Hard Rock renovating rooms — posts loss on interest costs

Wednesday, April 18, 2001 | 11:15 a.m.

The Hard Rock hotel-casino in Las Vegas has launched an $8 million renovation of rooms in its first hotel tower, about two years after the hotel's first expansion.

The Hard Rock began the remodeling late last year, and said the project, which includes 339 of the hotel's 657 rooms, should be complete by year's end. About $5.8 million will be spent on this project in 2001.

"We completed our tower expansion in May '99, and what we're doing is theming our rooms to look the same as in the newer north tower," said Brian Epps, the Hard Rock's director of hotel operations. "After six years of being open, and averaging 95 percent occupancy, things get a little worn out, and we wanted to freshen up. We certainly want to have a fresh look all the time."

The Hard Rock saw a substantial increase in hotel revenues in 2000, primarily driven by much higher room rates. The Hard Rock took in $26.4 million from its hotel in 2000, up 40 percent, as average daily room rates rose from $97.41 to $109.30.

Overall net revenues were $120.8 million, up 37 percent. Casino revenues saw the largest increase, rising 47 percent to $54.5 million, while food and beverage revenues increased 45 percent to $35.6 million. The hotel's operating income jumped from $2.5 million in 1999 to $16.2 million in 2000.

The Hard Rock still posted a net loss of $947,000 for the year, caused entirely by interest expenses. That still was improved over a net loss of $12.2 million in 1999.

As a result of the Hard Rock's improved performance, Chairman and Chief Executive Peter Morton was paid $2.41 million in 2000, a 37 percent increase over 1999. Morton's contract entitles him to receive 2 percent of gross revenues, after comps, as a "supervisory fee."