Expansion boosts Stratosphere results

Thursday, Aug. 15, 2002 | 10:53 a.m.

Stratosphere Corp., owner of the Stratosphere hotel-casino on the Las Vegas Strip, Wednesday reported a profit for the quarter ended June 30 of $1.2 million, an improvement from the $237,000 earned in the year-ago quarter.

Revenue after promotional allowances increased from $33 million to $38.9 million.

The company, controlled by investor Carl Icahn, attributed the increase not to stronger business trends but to the expansion of the property's hotel by 1,000 rooms in 2001, giving it 2,444 rooms.

Hotel revenue increased $6 million or 46 percent to $19 million for the six months ended June 30. The average daily rate remained at $49 during the six-month period, though room occupancy decreased 9.9 percentage points to 88.2 percent.

"Management attributes the decrease in the occupancy percentage to uncertain general economic conditions and increased competition from high-end casinos and hotels that have entered the mid-level customer market as a result of the Sept. 11, 2001, terrorist attacks and the recent economic downtown," Stratosphere said in a statement.

The extra 1,000 hotel rooms helped lift revenue for the Stratosphere casino and its 1,149-foot tower, observation deck and rides.

Casino revenue increased $4.7 million or 17 percent to $32.4 million for the six months ended June 30.