Revel: Right Idea, Wrong Time and Place?
It’s kind of a weird take on the Revel situation in today’s Inquirer. The headline captures the basic spin: “Revel: Right idea at wrong time and place, say many.” That would seem to make it the wrong idea wouldn’t it?
But maybe it was a good idea and the bad circumstances — the wrong time and place — weren’t quite knowable at the time? Not according to the Inquirer’s own reporting:
In a note to investors on Thursday, gaming analyst Andrew Zarnett of Deutsche Bank AG wrote: Revel “should never have been built, not because of its bad design, location, or business plan, but because you just don’t add more supply in a declining revenue market where competitors are bringing supply closer to your feeder markets.”
Revel’s fall is seen now as a textbook business school case study of what not to do. Many went all in for the casino’s completion, despite the signs: The economy remained weak in 2011, discretionary spending was low, and regional gambling competition continued to eat into Atlantic City’s profits.
But Chris Christie backed it. And so did a lot of Atlantic City bigwigs. They saw the same conditions that everybody else did — a weak economy, encroaching competition from casinos in Pennsylvania — and decided to proceed on the basis of hope and the belief that Revel was too awesome to fail.
Hopeful groupthink doesn’t make a project the “right idea.” Matching the idea to the time and place is part of what makes that idea good or not. In fact, the math is pretty easy. Here’s how you know whether Revel was a good idea or not: It’s closing down after two years, having entered bankruptcy twice and never having had a profitable month. That’s kind of the definition of failure. Any suggestion otherwise is just spin.