CASINOS
Seneca Gaming tries to avoid gambling with its future
Published: January 31, 2010, 12:21 pm
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When even seemingly recession-proof Las Vegas started taking hits because of the struggling economy, the casino industry knew it had to look in the mirror.
Because of the ongoing recession, casino visitors started traveling fewer miles and spending less, according to industry analysts and Seneca Gaming Corp., which operates three casinos in Western New York.
Seneca Gaming's response: Try to attract those who see casinos as a close convenience rather than a dreamy destination, according to Catherine A. Walker, chief operating officer of Seneca Gaming.
"People are looking maybe not for an overnight experience with a fine gourmet restaurant, but they may be looking for a couple of hours and a hamburger or something like that." Walker said. "I look at it more like movies. It's becoming more of an outing versus a day or two overnight stay."
Keeping up with a changing clientele — knowing that customers are more apt to visit casinos in their backyard rather than taking a hike to the Vegas strip or Atlantic City — has become vital to survival.
In December 2008, Seneca Gaming laid off 210 people, approximately 5 percent of its work force. At the same time, salaries for those in positions above vice president were trimmed, and pay raises were suspended for those making more than a $75,000 salary.
Seneca Gaming had its first-ever quarterly loss last year, reported for the three months ending June 30. Much of the loss was blamed on a write-off of $109 million in stalled construction projects, including the Buffalo Creek Casino & Hotel project in downtown Buffalo.
Late last month, the company reported its first full-year net loss of $19.37 million for the fiscal year ending Sept. 30.
As the corporation's earnings fell to $102.6 million in 2008 and struggles continued last year, Seneca Gaming officials vowed they had the ability to adjust and survive despite the economic perils.
Adapting to the economic downturn has meant offering discounts in restaurants, retail shops and spas, as well as lowering hotel room rates.
"We put different programs in place for our customers to see if we can drive some more traffic from locals into the building," Walker said.
Discounts are available at Seneca Allegany Casino & Hotel in Salamanca if customers bring in lift tickets from area ski resorts, as well as their hunting or fishing licenses.
Understanding the other interests of its customers help the organization decide where to focus marketing efforts, said former Seneca Gaming Chairman Jeffrey L. Gill.
"I don't know who you are until you open your wallet to me, not in relation to the cash that you have inside your wallet, but the cards you have inside your wallet," Gill said.
Seneca Gaming has begun to slowly utilize social networking Web sites like Facebook and Twitter to reach customers, including younger people, according to Walker.
They're most effective when getting out a message about things like the last-minute availability of tickets to entertainment events, and meal deals that correspond to other events. Seneca Gaming also is trying to increase the use of the Bear's Den Showroom, a 468-seat theater at its Niagara Falls site, she said.
Seneca Niagara Casino opened in the Falls on Dec. 31, 2002, while Seneca Allegany Casino opened in Salamanca in May 2004. A hotel added onto the Falls site opened in December 2005, while the Salamanca site added a hotel that opened in March 2007.
Construction on a permanent $333 million casino and hotel project in Buffalo was halted in August 2008. A temporary slots-only facility continues to operate.
Seneca Gaming's struggles are not unique in the gambling industry from a national perspective.
Revenues for Indian casinos in the United States grew only 1.5 percent in 2008, the smallest margin since 1988, according to the Indian Gaming Industry Report, released in December.
Income had grown at a rate of 5 percent in 2007, and at an average rate of about 15 percent over the previous six years, the report said.
The average room rate was down 30 percent in 2008 in Las Vegas, the city's Convention and Visitors Authority told the Washington Times.
In addition to lowering its own room rates, Seneca Gaming has been evaluating how it provides complimentary rooms to some of its customers at the Seneca Niagara Casino & Hotel, Walker said.
In terms of hotel room occupancy, the effect of the down economy has hit the Falls location more so than at Seneca Allegany Casino & Hotel in Salamanca, she said.
A survey of gaming professionals released in November by the American Gaming Association, the chief lobbying group for the gaming industry, found that 44 percent of respondents believe it will take three to four years for the industry to get back to pre-recession levels.
While Seneca Gaming officials say they aren't sure when things may turn around, about 85 percent of those who were laid off at the end of 2008 have been rehired, Gill said.
Employees who had their salaries reduced or raises frozen have since been compensated, according to Seneca Gaming officials.
"[If] you have a happy employee," he said, "[then] you have a happy customer."
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