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Steve Green

Hilton's earnings tumble in second quarter

17 August 2009

LAS VEGAS, Nevada -- The decline in visitation to Las Vegas this spring hurt business at the Las Vegas Hilton, which sustained a loss for the second quarter ended June 30.

The 3,174-room Paradise Road property is owned by affiliates of Los Angeles investment group Colony Capital and other investors.

It lost $10.552 million during the June quarter vs. a profit in the year-ago period of $3.394 million, a regulatory filing showed Thursday.

Revenue declined from $75.5 million to $45.2 million.

The investors led by Colony said casino revenue decreased $8 million, or 32.1 percent, to $16.8 million because of the general economic downturn and "fierce competition."

Room revenue fell by $14.4 million to $17.3 million.

The company said its average daily room rate fell $47 year-over-year while occupied room nights fell 14 percent as fewer conventioneers and other visitors came to the city.

Hilton's owner said it worked to cut labor, food and other expenses during the quarter, and they came in at $53.5 million vs. $68.46 million in the year-earlier quarter.

The results are in line with other second-quarter reports from Las Vegas hotel-casino operators, most of which reported lower occupancy rates and reduced room rates.

The Las Vegas Convention and Visitors Authority this week reported that in June, 2,980,122 visitors stayed in Las Vegas, down 6.3 percent from the same month in 2008.

And the state Gaming Control Board reported that statewide gaming win, computed before taxes and business expenses, fell 13.7 percent to $10.7 billion in fiscal year 2009. That's on top of a 1.9 percent decline in fiscal 2008 as the recession deterred visitation to Nevada casinos.