Hurricane Sandy has long dissipated into the annals of history, but the havoc it caused in Atlantic City is still being felt to this day.
It’s hardly an understatement to say that the destruction Sandy caused in the AC had a debilitating effect on the town’s tourism. No more was that evident than when Borgata, Atlantic City’s highest earning casino, reported steep drops in net revenue and operating profits in the fourth quarter of the 2012 fiscal year.
The announcement was made by Borgata’s parent company, Boyd Gaming Corp., who released figures of the casino’s 4Q performance and reported a drop of 16 percent in net revenue to $147.6 million compared to the numbers it pulled in the fourth quarter of 2011. More depressingly is the 63 percent drop in gross operating profits to just $14 million from the same time frame.
For the entire year, Borgata’s net revenues also dropped by 6 percent to $686.2 million with its operating profits also seeing a steep decline of 26 percent to just $117 million.
So what caused Borgata’s rather depressing 4Q performance? Well, fingers seem to point to Hurricane Sandy, which ravaged Atlantic City and pretty much the entire northeastern seaboard back in November. The destructive force of the hurricane was largely felt in the gambling destination, causing unprecedented damage that forced all of the town’s casinos to shut down for five days. In a recent conference call with industry analysts, Boyd chief operating officer Paul Chakmak said that Borgata was “severely impacted” by the wrath of Hurricane Sandy, causing more than 5,000 room-night cancellations after Sandy completely laid waste to Atlantic City.
Fortunately, at least relative to the circumstances, Borgata’s December figures stabilized but not to the point where all the lost revenues from catastrophic hurricane could be recouped. It’s safe to say that had it not been for the busy holiday season, those numbers Borgata reported could have been much, much worse.