Thursday, April 25, 2002 | 11:13 a.m.
The Aladdin's financial performance improved drastically in March, in line with the recovery trend being reported up and down the Las Vegas Strip.
In a financial report filed in federal bankruptcy court last week, the bankrupt Strip resort reported cash flow of $5.8 million in March, up 263 percent over February. March's cash flow is $2.1 million higher than the property's cumulative cash flow performance from its late September bankruptcy filing through Feb. 28.
Revenues rose 29 percent over February to $21.7 million.
The property still posted a net loss of $1.06 million, but this was down from the $4.2 million loss recorded in February.
Generally other Strip operators reported a steady improvement in business from January through March, and the Aladdin saw these trends as well, spokesman Fred Lewis said.
"That was definitely part of it, the fact the whole town was getting better, and we began to have more and more people coming in," Lewis said.
But Lewis also credited a "marketing blitz" launched by the Aladdin in March, which offered special travel packages to customers from Los Angeles and Phoenix. A series of notable events, including a Mary J. Blige concert and the U.S. Boxing Association's cruiserweight title fight, contributed to business at the resort.
"We have an overall marketing effort to ignore the bankruptcy and push the hotel product," Lewis said.
Occupancy averaged 96.5 percent in March at an average daily rate of $115. Aladdin officials are projecting occupancy will reach 98.5 percent in April.
For the entire first quarter, the Aladdin posted cash flow of $7 million. That's still well below the performance of the Aladdin's peer properties on the Strip, as virtually every major Strip resort posted cash flow of at least $20 million for the March quarter. The exceptions were Caesars Palace, where construction disruption led to a meager $17 million in cash flow, and New York-New York, which produced $19.6 million in cash flow.
Still, if the Aladdin maintained its March performance, it would produce $17.4 million in cash flow a quarter, and $70 million a year.
Sustained financial improvement will be critical for the Aladdin, as officials there have begun the process of marketing the property to potential buyers. Since prices for gaming properties are determined by annual cash flow, an improving financial performance could translate into a higher sale price for the property.
Los Angeles real estate investment firm Colony Capital LLC is one interested buyer. The potential price Colony Capital is willing to pay is said to be between $375 million and $500 million.
Since the property filed for bankruptcy in late September, it has posted a cumulative net loss of $48.5 million, and cash flow of $9.5 million.
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