Trump Casinos Recovering
For want of a vacuum cleaner, the guest room carpets at Trump Plaza Hotel & Casino stayed dirty.
For want of a dollar, Trump Taj Mahal couldn’t add a hotel tower like its competitors did.
For want of a little novelty, slot players at Trump Marina took their coin cups next door to the Borgata Hotel Casino & Spa.
But luck is turning for Donald Trump’s casino company, which emerged from Bankruptcy Court protection last spring and is aggressively trying to regain lost ground. With new management in place and money to spend, Trump Entertainment Resorts Inc. is getting its houses in order -- renovating rooms, adding restaurants and spending money on employee cafeterias and new uniforms.
Most important, it’s making money: In its first full quarter since the Chapter 11 reorganization, Trump Entertainment earned $3.2 million, a paltry sum by casino industry standards but an indication that the company’s fortunes are finally looking up.
“We’re thrilled to death. This is a long time coming,” said Trump Plaza cocktail waitress Marie Sheehan, a 22-year employee who says she’s getting bigger tips lately because of the improvements.
The Atlantic City-based company, which owns three casinos in the city, struggled for years under the weight of $1.8 billion in junk-bond debt, with interest payments eating up most of the cash generated at the slot machines and blackjack tables. After going public in 1996, it never turned a profit.
Skimping on upkeep and unable to pay for upgrades, the Trump casinos scraped by at a time when other Atlantic City casinos were building new hotel towers, opening new restaurants and sprucing up their entertainment to woo customers.
At the Plaza, the red ink made for dirty carpets. Housekeepers had to make do with 45 vacuum cleaners for the 904-room casino hotel and vacuumed rooms every other day instead of daily because there weren’t enough, according to company executives.
The Chapter 11 reorganization slashed the company’s debt, reduced interest payments on it by $102 million a year and provided for a $500-million line of credit. It also provided for changes at the top. Trump, the New York real estate mogul and star of television’s “The Apprentice,” ceded majority control to bondholders and relinquished his job as CEO.
He remains chairman of the board, earning $2 million a year under a contract that calls for him to make at least six appearances a year promoting his Atlantic City properties.
His replacement as chief executive is James B. Perry, 55, a veteran casino executive known for his ability to turn around struggling properties.
Since emerging from Chapter 11 eight months ago, Trump Entertainment has spent $32 million to renovate rooms at all three casinos, revamp the casino floor at Trump Plaza and build a glitzy new Boardwalk-fronting bar there. It also jettisoned Trump Indiana, a Gary, Ind., riverboat, hoping to focus instead on the big job of updating the Atlantic City casinos.
“The fact that they showed that profit is a reflection that good management is paying off,” said Dennis Gomes, a former Trump executive and president of the Tropicana Casino & Resort in Atlantic City. “But it takes about five years to turn a company around.”
Besides renovating rooms at the flagship 1,250-room Trump Taj Mahal, Trump Entertainment plans to start construction in June on an 800-room tower there. That’s a key element of the turnaround, since overnight guests typically spend more in casinos than day trippers.
A $25-million upgrade of the Taj Mahal’s main concourse also is planned, along with upgrades to employee cafeterias at all three casinos, new uniforms for workers and the use of live music on the Taj’s casino floor.
Shares of Trump closed down 6 cents Friday to $19.99.
