Vol. 5 No. 1, January 2008
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Interview: Jay Snowden
Jay Snowden, Senior Vice President and General Manager, Showboat Casino-Hotel
Three years ago, the Showboat opened a House of Blues outlet, with all the amenities associated with that brand. While the HOB has distinguished Showboat from other casinos, it has only recently begun to work the way Harrah’s executives thought it should. Jay Snowden, general manager of Showboat, came to the property with one mandate: make it work! His role cannot be understated as the HOB begins its first full year under Showboat management. He spoke with Casino Connection Publisher Roger Gros and Managing Editor Marjorie Preston at his office in the Showboat in December. The full version of the interview can be accessed at www.casinoconnectionac.com and click in the Boardwalk Podcast button.
Casino Connection: Let’s start with what you feel are your main accomplishments since you started at Showboat.
Snowden: I was tasked with coming here and “making it work” between Showboat and House of Blues. There have been some definite bumps in the road, given the core demographic at the Showboat over its first 18, 19 years and the House of Blues core customer, but we continue to work on that transition. The guest-service experience has been very successful overall, particularly in the last six to 12 months of making the two brands come together.
When we first heard about House of Blues coming in here, it seemed to be a no-brainer. A lot of day customers would move out, leaving plenty of space in the evening for younger customers. But it didn’t really work that way.
It sounded like a good plan, but not all of our day customers go to bed at 8 p.m., leaving the place empty for a new customer to come through. We’ve had clashes on occasion in terms of customer sets—one that’s more core and original, and one that’s a bit younger. But we’ve done a very good job of meshing these two together. It’s not really a day-part, night-part strategy. House of Blues helps us bring customers into the building who may otherwise never have visited Showboat, so it certainly introduces us to a lot of new business. And the core Showboat customer is very happy overall with all the changes we’ve made.
When House of Blues came in, it was a joint venture arrangement, but now Showboat has taken over the operation of the House of Blues. Explain why that occurred.
The way the original contract was cut, we funded the build-out of the House of Blues expansion, which was in the neighborhood of $65 million. That included the Music Hall, the restaurant downstairs, the Foundation Room, the poker room, the casino renovation and Club Worship, the nightclub. The way the contract worked was that House of Blues essentially operated all those venues on their own, and we ran everything else, even the gaming components of the House of Blues-themed areas, the casino and the poker room. That overall was successful, but not as successful as it could have been.
I negotiated a new deal to make it more successful. Today we have a deal with House of Blues that allows us, for all intents and purposes, to operate all the House of Blues venues and activity that takes place here at the Showboat.
There were some pretty wild acts that came in here, some rap acts and things of that nature. Have you skewed the entertainment philosophy a little bit differently?
I would say from a diversity of offering standpoint, no. House of Blues represents a diversity in offering and we are going to continue to live up to that brand standard. But we had a few along the way that were a little bit more on the extreme side. That’s where we tended to have some customer service issues on occasion. Now that goes beyond hip-hop or rap. We had some with the heavy metal genre, we had some with the comedy genre. So you can find extreme acts within any genre of music or entertainment. That wasn’t real good for the business here, for the overall guest service experience. But as I tell people all the time, 95 percent of what was booked at House of Blues, we’ll still book now. It’s that 5 percent of extreme within these different genres that we’ve carved out to make the guest service experience seamless overall on property.
Are there other expansion projects on the books?
Like any casino, we’ve gone through expansion discussions; we’ve actually gone through design concepts for a lot of things. Down the road there is absolutely going to be great opportunity here to expand. It’s going to be very fun for us to finally have a neighbor on the other side in Revel Entertainment, and we’re very excited about Revel opening up. Taj is building another tower and doing renovation over there. Most importantly, it brings more critical mass down to the north end of the Boardwalk, which will be new for us. Being the last property on the Boardwalk does not have its advantages many times. Having two neighbors will be great, especially with one being a brand new project and the other one being largely renovated. I think it brings a lot more interest and excitement to the north end of the Boardwalk.
One of the things you did when repositioning the House of Blues was to combine the House of Blues and Showboat employee pools. How has that worked out?
I think it’s worked out fantastic. After a merger or acquisition, trying to transition or combine a couple of different cultures is never an easy task, but I think overall it’s gone very well. We spent a lot of time thinking through our plan during the nine, 10, 11 months of negotiation. Again, it’s far from perfect, but I think the overall feeling from the House of Blues side is that they know, number one, that we care about them and care for them; two, that they are an integral piece of the guest service experience here; and three, we are not going to be a success at this property unless both of these cultures come together and resonate.
How do you motivate your long-term employees?
You’ve got to keep life fun. You’ve got to keep things new. You’ve got to introduce new concepts and employee engagement initiatives. We’re still the only gaming company and one of the only companies in the world, period, that shares in the profits with the employees when we’re setting customer service goals.
We have a program called CSA, Customer Service Assurance, and our employees have an opportunity to earn up to $200 a quarter, every quarter of the year, if we are hitting our customer service goals, which are all based on growth of scores over last year for the same quarter. We’ve paid out upwards of $100-plus million in the six or seven years the program has been in place, and upwards of $5-plus million just at this property.
Atlantic City is going through a tough time right now. What’s your view of the short-term future of Atlantic City?
I say to people all the time (and they look at me like my eyes are crooked), “What we’re going through right now will be the best thing that ever happened to Atlantic City.”
I don’t know that Atlantic City would have ever changed if not forced to change. For the first 25 years, these casinos were all gambling machines. That’s all they offered: slot machines, table games and hotel rooms. They never had to really compete with Las Vegas, or chose not to compete with Las Vegas because it’s so far away. What we’re going through now—and it’s painful when your core revenue stream is down between 5 percent and 10 percent, which is the case for all of us—it’s painful. But in three years, when these new projects start to open up and these renovations continue, Atlantic City will be a lot more like Las Vegas than anyone would have ever imagined had we not had the competition open up in neighboring states.
I also remind people all the time that outside the slot business, the trends are phenomenal. We’re seeing great table games growth, great poker growth, great Asian business growth. We’re seeing great non-gaming growth—cash from the hotel and food and beverage.
There are a lot of people in town now because of the new amenities who didn’t come five years ago. They’re spending in different channels. They don’t spend through the slot machines as much as they do through other areas—nightlife, food and beverage, hotel, etc. There are a lot of exciting trends.
Unfortunately, the one big trend that matters the most is not a positive trend. But we’ll get through it. I think you have a lot of exciting entrepreneurial leaders in this market who think about the business model the way it needs to be thought about, people from other markets like Las Vegas who want to help take Atlantic City to the next level. That’s what we’re all committed to doing.
