By Amanda Finnegan (contact)

Fri, Nov 7, 2008 (7:22 p.m.)

The Morgans Hotel Group, part owners of the Hard Rock Casino and Hotel Las Vegas, today reported a $9 million net loss for the third quarter, compared to a $10 million loss in the comparable period for 2007.

Morgans has a 21 percent ownership interest in the Hard Rock. Though the hotel group reported a loss, the company insists it is outperforming the competition.

"Due to proactive cost saving initiatives and strong performance at our core properties, we delivered solid results in the third quarter, outperforming our peers despite the slowdown in the economy," Morgans Hotel Group president Fred Kleisner said.

Morgans reported $77.7 million in net revenue for the third quarter, up 8 percent from a year ago.

The luxury hotel group owns 11 properties, including the Hard Rock in Las Vegas, from New York City to Los Angeles, comprising an estimated 3,400 hotel rooms.

The Hard Rock recorded the second highest occupancy rate for Morgans at 92.4 percent, dropping 3.9 percent from the 2007 third quarter. Hard Rock recorded the highest room occupancy rate for the third quarter in 2007 at 96.1 percent.

Average daily room rates fell 15 percent from last year, dropping from $223.54 to $190. Excluding unoccupied rooms, revenue per room was $175.56.

Falling room rates have had the biggest hit on the property, Hard Rock’s vice president of marketing Phil Shalala said in late October.

“With the drop in rates on the Strip, it drives our rates down because we have to be competitive," he said. "When the Palazzo is doing a $99 room, that hurts us.”

Last month, Hard Rock celebrated a milestone in an $850 million expansion project with the topping of its North Tower, slated to open in September 2009.

Kleisner said renovations at the Hard Rock are “already financed” and will be finished in the fourth quarter of 2009.