Published: November 05, 2008 11:05 pm      

Resort to study impact of gambling

The Greenbrier to hire consultant, president says

The Greenbrier’s top executive has spoken out for the first in response to the passage of a table games referendum, and one hotel casino expert says gambling would ultimately help the resort attract guests.

Greenbrier County voters passed the measure Tuesday, 51.41 percent to 48.59 percent, or 6,683 to 6,317 votes. A similar referendum was soundly defeated in 2000.

Now the question remains whether The Greenbrier will apply for a casino license with the state Lottery Commission.

Resort president Andrew Fogarty did not answer that question in a carefully worded letter to employees Wednesday, saying The Greenbrier would once again study the issue by retaining “third-party adviser to comprehensively evaluate gaming’s potential impacts.”

“In the eight years since such a gaming proposal was first considered, the competition within our industry has dramatically increased, and we are operating the resort at a financial loss,” Fogarty wrote. “As you know, The Greenbrier continually reviews its overall business strategy, and that process is particularly important in today’s difficult environment.”

Financial documents have indicated the hotel has lost nearly $39.5 million since 2003. Those losses have resulted in a restructuring of the resort’s business plan, which is at the heart of a 13-month labor dispute. Union officials representing about 1,200 workers at the resort asked the county commission to put the gaming measure on Tuesday’s ballot and promoted the referendum as a way to boost revenues and help protect jobs and benefits.

Fogarty said although the outcome of the comprehensive evaluation is unknown, “we do know that gaming would require significant investment in a challenging economy and therefore must be evaluated very carefully.”

The Greenbrier is owned by railroad giant CSX, which recently pumped $50 million into the resort for upgrades.

“In the meantime, it is important to make progress with the Greenbrier Council of Labor Unions and strive to reach a collective bargaining agreement that returns The Greenbrier to a competitive market position,” Fogarty said.

Casino-styled gambling at the four-star resort has the potential to regain that competitive market position, said Martin Baird, CEO of Casino Customer Services. The Idaho-based company provides “operational and marketing consulting” to high-end hotels across the globe in the casino hospitality industry.

Baird said the recent economic downturn has cut profits in the U.S. gaming industry, much like other businesses. However, in the long run, for a resort like The Greenbrier to offer gambling as an amenity would pay off in attracting overnight guests and conferences.

“Absolutely. Gaming will come back. That’s the reason Las Vegas has a huge conference center,” Baird said Wednesday. “The more amenities a resort has, the more likely an overnight guest or meeting planners would choose the resort.”

But Baird was quick to point out that gaming is not the cure-all for any resort looking to shore up its bottom line.

“I think it’s a business decision and gambling should not be thought of as the golden goose, but over time, I believe it will help attract guests and be profitable for The Greenbrier,” Baird said. “It boils down to service. If the service is good at a hotel that has casino, the customer will come back.”

Greenbrier County Commissioner Brad Tuckwiller was hopeful now that the referendum has passed.

“I’m pleased that The Greenbrier has chosen to consider the casino option granted by our county’s voters. It’s encouraging that while the company was portraying ‘no comment,’ that did not mean that the decision was unimportant to them,” Tuckwiller said Wednesday. “I assume the consultant will provide the hotel’s owner a multi-option business plan with which they can compare returns on investment as to how they should proceed. That is good news, regardless whether the plan includes CSX operating a casino. As we have seen this year, the hotel’s operation affects the whole county, so perhaps this communication from the voters will spark communication between management and the unions because we all hope the inertia of 2008 is not repeated in 2009.”

— E-mail:

cgiggenbach@register-herald.com