Gaming Strategy
Featured Stories
Legal News Financial News Casino Opening and Remodeling News Gaming Industry Executives Author Home Author Archives Search Articles Subscribe
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!
Related Links
Related News
Recent Articles
Arnold M. Knightly

Planet Hollywood narrows loss even during renovation

2 April 2008

LAS VEGAS, Nevada -- By the end of 2007, the dust had settled on the three-year, $214 million transformation of Planet Hollywood Resort from the financially troubled Aladdin.

The more modern-looking resort on the Strip managed to trim its loss last year despite the renovation.

"Oh-seven was the finish, the clean-out of the Aladdin," Robert Earl, co-owner of the resort, said Monday.

In a Friday filing with the Securities and Exchange Commission, the property said it narrowed its net loss by 21.6 percent to $75 million in 2007 from $95.7 million in 2006.

Net revenue fell 3.6 percent to $257.6 million from $267.1 million in 2006.

Property cash flow ended the year at a loss of $4.1 million after accounting for operations, investing and financing activities.

In 2006, the company finished with a cash-flow loss of $15.8 million

The improvement came even though many hotel rooms were unavailable because of renovations, many restaurants and bars were shut down and some entrances to the property were closed for construction during the year.

OpBiz, a partnership between restaurateur Earl, private equity firm Bay Harbour Management and Starwood Hotels & Resorts Worldwide, owns the Strip hotel-casino.

Earl said he has continually emphasized that this will be the year the Planet Hollywood Resort brand gets "fully established."

"This is the year when we do a diverse amount of events, all to get the brand known as a resort and casino," he said.

Part of that campaign has involved the property hosting two movie premieres this year. It will also premiere Al Pacino's new film "88 Minutes" on April 16.

The property also hosted the nationally televised Miss America pageant in January and will host Miss USA on April 11. The resort will also co-promote its first boxing match April 19, which will be held at the Thomas & Mack Center and shown on Home Box Office.

In its earnings report, the company said casino revenues, which account for 44.4 percent of the property's revenues for the year, rose 9 percent to $114.2 million from $104.8 million in 2006. The increase helps reverse a 19.4 decrease from $130 million between 2005 and 2006.

Hotel revenues fell 3.9 percent to $106.8 million from $111 million. The decline was due to the renovation of nearly 1,300 rooms during the year.

Average daily room rates increased 4.7 percent to $128 per night with the hotel running 97 percent occupancy of available rooms.

Food-and-beverage revenues fell 18.1 percent to $48.9 million from $59.7 million. However, the company cut costs in the department by 20 percent largely by shifting from property-owned restaurants to a leasing model.