokee Casino and Hotel is planning a $254 million expansion and upgrade of its operations, including a third hotel tower, new entertainment venue and overhaul of the casino floor.

The move will position the casino to capture the anticipated wave of baby boomers enjoying retirement and compete with the big casinos elsewhere in the nation when it comes to attracting high-rollers.

“The rest of the gaming industry is a constantly refreshing business,” said Ray Rose, the vice president of hotel operations, food and beverage and facilities. “If you want to compete with the top players in the business you have to reinvest in a big way.”

A major threat on Cherokee’s doorstep is gambling along the Gulf Coast, where the hurricane-ravaged casino industry plans to rebuild bigger and better — and on land — instead of being relegated to “off-shore” gambling with casinos perched on a foundation of pilings.

Harrah’s Cherokee has to be proactive or run the risk of being marginalized, especially among players who spend lots of money and take regular gambling trips, Rose said.

“They will only play at the premier properties — the best maintained, the most appealing, the properties with the most offerings,” said Rose. Once your reputations goes, “with some players you would never get it back. Their loyalty would shift and that’s the risk.”

In addition to keeping up with the times, the casino is rapidly running out of room. The two hotel towers are regularly full. Workers park in satellite lots and take a shuttle to work on peak weekends to free up parking for guests. Even the casino floor nears capacity on big weekends, Rose said.

Not everyone is thrilled about the casino’s expansion or the tribe’s casion operations taking on $254 million in debt. The Tribal Casino Gaming Enterprise Board — a panel of tribal members appointed to oversee the gaming operation — had to get permission from tribal council to take on the debt for the projects. When the request came before tribal council last month, some members of the tribe spoke against it.

“We still have an outstanding debt on the casino,” said William Reed, a Cherokee resident. “Until we pay that off it doesn’t make good economic sense to ask for another $254 million.”

Reed said many tribal members never wanted a casino in the first place, but tribal council didn’t let the people vote on it.

“This thing was shoved down people’s throat whether we wanted it or not,” Reed told the tribal council. “You are here to do the will of the people. You know the people would have voted against it.”

Councilwoman Mary Thompson told opponents the casino operation has a mandate to make money for the tribe, which benefits everyone.

“Not only for tribal members and the per capita checks, but for the tribal government and all the services it provides — that’s for trash pick up, day care, higher education, the hospital, home loans — that’s everything,” said Thompson. “I don’t think we should tie their hands from trying to make that enterprise prosper.”

After meeting with the casino operators and the Tribal Casino Gaming Enterprise to learn about the plan and touring the complex to see the needs first hand, tribal council approved the $254 million loan needed for the projects.

“The potential for growth at Harrah’s Cherokee — as an employer, contributor to the local economy and a business asset for the Eastern Band — is tremendous,” said Norma Moss, chair of the Tribal Casino Gaming Enterprise.

 

Priming the pump

One day, the tribe hopes to have live card dealers, which could trigger a huge jump in guests. The state limits Harrah’s Cherokee Casino to computerized gambling, such as slot machines and a digital version of blackjack where the dealer pushes a button instead of dealing from a real deck. Gov. Mike Easley holds the sole authority to allow live dealer games like poker, blackjack and roulette. The tribe has been lobbying Easley on the issue for years, but there is no indication whether the tribe is getting anywhere.

“As we think about master planning, we always think about our on-going negotiations with the governor, which would certainly be a trigger,” Rose said. “If legislative changes were favorable, we would need to expand our gaming floor.”

For now, however, the casino floor will be modernized with a complete overhaul of the décor.

“It hasn’t changed since we opened,” Rose said.

Also in the works, albeit one of the last projects on the list, is the construction of a spa.

“The baby boomers have a lot of disposable income and are very experience-driven,” Rose said. “We feel a world-class spa will be vital to the resort destination experience. The entire industry is doing this — looking at the ratio of gaming to non gaming amenities.”

In other words, it’s about giving guests more to do during their stay besides gamble. The newest casinos of Las Vegas are becoming mega resorts, an ultimate experience with on-site dining, shopping, gaming and entertainment, Rose said.

Speaking of entertainment, the $254 million plan also calls for a new showroom for touring performers. The existing auditorium has 1,500 seats. The new showroom will have between 3,000 and 3,500 seats.

“That would allow us to attract bigger shows,” Rose said. “We would also upgrade any technologies that have come on the scene.”

The existing showroom, not quite nine years old, will be remodeled and made part of the casino floor or possibly used to house more food and beverage service.

 

Out of room

Harrah’s built its first hotel tower in 2002. It opened a second hotel tower about a year ago. The two have a total of 576 rooms — and average 98 percent capacity.

“It is full all the time so there is still a lot of demand out there,” Rose said.

Harrah’s contracts with several surrounding hotels to permanently set aside blocks of rooms for casino guests, providing guaranteed overflow. Harrah’s also has negotiated rates at other hotels for any casino guests sent their way.

The new plans call for a third hotel tower at the casino complex.

“We have 3 million plus people come through a year,” Rose said. “The gaming community prefers to stay on property.”

A bigger casino floor and third hotel tower for more guests means more parking. A 1,000-car parking deck is included in the plans.

“On peak weekend we are limited by our ability to park,” Rose said.

Harrah’s also wants to update its rooms in first hotel tower, primarily with new carpets, drapes and bedding, something already in the works.

“That is the same thing all hotels do to keep the room fresh,” Rose said.

While it seems a little on the early side, “we have such high occupancy there’s a lot of wear and tear,” Rose said.

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