Business

June 25, 2007

Tropicana’s new owners reduce casino’s staffing levels

SUZETTE PARMLEY The Philadelphia Inquirer

ATLANTIC CITY – William J. Yung III nearly passed on bidding for Aztar Corp., the former owner of the Tropicana casinos in Atlantic City and Las Vegas, when the company went on the block last spring.

The president and chief executive officer of Columbia-Sussex Corp. said his marketing chief, Fred Buro, persuaded him to visit the gambling resort and to make an offer.

“I hadn’t been in Atlantic City in two or three years and hadn’t seen how it had cleaned up,” Yung said in a recent interview from his Fort Mitchell, Ky., office. “It is a much more attractive and competitive environment than before.”

Columbia eventually shelled out $2.1 billion for Aztar, outdueling rival Pinnacle Entertainment Inc., of Las Vegas, in a back-and-forth, 10-week bidding war. It gave Yung’s company a toehold in the two biggest gambling markets in the country.

If Tropicana casino workers didn’t know what to make of the ownership switch when it was announced last May, they do now. Several hundred of them have lost their jobs since the sale was made final Jan. 3. And some labor leaders point to Columbia’s actions as one of the reasons dealers at two other casinos in Atlantic City have voted overwhelmingly in favor of union representation for the first time in two decades.

Through its Columbia Entertainment Co., Columbia-Sussex has been in the gambling business for more than 13 years, owning casinos in smaller markets, like Lake Tahoe, Nev., and Greenville, Miss.

The privately held company is the largest licensee of Marriott Hotels throughout the country. In October 2005, it acquired 14 Wyndham Hotels for $1.4 billion, including the former Wyndham at Franklin Plaza in Philadelphia, which has since been renamed the Sheraton Philadelphia City Center hotel.

In the hotel business, Columbia is praised for its cost control and for keeping management layers lean.

Buro, who joined Columbia in 2000, introduced new branding concepts, technology, and direct-marketing efforts to reach hotel and casino customers. Having spent 10 years at what is now known as Trump Entertainment Resorts Inc., Buro was picked to run the Tropicana.

The Tropicana reported $459 million in total revenue in Atlantic City last year. It also employed more than 5,000 people as of March 2006.

To Yung and other Columbia officials, the Tropicana had too many employees for a casino its size.

Yung said the job reductions were needed to get the Tropicana in line with the other casinos’ staffing levels.

So Columbia began laying off employees in January.

Numbers from the New Jersey Casino Control Commission, which tracks Atlantic City’s gambling industry, showed the total number of Tropicana employees – full-time, part-time and other – at 4,123 as of March 1, compared with 5,052 a year earlier, down 18 percent.

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