HAUPPAUGE, NY—ICD Publications’ Hotel Business and InspireDesign, in partnership with NEXT Events, have launched virtual conference platform Hot Topics with the debut of “Power Hour: Leadership Lessons.”
The inaugural session featured two C-suite executives, Jim Allen, chairman, Hard Rock International/CEO, Seminole Gaming, and NY Yankees President Randy Levine.
Sponsored by Collectable and Hotel Equities, ICD Hospitality Group Editor-in-Chief Christina Trauthwein and Publisher Allen Rolleri moderated the discussion, which focused on leadership strategies for mega brands during a time of crisis.
Commenting on the long-standing partnership between the two brands, Allen said, “Certainly, we’ve had so many opportunities to be involved with other sports teams… There’s no other brand like the New York Yankees in any sport. We certainly understood the significance of the potential relationship.”
He also pointed to both brands’ ability to withstand challenges. “Hard Rock has been around for 50 years. The Yankees have been around for longer. I think we’ll both be fine,” he said.
Both Allen and Levine have seen their share of troubling times, but nothing quite like the uncertainty and economic turmoil that COVID-19 has spawned.
Both leaders agreed, however, that despite these unforeseen challenges, business has to continue as usual, for guests, for employees and for fans.
“We had to play this year because baseball gives people a sense of normalcy in their lives,” Levine said. “I think people were groping for the feeling of normalcy. It’s not normal that we’re playing without any fans, but when you’re home and watching the games on TV, it’s a sense of normalcy. For three hours, you don’t have to think about the virus, you don’t have to think about politics.”
Restoring hope and keeping brand confidence is one thing, but as two entertainment giants that generate significant revenue through playing games, how do you make up for that loss?
Part of recovering is through leadership and management style to keep brand loyalty in tact.
“As I look backwards, I certainly probably could have done more sooner, but once it hit here in the United States in late February, early March, we made a commitment,” Allen said, recalling COVID-19’s initial hit overseas in China back in January. “Number one, it was going to be about safety of our employees.”
For Hard Rock, Allen added, it was and still is about creating protocols in every restaurant, every hotel, every casino and online, soon coming together as the brand’s “Safe and Sound” program.
“We rewrote more than 500 pages of standard operating procedures and basically turned the business upside down in order to create protocols so that our guests and employees would be safe,” Allen said. “We invested in technology; when you come into our locations, we’re utilizing thermal imaging, we immediately have facial recognition, we’re taking your body temperature and we’re making sure that when you come into the facility, you have a mask, that we have social distancing and all the things that have become part of our language.”
Although Hard Rock’s numbers in theme park locations like Orlando, FL, are south of what they were last year (due to theme park closures and limited occupancy levels) Hard Rock is actually growing its business by double digits in Florida in the gaming division where locations are open.
Levine said that although brands cannot produce in the way they’re used to, creativity is key, which both the Yankees and Hard Rock have proved by looking to technology and online resources for new revenue streams.
“Thanks to technology, we’ve been able to be together, work together, communicate together and drive our business but it’s been tough because most of our revenue is associated with playing games in the stadium,” Levine said.
Levine said that the organization has been losing revenue from ticket sales, suite sales, eating and drinking in the stadium, from signage due to limited number of games on television and that radio contracts have also been affected, but that all hope is not lost.
“There are other ways [to generate revenue]. We sell virtual signage, we find new sponsors that maybe weren’t interested in baseball or the Yankees then but are now. Find a way to reach young people,” Levine said.
Although the Yankees—and baseball as a whole—prides itself on tradition, the team recently completed a deal with video-sharing mobile app TikTok to reach a younger demographic, an ongoing struggle for the sport.
“The idea is to be nimble, flexible and try and alter your strategy and the circumstances that you’re in and not be afraid to fail,” Levine suggested. “It’s easy to just throw in the towel in these times. Our people have risen to the occasion and we try to lead by example.”
Because of the unique nature of the pandemic, it seems everyone is keeping an open mind so that business stays afloat. Allen said that he’s been speaking with officials who in the past have been reluctant to move business online but are now receptive to the possibility.
“I’m talking to governors who refused to have the conversation about sports betting and internet gaming at the end of last year who are now saying, ‘Jim, let’s meet, let’s talk about alternative ways,’” Allen said. “We always knew that the casino industry—the integrated resort—30% of that revenue some time in the next five to 10 years is going to come from online.”
Business models have certainly changed, but how much of that change will be permanent? For both leaders, working from home, social distancing and digital efforts may be here to stay.
“I think the way we consume entertainment is going to be different. I always used to say that the transition from the cable TV model to the streaming model was going to take 10 years; now I think it’s going to take five, especially for young people. [Since] everybody was home, people are consuming entertainment in a different way,” Levine said.
He added that the time spent in quarantine has also given businesses an opportunity to realize different forms of entertainment.
“I think as professional sports merges with mobile, mobile betting and gambling, this has given us an opportunity on how to do it, how to make it exciting, more successful, at least in our business,” Levine said.
Although the fundamentals of the game are unchanging, both brands are figuring out how to reach new and larger audiences.
“I think our hospitality company, Legends Hospitality, which we own with the Dallas Cowboys, has realized how to deliver merchandise and hospitality in a different way,” Levine said. “I think that it’s kind of sped up the strategic analysis that you have to do. I don’t think you can forget everything because with a little luck we will be back to normal, whatever that normal is, but people will feel free going to hotels or casinos or ballparks and feeling good.”
Both Levine and Allen agreed that technology as well as keeping business flexible are the best strategic moves here, especially while maintaining strong, branded partnerships like theirs.
“We have the product but we’re going to need the expertise of somebody like Hard Rock; there is a giant demand for it and we think it will help our demographics because it’ll make the game more interactive,” Levine said. “Today, people play fantasy sports all the time. That’s a nice word for gambling…but it’s the future. I think it’s the future for state and local governments because it’s a giant revenue source they need. It’s really great for all of us in the business because we think it’ll bring in new fans, younger fans and the level of interest will grow.”
Levine noted, however, the danger here is going too fast into this future and forgetting where you came from. The key is keeping tradition alive while also evolving along with consumers.
“You change tactics during a pandemic or a terrorism situation or a hurricane or whatever the horrible event is, but you don’t change your strategy or your brand and what it means, because once you do that, it’s not your brand anymore,” Levine said.
Allen added that people seek out brands that they trust, that are consistent, but that also change with the times to stay current.
“Go to an airport and see if you don’t see someone in a Yankees hat or a Hard Rock shirt; it’s pretty hard to do,” Allen said. “You see our brands out there because people are proud to wear them. Not just because they came to a Hard Rock hotel or casino or café but because they like what it represents.” HB