Hard Rock International Chairman Jim Allen told CNBC on Friday that the economic toll of the coronavirus pandemic has been acutely felt in the company’s restaurant business.
“The real challenging area is the restaurants. There’s no other way to describe it than it is struggling,” he said on “Closing Bell.” “Frankly, we’re barely open in some markets, and obviously with tremendous reductions in capacity.”
In other segments, there is relatively good news. Revenues in online gaming and retail are outpacing last year’s figures, Allen said.
“One of the great things about the Hard Rock brand is its eclectic nature, to be able to navigate through different business segments. Certainly, this year will not be a good year when we look at the total results,” said Allen, who is also CEO of Seminole Gaming, which is owned by the Seminole Tribe of Florida. The tribe bought the Hard Rock brand in 2007.
The economic damage wrought by the coronavirus has been widespread, and casinos and restaurants have undoubtedly been hit hard. Yet the U.S. economy was showing encouraging signs as the most severe restrictions on businesses were lifted.
Hard Rock International Chairman Jim Allen speaks at a Hard Rock Hotel & Casino Atlantic City Press Conference in Atlantic City, N.J.
Jeff Fusco | AP
But a surge in cases across many states in the South and West have dented the recovery as consumers opt to stay home and governors and local officials reimplement some business restrictions and roll back or pause reopenings.
“There is no doubt that the pandemic directly correlates to what the perception is of our guests in each individual geographic region,” Allen said, adding that differences exist even within a single state.
For example, operations in Tampa have been stronger than in South Florida, he said. In fact, business is up there on a year-over-year basis by about 8% to 9%, he said. However, he tempered that by noting it completed a major expansion at the Seminole Hard Rock Hotel & Casino Tampa last year.
“So certainly on our ROI basis, that’s not exactly the best news,” he said, using a shorthand for return on investment.
Seminole Gaming has instituted strict safety protocols across its reopened casinos, including temperature screenings and mandatory masks, he said.
Allen said he thinks the policies have been well received by guests and pointed to those who are older than 60, in particular, as a barometer.
“We definitely have seen a reduction in trips,” he said. “However, when we do see the guest visit us, frankly trip frequency then does start to increase because I think we’re doing a pretty good job at making them feel comfortable.”
