Hard Rock expects its casinos, hotels, restaurants to take a year to recover after they reopen
- "There's going to be a real challenge, especially here in the United States, as far as ramping the business back up," Hard Rock's chairman, Jim Allen, said Wednesday.
- "We're planning on that taking a year," Allen added in a CNBC interview.
- Allen pointed to a 12% occupancy rate at the reopened Hard Rock Hotel Shenzhen as an example of the tough road ahead in other parts of the world.
Hard Rock International Chairman Jim Allen told CNBC on Wednesday he does not see a quick return to robust business after its coronavirus-closed casinos, hotels and restaurants reopen.
"There's going to be a real challenge, especially here in the United States, as far as ramping the business back up. We're planning on that taking a year," said Allen, CEO of the Seminole Tribe of Florida's gaming company, which bought the Hard Rock brand in 2007.
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Allen said that since Hard Rock has properties all over the world, including China, the company has had visibility from the beginning on the arc of the coronavirus, which originated in the Chinese city of Wuhan late last year. The curve of reported infections in China started to flatten in March, and many businesses there have reopened, including one of Hard Rock's premier mainland locations.
"We reopened the Shenzhen Hotel, obviously [in] a global city in China. Beautiful property. Occupancy is right now at 12%. We've been reopen for a good 3½, almost four weeks," he said, citing the Shenzhen property as an example of the tough road ahead that other parts of the world may face in restarting their businesses.
Allen said that tourism, which has been decimated by the Covid-19 pandemic, supports the Hard Rock Hotel Shenzhen as well as other international properties. "If you look at the Hard Rock Cafe in Times Square [in New York City], a restaurant that does $50 million in actual sales, that's all tourism. ... London is tourism."
While Atlantic City in New Jersey is largely a regional clientele, Allen points out that it's in the New York area, which is the epicenter of the outbreak in the U.S. "We're very concerned about that business as we try to navigate through the summer, which is traditionally the time of year when they have their most profitable months."
However, Allen said the most profitable part of his business comes from casinos in Florida, which is "more of a regional business" that people can get to by car instead of hopping on a plane.
"While we see a ramp up, when we see the beaches in Jacksonville as crowded as they were, that seems like that's kind of exciting," he said. "But I think that's just the initial get-out-of-the-house [push]," he added, stressing that generating sustained business activity is not going to happen quickly.
Florida is among the states run by Republican governors that are starting to ease coronavirus mitigation orders as the new daily infection rate in the U.S. trends lower. However, many health experts and business leaders are warning that such moves may be premature in the absence of widespread testing. President Donald Trump has been lending his voice to protests in states run by Democratic governors who have been reluctant to start reopening their economies.
— The Associated Press contributed to this report.