Cherokee casino banking on $200M hotel, convention expansion

Walking through the palatial Harrah's Cherokee Casino, awe is a common reaction.

Whether it's the two-story fountain cascading in the lobby or the suspended lights on cables that are supposed to resemble dew on a spider's web, the place is built to impress with visual overload. And it's going to get more impressive. Tribal leaders for the Eastern Band of Cherokee Indians earlier this month approved moving forward with a $200 million plan to add 600-800 more hotel rooms in another tower, as well as 100,000 square feet of convention space.

But the casino wasn't always this impressive. Its modern era began 20 years ago, when the Eastern Band opened its 175,000-square-foot, $83 million casino, which seemed pretty awe-inspiring itself at the time.

Before that? Well, the casino of the mid-1990s was a little more humble.

"it just felt like an old metal building, and it had these big silver dollars you had to drop in the machines," said Gary Durkee, an Anderson, South Carolina resident who was taking a break from the craps table during a recent stay at the casino and hotel. "Then it kind of expanded over to here, and then it expanded from digital to live dealers in 2012. That’s probably when we started coming a little more."

Durkee has had plenty of company. Among those expansions are three hotel towers adjoining the casino that provide 1,100 rooms. That sounds like a lot, but the hotel maintains 99 percent occupancy year-round.

In short, they can't accommodate all the people who want to stay and gamble at the casino's 170 tables with live dealers or plug coins into the 3,600 digital slot machines. And that doesn't even address missed convention business as the resort has only 15,000 square feet of convention space.

Leeann Bridges, regional vice president of marketing at Harrah's, said the casino has seen double-digit growth each of the last four years in convention business, and they've had to focus it on a Monday-Thursday time period to allow adequate room for weekend gamblers.

"We can see how much business we’ve denied during that period," Bridges said, adding that they've studied other facilities and regional convention sales in general. "It looked like we've denied as much business as we’ve taken on the convention side."

While the casino has not set a firm timetable on the project, Bridges said, "The sooner the better, obviously."

Tentatively, the process of requesting proposals and selecting an architect likely will take eight or nine months, followed by a 24-month construction period.

The additional hotel tower and convention space will translate into more jobs, Bridges said, although she couldn't peg a specific number yet. The casino employs 2,600 people in Cherokee, and another tribe-owned casino in Murphy, Harrah's Cherokee Valley River Casino & Hotel, which opened in 2013, employs 1,000.

Murphy's winning bet: New casino lifts region

The addition will bring jobs across the board, from housekeepers to card dealers, said Steve Morse, an economist and director of the Hospitality and Tourism Program in the College of Business at Western Carolina University.

"There's a misconception that many of those jobs are minimum wage and minimum skill, but when you look at what people are paid out there and the benefits package, there are a lot of pretty good career jobs there," Morse said. "You've got a lot of moms and dads making good livings."

Bridges said table dealers, slot hosts and cocktail servers — between base pay and tips — can earn an average of $50,000 a year. Also, the benefits package "accounts for 50 percent of the average salary," between the 401K, retirement plan, health and dental insurance and other perks.

Tapping into convention market

Morse said the tribe's timing on expanding the convention business couldn't be better.

"They're going to go after more conferences and meetings, and there's a large market for that in the Southeast — that's what they're going to capitalize on," Morse said. "People love to sleep, meet and eat under the same roof. Once they get somewhere, they don’t want to drive."

They're also looking more and more to bring their families along, and Harrah's is taking steps to appeal to families. The casino and hotel opened indoor and outdoor pools in 2014, and a new two-story, 24-lane bowling facility adjacent to the casino will open this fall.

Also, Morse points out that Harrah's is located near the entrance to a nationally known family attraction, the Great Smoky Mountains National Park, the nation's most visited park with 11.3 million visitors annually. As gambling is fairly recession-proof, Morse doesn't foresee any significant financial problems for the casino, which he notes has taken a high-end approach to building and expansion that keeps customers coming back.

Bridges said the casino will seek financing for the $200-million hotel and convention addition.

Neither the casino nor the tribe releases information about casino revenues, but judging by the steady growth over the past 20 years, it's clearly doing well.

"There've really been minimal times over the past 20 years when we haven't had an expansion or a new building going on," Bridges said, referencing the hotel towers, which include a 21-story building, the expansion of the gaming floor and the bowling and entertainment complex. "Really, over the past 20 years, it's easier to count up the number of months when we didn’t have some kind of expansion going on than the months we did."

Bridges, who's been with the casino for 16 years and in her current position for 14, said the casino saw double-digit growth every year leading up to the Great Recession of 2008-09, and then 3-5 percent annual growth every year since then. It draws from about a 200-mile radius, and about "99 percent" of its customers drive in, Bridges said, with Atlanta, Charlotte, Knoxville and Upstate South Carolina being particularly fertile markets.

The casino revenues have clearly been a boon for the tribe, which has more than 13,000 enrolled members. Every year, each member gets a payout from the revenues, which last year came to $11,700 per person, up from $7,347 in 2010, right after the recession.

Casino funds have also allowed the tribe to build a new hospital, courthouse and high school, and renovate its museum, among other projects.

Harrah's manages the casino, and the Eastern Band owns it. They split profits but typically do not disclose the details of the arrangement.

The economic impact on the Cherokee, said Bridges, herself an enrolled member, has been "like night and day."

