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Best of Chris Sieroty

Gaming Guru

Chris Sieroty
 

The Cosmopolitan posts smaller third-quarter loss

12 November 2012

LAS VEGAS -- The Cosmopolitan of Las Vegas reported a smaller third-quarter loss Friday as casino revenue continued to trail food, beverage and room revenue at the luxury Strip resort. It was also the third consecutive quarter that the resort reported declining losses.

The Cosmopolitan lost $23.4 million in the first quarter of 2012, compared with $56.8 million last year, and it lost $18.7 million in the second quarter, down significantly from a loss in the year-ago quarter of $54.3 million

In a quarterly earnings report, the property posted a third-quarter loss of $34.3 million, a significant decrease from the $58.4 million reported in the third quarter of last year. Revenue was $145.3 million, up from $126.6 million last year, the resort's owner, Nevada Property 1 LLC, said in an earnings report.

"Our results were negatively affected by a low hold percentage in certain table games," the company said in its earnings report. "The hold percentage was significantly below our expected range of 12 percent to 15 percent."

The $3.9 billion resort, which will celebrate its second birthday on Dec. 15, has struggled to grow its casino business. The Cosmopolitan posted $22.5 million in casino revenue in the third quarter, compared with $23.8 million in the same period last year.

Casino revenues decreased $1.3 million, or 5.5 percent, primarily "due to the performance of our table games," the company said. The resort posted a hold percentage of 7.2 percent in the third quarter, down from 9.1 percent last year.

"Our focus continues to be on supplementing the level of table games play at the property."

The 110,000-square-foot casino offers 1,364 slot machines and 102 table games. In November 2011, the company finished The Talon Club, a 9,600-square-foot high limit gaming area.

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

In terms of nongaming revenues, the Strip resort located between CityCenter and Bellagio took in $82.4 million from food and beverage in the third quarter, compared with $68.9 million last year. Room revenue was $59.8 million, up from $49.2 million, the company said.

Entertainment, retail and other generated $8.8 million, compared with $6.8 million, according to its quarterly filing with the U.S. Securities and Exchange Commission.

The Cosmopolitan reported an average daily room rate of $257 in the third quarter, compared with $233 last year. The hotel posted an occupancy rate of 85.7 percent, up from 83.7 percent, while revenue per-available room stood at $220, compared with $195 in the third quarter of 2011.

As of Sept. 30, the Cosmopolitan had $54.3 million in available cash.