Since it went on sale months ago, the ACH has not found or raised the interest of any potential buyers. The sale got event more complicated with the recent decision by Hilton Hotels & Resorts to end a licensing agreement that allowed the Atlantic City casino to operate under the Hilton name.
While it’s not clear how much the casino could be sold for, the sale price of two other Atlantic City casinos is giving analysts an approximate price tag. Resorts Casino Hotel sold for $31.5 million in December, while Trump Marina Hotel Casino reached $38 million when it was sold and rebranded as the Golden Nugget Atlantic City.
But for analysts, even if the casino valued at $513 million in 2005 plummets to the $30 million range, buyers would face several challenges, including an expansive property rebranding, and implementing new marketing strategies to increase its revenue and profit.
Despite a series of improvements, including a $20 million renovation last year that added four new restaurants and a remodeled gaming floor, the Hilton would need to grow and build additional gaming space and hotel rooms. At just 75,416 square feet, the Hilton’s gaming floor is the smallest in Atlantic City. The Hilton has 809 hotel rooms, the second-smallest number in the state’s gaming industry.
New owners will also have to struggle with Atlantic City’s economic downturn and the growing competition from surrounding states. Since it highest mark reported in 2006 ($5.2 billion), gaming revenue in New Jersey has decreased 30% to $3.6 billion in 2010.
Through the first six months of 2011, the Hilton generated $74.1 million in gaming revenue, 8% less than a year ago. Last year, the Hilton reported an $18.9 million operating loss plus $7.3 million loss in the first quarter this year, making it one of Atlantic City’s worst-performing casinos, surpassed only by the Golden Nugget AC and Trump Plaza Hotel and Casino.