Hard Rock Hotel Will Improve Club, Rooms

Officials from the Hard Rock Hotel said Thursday their company could spend between $16 million to $25 million this year toward several planned or proposed improvements at its signature Las Vegas resort.

During a conference call to discuss the company's fourth-quarter and year-end 2003 fiscal performance, Hard Rock President Kevin Kelley and Chief Financial Officer Jim Bowen said work is under way to revamp the former Baby's nightclub space and freshen rooms in the 9-year-old property.

Even more work could follow by year's end, they added.

"We're going to continuously improve our property and the amenities inside it," Kelley said. "We're sticking to our guns and really doing a much better job of ... understanding our business and knowing where to spend our money to get the highest and best returns."

To that end, patrons will see more construction this year should the company decide to begin an oft-delayed expansion of its meeting area, push forward with plans for a second hotel tower, or build both projects, Bowen said.

"We've delayed construction (of the meeting facility) because we're trying to evaluate whether we want to add another tower at the same time, but that decision hasn't been made yet," Bowen said. "Those projects are still under evaluation."

Even if the company fails to proceed with those large-scale plans, many changes will take place at the northwest corner of Harmon Avenue and Paradise Road. Construction could begin as early as next week on the new $6.5 million underground nightclub, which Kelley said "is going to be something to see."

The as-yet unnamed club will feature bottle service and 32 booths, or four times more than were offered at Baby's, Kelley said. In addition, the new club will have 12 drink stations (vs. four at Baby's) to speed customer service.

Many of the property's nearly 650 hotel rooms could also soon have a new look, Bowen said. The company has already purchased minibars for each room, but so far those devices have not been installed until Hard Rock executives decide whether they'll remodel certain in-room furnishings, including the potential addition of large, flat-screen television sets.

"With improvements to the rooms ... we still believe there is some upside in our pricing strategies without sacrificing our occupancy," Kelley said. So far this year, Bowen said Hard Rock's average daily rate has been "significantly higher" than in 2002 though occupancy has been slightly down. He did not provide specific figures.

The company also hopes to drive room traffic through its revamped Web site, www.hardrockhotel.com, and reduce its reliance on room wholesalers, Bowen said.

Other recent changes include improved visibility near the hotel's pool, as well as a 280-space expansion of its existing parking garage that opened in January.

The Hard Rock Hotel is battling a potential fine of up to $300,000 from the Nevada Gaming Control Board, which claims the company failed to exercise proper discretion in its sexually suggestive advertising. Despite that challenge, Kelley said Thursday the company "won't waver" from its efforts to provide events and advertising that appeal to younger patrons.

In last year's fourth quarter, Hard Rock narrowed its losses to approximately $395,000, a return far better than the more than $4.64 million in losses reported during the same quarter of 2002.

For the year, the company's net income was $2.12 million, down from the previous year's $2.5 million total.