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Chris Jones

Club Crowd Gives Hard Rock Quarter to Crow About

4 May 2005

The parent company of the Hard Rock Hotel said Tuesday the hip off-Strip hangout enjoyed a record first quarter thanks to strong casino table play, robust banquet sales and crowds of revelers who flocked to its Body English nightclub.

In the three months ended March 31, Las Vegas-based Hard Rock Hotel Inc. took in more than $4.4 million in profits, a marked turnaround from the prior year's first-quarter loss of more than $1.25 million. Advertisement

Cash flow -- commonly defined as earnings before interest, taxes, depreciation and amortization -- improved to $12.2 million from $6.45 million a year ago, while net revenue grew to $42.2 million from $34.5 million in last year's first quarter.

Peter Morton, Hard Rock's chairman and chief executive officer, credited much of the turnaround to the presence of Body English, a popular underground night spot that opened in May 2004.

"Nightclub operations have surpassed all expectations and have heightened the Hard Rock's reputation as the hippest casino in Las Vegas," Morton said in a statement.

That nightclub space was closed for construction during two months of last year's first quarter, Chief Financial Officer Jim Bowen said Tuesday.

In addition, Body English has become two to three times more profitable than its predecessor, Baby's, Bowen added.

Food and beverage revenue, which also includes the hotel-casino's lucrative banquet division, increased from $11.3 million a year ago to $15.5 million in this year's first quarter.

The company also benefited from better luck in the casino. While table games drop increased by less than 1 percent to $81.3 million, casino win surged by 28 percent to nearly $11.4 million thanks to a 3 point improvement in hold percentage.

Overall, the casino's 88 table games produced a daily win average of $1,436, up from the $1,050 daily average the casino's 93 tables produced a year ago.

Slot play was also better in this year's first quarter. Though handle was up less than 2 percent to $90 million, slot win improved by 9 percent to $4.56 million. Slot hold percentage jumped from 4.8 percent to 5.1 percent resulting in an average daily slot win of $92, up $8 from a year ago.

Bowen said Hard Rock management made no significant changes to its casino operations versus 2004.

The average daily rate paid for a hotel room in the quarter was $164, up from $152. Despite that cost increase, hotel occupancy rates also improved from 91.6 percent last year to $93.4 percent.

Hard Rock's original Las Vegas campus opened March 10, 1995, but Morton was in town Saturday to reveal details of a planned $1 billion expansion along Harmon Avenue west of Paradise Road.

Plans call for 1,200 condominium units divided among four high-rise towers; 738 condo-hotel rooms; 32 poolside bungalows; a larger concert venue; several restaurants; and a rooftop lounge.

"We are primed for expansion and are enthusiastic about the development of the adjoining 24 acres," Morton said Tuesday.

Hard Rock is also planning a $300 million hotel-casino near San Diego in association with the Pauma Band of Mission Indians.

The company has scheduled a conference call for 11 a.m. Thursday to discuss its quarterly performance.

Club Crowd Gives Hard Rock Quarter to Crow About is republished from