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Deadwood tries to spring back to life with tourism revamp

A sign hangs in downtown historic Deadwood.
Harriet Baskas | CNBC
A sign hangs in downtown historic Deadwood.

Since its Gold Rush-era founding in 1876, South Dakota's frontier town of Deadwood has been through several booms and busts. However, it retains a veneer of the Wild West, and to this day maintains stories of legendary residents such as Calamity Jane and Wild Bill Hickok.

Yet with a slump in tourism, Deadwood is living up to its name. In order to stay alive, some say the town that helped spawn a popular cable series needs a strong shot of something new.

"All destinations need to evolve over time, even those that that wish to remain the same," said Alan Fyall, a professor in the Rosen College of Hospitality Management at the University of Central Florida in Orlando.

"Changes may be very subtle and not necessarily expensive, but a destination and brand 'refresh' helps maintain the status quo as well as attract new markets," he said.

The summertime reenactments of Wild West shootouts on Deadwood's Main Street are purely theatrical. However, the money tourists spend in three blocks of shops, restaurants, hotels and particularly casinos, is very real.

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Moving beyond gaming

Since November, 1989 — the year that Deadwood joined Las Vegas and Atlantic City as a cohort of then U.S. cities with legal non-reservation gaming — more than $18 billion has been wagered in the town. That activity has generated millions of dollars in tax proceeds to restore historic buildings in Deadwood, and to promote tourism statewide.

Despite the addition of keno, craps and roulette this past summer, however, Deadwood is no longer confident of its winning hand. Recently, state data showed the city's gaming revenues have plateaued, prompting some officials to suggest the town has to adapt to a more competitive landscape.

"Gaming is now ubiquitous nationwide, and Deadwood can't just rely on gambling or its Western culture anymore," South Dakota Gov. Dennis Daugaard told CNBC in a recent interview. "They need something else to bring in tourists for the first time and to bring them back."

On that score, Deadwood's Revitalization Committee recently commissioned a 96-page action plan that contains recommendations on how the town can capitalize on its history and place in popular culture.

Deadwood's popularity is at least partly attributed to HBO's three-season-long "Deadwood" TV series (which was canceled in 2006 but is still popular online) and attractions such as Kevin Costner's memorabilia-filled Midnight Star casino and restaurant on Main Street.

"The town has so many things going for it beyond gaming," said Roger Brooks, whose tourism consulting firm put together the revitalization report. "Plus, with a name like Deadwood, it doesn't get much better when it comes to being able to stand out."

Brooks would like Deadwood's Wild West-themed streets to be more authentic and pedestrian friendly. He's also urged the town to create a central plaza where regular entertainment and activities can take place. Meanwhile, the town's business community is grabbing the proverbial bull by the horns and rallying around those recommendations.

"We developed 55 action items from the report, and have been busily working on making them happen," said Mike Rodman, executive director of the Deadwood Gaming Association and a member of the Revitalization Committee.

Currently, the town is building a new welcome center, and in town more technology-friendly parking meters now accept credit cards and cell-phone payments.

"We also cleaned up our signage, put up baskets of flowers on the street lights and wrapped some electrical boxes to make them less visible," said Rodman.

Next on the list: finishing plans for two downtown plazas and raising the $8.8 million needed to move that part of the plan forward, said Rodman.


Wall Drug thrives without change

Deadwood's stagnation contrasts sharply with another iconic South Dakota landmark, Wall Drug. Oddly enough, Wall Drug credits it success to remaining pretty much the same.

Now a block-long oasis of kitsch visited annually by more than a million visitors traveling along a lonely stretch of Interstate 90, Wall Drug got its start in the 1930s. At that time, the owners of a struggling drug store put up highway signs advertising free ice water, leading thirsty Depression-era travelers to pull over for refreshments and other small items while they were there.

Over the years, Wall Drug evolved into one of the country's most famous pit stops. The road trip hub added a cafe, restaurant, art gallery and shops that sell everything from postcards and T-shirts to jackalope hunting permits, turquoise jewelry and high-end cowboy boots and western wear.

Dozens of free, photo-friendly attractions were built, as well, including a giant jackalope, a replica of Mt. Rushmore, a shooting gallery arcade and a giant Tyrannosaurus rex that roars to life every 15 minutes.

The ice water is still free, the coffee is just 5 cents and many grandparents make a point of reliving their childhood Wall Drug experience with their grandchildren.

"My father and my grandparents wanted Wall Drug to be someplace where people could stop, have a nice meal and enjoy themselves without spending much money if they didn't want to," said Rick Hustead, current Wall Drug chairman and the oldest grandson of founders Dorothy and Ted Hustead.

"Our guests spend on average of two and a half hours here and 50 percent of our business is repeat customers, so we must be doing something right," Hustead added.

Clarification: This story has been updated to reflect the name of South Dakota's historic town is Wall Drug.

— Harriet Baskas is the author of seven books, including "Hidden Treasures: What Museums Can't or Won't Show You," and the Stuck at the Airport blog. Follow her on Twitter at @hbaskas . Follow Road Warrior at @CNBCtravel.