Casinos are Breathing New Life into the City

27 June 2001

By David Waddell

Last Week, Dr. Donald Holecek, Director of Michigan State University's Travel, Tourism and Recreation Resource Center, presented his findings from a recent study on the impact of casinos on the City of Detroit at a Casino Management Association Executive Briefing. The MSU study, which was conducted at a time when only two of the Detroit casinos were open, showed that nearly 20 percent of the visitors are tourists coming from outside the Tri-County (Wayne, Oakland and Macomb) area.

Even more encouraging, the study showed that these casino tourists were overwhelmingly satisfied with their visit. Over 90 percent indicated they were likely to visit Detroit again, and nearly the same percentage (87.5 percent) indicated that they would recommend Detroit to others. "Conservatively," the study estimates that this group of visitors to the area spends $164.5 million a year both inside and outside the casino. Over 50 percent of this group of visitors stayed overnight in a hotel and participated in additional activities such as dining, shopping, going to Tiger games and visiting friends. Dr. Holecek specifically noted that there is an increase in visitors to the Detroit casinos when the Detroit Tigers have a home game. Thus, it is apparent that there truly is a "synergy" in having a wide variety of entertainment options when seeking to attract tourists.

Importantly, a majority of the respondents to the study cited "going to a casino" as the primary purpose of their visit to the City. Detroit Metro Convention & Visitors Bureau President Larry Alexander correctly noted, "those are visitors we may not have had if not for the casino."

The study also reflected that these out-of-town visitors are made up of a diverse group of relatively wealthy individuals. The study showed that over 75 percent had above average annual household incomes, over 60 percent were married, 78 percent had no children under the age of 18 in their households, 32 percent were minorities and 68 percent were white. Thus, it appears that the casinos are attracting just the diversified customer base that Detroit has been trying to lure back to Downtown for years.

The Detroit casinos have clearly had a positive impact on the City as an entertainment destination. Just a few years ago, the anti-gaming voices scoffed at the notion that casinos in Downtown Detroit would draw many out-of-town visitors. Yet, through the persistence of some visionary individuals, the casinos came to fruition.

Last night, five key people who helped bring casinos to the City were presented with awards by the Casino Management Association ("CMA"). Former Greektown Casino investors Dimitrios Papas and Ted Gatzaros, former Detroit Entertainment, L.L.C. investor Herb Struther and Windsor City Mayor Michael Hurst were presented with "Visionary Awards" by the CMA. In choosing the recipients, CMA cited the "vision that resulted in the creation of a new $1.5 billion industry in the Detroit/Windsor area, and the employment of more than 20,000 people." CMA Founding Member Robert Russell noted "these business and governmental leaders were the first to recognize the significant positive impact that casinos could have on tourism in the region."

Also honored last night was Glenn Schaeffer, President and CEO of Mandalay Resort Group, a key investor in the Motor City Casino, who received the Industry Leadership Award. Mr. Schaeffer delivered the keynote speech praising the benefits of education provided by organizations like the CMA on this emerging industry. The CMA also recognized 67 people who completed the Detroit/Windsor Chapter's first certification series.

Although casinos are not the complete answer to revitalizing a city, they can play a key role. By bringing visitors who otherwise would not come into the City, they provide a window of opportunity for the positive news to spread. The most encouraging statistic in the MSU study to me is that 90 percent of the out-of-area visitors were satisfied with their visit and would encourage their friends to come visit. That base of support will provide a strong foundation for the rebirth of the region as a tourism destination.