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Best of Chris Sieroty

Gaming Guru

Chris Sieroty
 

Cosmopolitan quarterly loss narrows; casino revenues jump 96.7 percent

11 November 2013

By Chris Sieroty

LAS VEGAS -- The Cosmopolitan of Las Vegas reported a third-quarter loss Friday, but the Strip resort continues to inch toward profitability as casino revenues almost doubled year-over-year. The $3.9 billion Strip resort said it lost $19.4 million in the three months ended Sept. 30, compared with a loss of $34.3 million in the same period a year earlier.

Casino revenues continued to trail food, beverage and hotel revenue. But, the $44.3 million in casino revenues, was up 96.9 percent from the $22.5 million posted in the third quarter of 2012. The company attributed the increase to its table hold percentage of 16.1 percent, which easily surpassed its expected range of 10 percent to 14 percent.

Table game hold for the third quarter of 2012 was 4.4 percent, The Cosmopolitan’s parent company, Nevada Property 1 LLC , said in a quarterly earnings report. The Cosmopolitan operates a 110,000 square-foot casino with 1,374 slot machines and 101 table games.

“We also continue to focus our efforts on increasing the volume of slot play through leveraging our unique Identity membership program, building our database of slot customers and expanding our alliance program,” the company said.

The Cosmopolitan is expanding its table game offerings with the expansion of the Bond Bar near the property’s northeast Strip entrance. The project is expected to be completed by December.

The Cosmopolitan will open its multiuse center named The Chelsea on Dec. 31, while its new 23,000-square-foot combination restaurant, bar, club and show named Rose.Rabbit.Lie is also expected to open by year’s end.

The Cosmopolitan’s third-quarter hotel revenue grew 11.7 percent to $66.8 million from $59.8 million a year earlier, as the average daily room rate jumped quarter-over-quarter to $268 from $257.

The quarterly occupancy rate was 91.5 percent, up from 85.7 percent.

Third-quarter revenue in the hotel-casino’s food and beverage operations declined 1.3 percent to $81.3 million from $82.4 million a year earlier.

Entertainment, retail and other revenues rose 0.5 percent to $8.86 million, from $8.81 million a year earlier.

Net revenues for the third quarter were $170 million, up 17 percent from $145.3 million a year earlier.

The Cosmopolitan sits on 8.7 acres on the Strip between Bellagio and CityCenter.

As of Sept. 30, Nevada Property 1’s loan from Deutsche Bank was $3.47 billion, down from $3.53 billion last year. The Cosmopolitan’s quarterly report with the Securities and Exchange Commission didn’t include any updates about contract negotiations with the Culinary union.

Negotiations have stalled between the Culinary and The Cosmopolitan.

Both sides have been unable to agree on job security, health care and wages. Some 120 union workers were arrested on Nov. 1 during a protest on the Strip that later entered the hotel-casino.