Cashing in

In 2019, a state study forecast that if the General Assembly allowed five casinos to operate in five economically disadvantaged Virginia cities — Bristol, Danville, Norfolk, Portsmouth and Richmond — that one-third of the revenue generated would stem from out-of-state visitors.

In other words, if you build it, casino backers sang out to the commonwealth’s legislators, they will come.

In 2020, local voters overwhelmingly voted to bring casinos to Bristol, Danville, Portsmouth and Norfolk. Richmond referendum voters twice rejected bringing a casino to their city, and now it looks like that casino opportunity may go to Petersburg. Meanwhile, a proposed Norfolk casino has been delayed and may wind up with the city choosing a different operator. However, the three casinos open so far are doing brisk business in Bristol, Danville and Portsmouth.

Bristol’s casino opened in a temporary location in July 2022, and made $157 million in net gaming revenues in its first year of operation. Its replacement, a permanent, $500 million-plus Hard Rock Hotel & Casino, is slated to open its casino floor in July, with the 303-room hotel and indoor entertainment venue following in the fall, according to Allie Evangelista, president of Hard Rock Hotel & Casino Bristol.

Danville’s Caesars Virginia casino followed, opening a temporary location in May 2023, racking up about $145 million during its first six months. Its permanent location, which will cost more than $650 million, is slated to open late this year and will include a 320-room hotel and over 50,000 square feet of meeting and convention space.

Virginia’s first permanent casino, the $340 million Rivers Casino Portsmouth, opened in January 2023 and made almost $250 million in gaming revenue during its first year. In addition to gaming, it offers restaurants, bars and more than 25,000 square feet of event space.

So, the question is, have the casinos delivered on their tourism promises? Are crowds of gamblers traveling from other towns and states to delight in the thrill of roulette, the rush of slots?

The short answer is, you bet. The longer answer is that tracking Virginia’s casino tourism traffic isn’t the easiest endeavor and remains a work in progress.

‘Pretty accurate’

The Virginia Tourism Corp., which promotes the state’s tourism industry, purchases “data insights” on casino visitation from Arrivalist, a Colorado-based location intelligence platform for the travel industry that collects location data from millions of mobile devices like smartphones.

It’s a helpful tool, but it’s also still “a little bit early” to build a full picture of casino visitation trends in the commonwealth, says Dan Roberts, VTC’s vice president of research and strategy.

To be identified as tourists, casino visitors must have traveled with their devices at least 40 miles to their destinations, explains Balakumar Raghuraman, vice president of analytics for Arrivalist’s parent company, AirDNA. Devices associated with commuter travel trends were excluded from consideration.

At Rivers Casino Portsmouth, most visitors’ devices (15.8%), as expected, originated from the Hampton Roads region last year. But the top 10 markets of origin last year also included tourists traveling from Raleigh and Durham, North Carolina (13%); Washington, D.C. (9.8%); Richmond and Petersburg (9%); and even areas as far away as Baltimore (3.2%) and New York (5.2%).

For Bristol’s temporary Hard Rock casino, visitors from the Roanoke and Lynchburg regions accounted for 26% of devices in 2023, followed by Knoxville, Tennessee (15%), and the Tri-Cities region (10%). Visitors also hailed from areas in southern West Virginia like the Bluefield region (5%), but Atlanta (3%) also made the top 10 list of places from which tourists traveled to the Bristol casino.

Of the tourists tracked at Danville’s temporary Caesars Virginia casino last year, most visitors (33.4%) came from North Carolina’s Research Triangle area, encompassing Raleigh and Durham, followed by tourists from Roanoke and Lynchburg (15.4%); and North Carolina’s Piedmont Triad region of Greensboro, Winston-Salem and High Point (14.2%). Devices originating from Los Angeles (2.6%) and West Palm Beach/Fort Pierce, Florida (1.9%), also made the list.

Mobile location insights, like those from Arrivalist, are commonly used by tourism officials to ensure they are delivering the most successful marketing messages to reach certain audiences, according to Candace Fitch, the Howard Feiertag Endowed Professor of Practice at Virginia Tech’s Pamplin School of Business, “They want to target those really precious marketing dollars to a very specific target market [to] make sure they’re reaching the right people,” she says.

As far as the accuracy of mobile device tracking data, “it’s hard to evaluate the reliability of it,” says Michael Maness, assistant professor of civil and environmental engineering at the University of South Florida and an affiliated faculty member with the university’s Center for Urban Transportation Research. He added that he hasn’t seen any studies comparing data compiled from mobile locations with traditional sources like casino-tracked visitor data.

Nevertheless, spokesman Raghuraman says, Arrivalist’s data is “pretty accurate.” He points out that Arrivalist compares its lodging data information to numbers compiled by Smith Travel Research, which processes performance data from hotels. “We usually see more than 95% or 96% correlation, which is big when you’re talking about two completely different datasets.”

Rules of attraction

Casinos are “amazing” for attracting tourists, Fitch says. After all, visitors are coming to gamble, she says, and “that’s a big draw for people because you can’t have access to that everywhere in the United States.”

About two dozen states offer commercial casino facilities, according to the American Gaming Association’s 2023 State of the States report. Among Virginia’s bordering neighbors, casinos are legal in Maryland, North Carolina and West Virginia, but not in Tennessee, Kentucky or Washington, D.C.

