VEGAS INC Magazine - Latest Las Vegas business news, features and commentaries about gaming, tourism, real estate and more
Issue link: http://www.ifoldsflip.com/i/32189
IN BUSINESS THE ECONOMY REMODELING HELPS REVIVE TROPICANA’S SAGGING EARNINGS By Steve Green senior staff writer Tropicana Las Vegas Hotel and Casino Inc. reported a smaller first-quarter loss as business picked up thanks to the completion of remodeling work. The company lost $9 million, down from more than $9.9 million in the year- ago quarter. Net revenue grew 28 percent to nearly $16.7 million—growth the company attributed to the completion of a remodeling of its casino, renovation of more than 1,300 rooms and suites, and the opening of Café Nikki. The company said casino revenue of $7.2 million was up 12 percent, food and beverage revenue soared 51 percent to $3.9 million, and room revenue increased 51 percent to $6.6 million. The hotel said the average daily room rate of $61 was up from $54 while occupancy of 77 percent was up from 68 percent. Business is expected to pick up further when Club Nikki and Nikki Beach THE ECONOMY HEAVY MARKETING BUDGET HAS COSMOPOLITAN IN THE RED By Steve Green senior staff writer The Cosmopolitan lost $56.8 million during its first full quarter of operation as it continued to spend heavily on promotions and marketing to build brand awareness. For the first quarter ended March 31, the resort expensed some $22.5 million for complementary rooms, food, drinks and other services. “We expect this level of promotional allowance expense to continue in the short-term, but decline to industry norms as the initial ramp-up period passes,’’ the Deutsche Bank-owned resort said in its quarterly report. Net revenue totaled $105 million for the resort, which opened Dec. 15 with 1,998 hotel rooms. The results included $31 million in gross gaming revenue and the company POLITICS . . WHITE HOUSE AGAIN CLARIFIES PRESIDENT’S WORDS ON VEGAS By Buck Wargo staff writer Two years ago, President Barack Obama created an uproar in Las Vegas when he told a town-hall audience in Indiana that bankers who accepted federal bailouts shouldn’t be giving out big bonuses, buying corporate jets and taking a trip to Las Vegas or the Super Bowl “on the taxpayers’ dime.” The comment angered Mayor Oscar Goodman, who demanded an apology, especially when financial institutions canceled conventions in town. Then it happened again last year, when Obama in a New Hampshire town-hall meeting said people shouldn’t “blow a bunch of cash in Vegas” when times are tough and they’re saving for 12 PLEDGES: college. Then-Gov. Jim Gibbons accused the president of insulting Las Vegas. Fast forward to this week, when the message from the White House to Las Vegas seemed to be: Let’s try this again. “I think (President Obama’s) message got blown way out of proportion for what he was intending, which is that he wanted people to be responsible for how they were using their money,” said Valerie Jarrett, a senior White House adviser. “People who aren’t receiving subsidies from the federal government who want to spend every penny they have in Las Vegas (in disposal income), that’s terrific,” she said. “It wasn’t in any way intended to be a comment about Las Vegas.” | 23 MAY 2011 | said its focus on hosted table games customers “yielded solid results.’’ Room revenue of $34.4 million was achieved with a high average daily rate of $241, and occupancy of 85.7 percent. That compares with $201 and 86 percent at the nearby Aria resort at CityCenter. Food and beverage revenue was $57.6 million, with the Cosmopolitan citing strong demand in its Marquee nightclub and high restaurant volume. The Cosmopolitan said it sold 15 condominium units for a gain of $7.5 million. As of March 31 there were 199 condominium-hotel units under sales contracts, but given litigation over those deals and market conditions it’s unknown how many sales will close. Despite the loss, Cosmopolitan CEO John Unwin said the property’s numbers exhibited “upward momentum.’’ Club restaurant and nightclub open. The property, spun out of the Tropicana Entertainment Holdings LLC bankruptcy in 2009, said in its quarterly financial report it’s also working on a new design for outdoor signage, as well as a spa funded and operated by an outside party.