Durkee, who runs two hamburger restaurants in South Carolina, appreciates the business acumen of Harrah's and the tribe.

"I think they way they’ve expanded is kind of genius," said Durkee, 48. "It’s kind of the way we’re trying to expand our business — you get something paid for, start being profitable and then you start adding on."

'The devil's playhouse?'

Decades ago, the tribe went through a long, sometimes contentious process to get state permission to allow the casino, and the debate over gambling grew heated at times. While the venom has lessened, not everyone is a fan of Harrah's.

The Rev. Charles Ball, pastor at Straight Fork Baptist Church on the Cherokee reservation, also called the Qualla Boundary, opposed the casino two decades ago and has never wavered from that position.

"It’s just been the devil’s playhouse," Ball said. "It’s wrong, in every way. It brings in all kind of people, not godly people, no way. It’s a downfall, I think, for the reservation."

Ball, 76, acknowledges that the casino has created thousands of jobs and is an economic engine for the far western part of North Carolina, but he still thinks it's not worth the problems that come with gambling.

"You see people that go out there and you know they don’t have very much, and they'll spend every dime they got," Ball said. "I won't support them in any way."

Bridges and other casino officials are quick to point out that Harrah's offers problem gambling support lines, and they stress they do not want people creating financial hardship for themselves.

Taking a break from the sensory overload of hundreds of spinning, chirping video gaming machines, 62-year-old Grady Carpenter of Johnson City, Tennessee, explained why he and his wife, Brenda, make the trip over the mountain to Harrah's two or three times a month.

"To me, I guess this is my therapy; it's my relaxation," said Carpenter, who has owned an auto repair business for 40 years.

The Carpenters bring a set amount of money and allot a certain amount for the machines each day.

"If it’s gone, I quit," Grady Carpenter said. "I don’t go to the ATM. I quit. A lot of people don’t have the willpower to quit, but I think the majority of people come here don’t get carried away. I haven't seen anyone who's lost their house or anything like that."

When he gets on a losing streak, Carpenter goes back to the hotel room or one of the resort's restaurants. He "holds his own," losing sometimes, winning others.

"I got down some tonight, and I was getting a little aggravated — and this is $1,100 I just hit," Carpenter said, showing the voucher.

For Durkee, hitting the craps tables or playing poker or blackjack is entertainment. He tithes at church, but he also budgets for his trips to the casino, which he and his wife make once a month or so, maybe more often in the warm months.

"It’s bankroll management," Durkee said. "If you come up here and spend your rent money, you’re going to have issues. We’ll come up here and we’ll have anywhere from $500 to $5,000, just depending on how long we're going to stay. We also probably spend a lot on the property."

They eat at the restaurants, shop in the gifts shops, hit the pool and play nearby Sequoyah National Golf Course, also owned by the tribe. Asked if he breaks even, Durkee thought for a minute.

"I’m usually, at the end of the year, within $10,000 either way — sometimes it’s positive, sometimes it's negative," he said. "But for what you get, you get the concert tickets, you got the nice suites up there, food provided, drinks provided. They roll out the red carpet."

About Harrah's Cherokee Casino Resort

An enterprise of the Eastern Band of the Cherokee Indians, Harrah's Cherokee Casino Resort is located in the Great Smoky Mountains of Western North Carolina. The casino has 150,000 square feet of gaming space, and offers traditional table games such as black jack, roulette and craps. The property also features more than 1,100 hotel rooms, 10 restaurants, the Essence Lounge, an 18,000-square-foot spa and seven retail shops. In addition to the 56-acre property, guests have access to the Eastern Band of the Cherokee Nation-owned Sequoyah National Golf Club. The tribe also owns Harrah's Cherokee Valley River Casino & Hotel near Murphy, which features 50,000 square feet of gaming space with over 1,000 slot games and 70 traditional table games, the Food Market and a 300-room, full-service hotel.

Harrah's Cherokee Casino & Resort timeline

1997 — Harrah's Cherokee Casino opens Nov. 13 to a crowd of thousands.

2002 — 16-story hotel opens, and gaming floor expansion to 80,000 square feet is completed.

2005 — A second, 16-story hotel tower opens. 

2008 — $650 million expansion is approved by Eastern Band of Cherokee Indians Tribal Council, with the project including a 21-story hotel tower, additional food venues, retail space, spa, parking garages, central energy plant, and new entertainment venue.

2009 — Alcohol sales begin.

2010 — The third hotel tower opens, bringing the room count to 1,108.

2012 — Traditional card games are introduced with cards, dice and live dealers.

2012 — The Resort expansion is completed and property name changes to Harrah's Cherokee Casino Resort.

2013 — Harrah's Cherokee Valley River Casino & Hotel, the Resort's sister property, breaks ground in Murphy.

2014 — The Pools open at Harrah's Cherokee Casino Resort, providing both indoor and outdoor pools, a bar and cabana service.

2015 — Harrah's Cherokee Valley River Casino & Hotel opens Sept. 28.

2016 — Harrah's Cherokee Casino Resort breaks ground on the Bowling Entertainment Center Complex, slated to open in fall of 2017.

2017 — Tribal Council approves moving forward with a $200 million plan to add 600-800 hotels rooms and 100,000 square feet of convention space.

Source: Harrah's Cherokee Casino & Resort