Casinos, Fitch points out, also bring in big-name entertainers and tend to attract development of other tourist-appealing attractions like restaurants and retail opportunities that wouldn’t normally open in smaller markets. “Big chefs like to be in casinos,” she says.

Bob McNab, chair of the economics department at Old Dominion University and director of ODU’s Dragas Center for Economic Analysis and Policy, has a less rosy view of how casinos will impact tourism in Virginia.

“Is this really an inflection point for Virginia tourism?” he says. “One would probably argue it’s not at this point in time.”

McNab speculates that most individuals who visit the state’s casinos are day visitors.

“They’re not destination casinos, right?” McNab says of the commonwealth’s three operating casinos. “They’re not a Macau. They’re not a Las Vegas. They’re not an Atlantic City.”

Evangelista with Hard Rock Hotel & Casino Bristol says casinos usually track visitor data with loyalty rewards programs like Hard Rock’s Unity, Caesars Rewards, or the Rush Rewards program at Rivers Casino Portsmouth.

While Bristol’s temporary casino isn’t an official Hard Rock property, visitors can still use and earn Unity rewards there, according to Evangelista. “And so, when people come to the building, and they actually sign up for a card or they use their card to play, we know how much they [gambled], and we know where they did it from,” she explains.

Bristol’s temporary casino welcomed visitors from all 50 U.S. states during its first six months of operation in 2022, according to Evangelista. Hard Rock would not release specific visitation data for its Bristol casino patrons, but Evangelista says that typically its guests travel from no further than three hours away, with the majority of out-of-state guests hailing from Tennessee and North Carolina.

However, the number of North Carolina visitors fell after Danville’s casino opened in May 2023, Evangelista observes. “Now we see them maybe sharing, you know, coming to visit us a little bit [and] going to visit there as well,” she says. (Caesars Virginia representatives would not comment on tourism trends at the casino.)

As for Rivers Casino in Portsmouth, Roy Corby, the casino’s general manager, provided a statement to Virginia Business magazine noting that more than 2 million guests visited the casino during its first year in business. “Rivers Casino Portsmouth has welcomed guests from all 50 states,” Corby says. “We are pleased with the growing number of out-of-area guests in our first year and expect that trend to continue.”  

Busy as a Bee

Danville, Portsmouth and Bristol have all seen an increase in local lodging taxes since their respective casinos opened. Lodging taxes in Bristol jumped from about $1.28 million in fiscal 2021 to more than $2.08 million in fiscal 2023, while Danville saw a similar increase during the same time period, rising from around $1.59 million to over $2.71 million. Meanwhile, Portsmouth saw a more modest increase, from $897,134 in fiscal 2022 to more than $1 million in fiscal 2023.

Danville City Manager Ken Larking is careful, however, to note that increases in hotel stays in his city may also have been impacted by construction workers coming to work on the permanent Caesars casino and other projects like the White Mill redevelopment.

Caesars frequently puts up Danville guests at local hotels, according to Corrie Bobe, Danville’s economic development and tourism director. “Currently, they’re averaging between 25 to 40 room nights per week when hosting guests,” she says. “So, our assumption is that these are out-of-town guests coming to visit the temporary facility.”

Two Danville boutique hotels are certainly seeing business from visitors to the temporary casino, according to Madison Eades, dual general manager of the Bee Hotel and the Holbrook Hotel, which opened in late 2023. “Holbrook is gaining traction for sure and getting busier,” she says. “The Bee has been busy.”

Eades doesn’t expect traffic at the hotels to slow after Caesars opens its permanent casino and hotel in Danville. After all, Caesars may sell out its own hotel rooms sometimes, Eades points out, and some visitors may also want to visit a boutique hotel instead. “We will still see a lot of guests coming in [who] want a different type of experience,” she says.

Initially, Caesars planned to build 500 hotels rooms in the permanent hotel, but now the facility has downsized the project to 320 rooms. Rising construction costs were likely behind the change, according to Larking. “Just like every business, they need to stay within some kind of a budget,” he says.

The City of Danville hired Alexandria-based RevPAR International, a hospitality industry advisory firm, to prepare a hospitality market study, which will cost about $21,900, according to Larking. The study, which should be completed over the summer, will allow Danville “to better analyze the current demand for hotel rooms as well as the type of hotel rooms that are needed within the market, and then forecast over the next 10 years what additional rooms need to be attracted or constructed,” Bobe says.

Larking hopes the study will draw developers of high-end hotels to the area. “They just don’t build it because you ask,” he says. “You have to actually show them there’s demand.”

Meanwhile, in Portsmouth, Keith Toler, the city’s assistant director for the department of museums and tourism, feels confident Rivers Casino Portsmouth is drawing big numbers of out-of-state and out-of-town tourists.

“We’re seeing people come from the Outer Banks,” he says. “We’re seeing people come from Virginia Beach. They’re doing their weeklong stay, but they’ll take a night and come up to the casino.”

From October to December 2023, more than 20% of Rivers Casino Portsmouth guests were from out-of-state, according to a presentation made at the Virginia Lottery Board’s January meeting.

That percentage stuck with Brian Donahue, Portsmouth’s director of economic development. “I was pleasantly surprised by the visitors that we’ve got coming from outside of Virginia,” he says. “We think it’s been a really impactful and transformative project for the city of Portsmouth and, really, the Hampton Roads region.”