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StumbleHarrah’s sees revenue take hit on economic weakness
Caesars Palace, on the left, is one of several Harrah’s-owned properties on the Las Vegas Strip.
Monday, April 27, 2009 | 9:22 p.m.
Sun archives
Harrah's Entertainment Inc., the world's largest casino operator, late Monday reported first-quarter financial results that showed continued declines in revenue for its big Las Vegas resorts that have been hit hard by the recession.
Harrah's said that overall, revenue fell 13.3 percent to $2.254 billion in the first quarter, compared to the first quarter of 2008. The company's loss from continuing operations narrowed, from $275 million in the 2008 quarter to $127.4 million in the 2009 quarter.
Cash flow -- or earnings before interest, taxes, depreciation and amortization -- on a property level fell 13.7 percent to $561.3 million.
In Las Vegas, revenue tumbled 20.5 percent to $686.4 million and cash flow fell 27.9 percent to $198.6 million. Harrah's Las Vegas properties include Caesars Palace, the Rio, Paris, Bally's, the Flamingo, Bill's Gambling Hall, Harrah's and the Imperial Palace.
"While hotel occupancy was strong at over 90 percent, first-quarter revenues and income from operations in the Las Vegas Region were lower than in the 2008 first quarter due to lower spend per visitor and weakness in the group-travel business, which led to lower average daily room rates. Cost-reduction efforts helped partially offset the impact of these factors on property EBITDA (cash flow)," according to a company statement.
"Our first-quarter results continued to be impacted by the economic slump that has reduced consumer spending, but the improvement in our operating margins over those of the past few quarters indicates our expense-reduction efforts are paying off," said Gary Loveman, Harrah’s chairman, president and chief executive officer.
Elsewhere, revenue was off 15 percent in Atlantic City, down 12.1 percent in Louisiana and Mississippi, down 2.6 percent in Iowa and Missouri, up 3.3 percent in Illinois and Indiana and down 21.8 percent for Nevada casinos outside of Las Vegas in such markets as Lake Tahoe, Reno and Laughlin.
During the quarter, Harrah's completed debt exchanges that reduced debt by $1.8 billion and annual interest expenses by $73 million at Harrah's Operating Company; and overall for Harrah's Entertainment that cut debt by $2.3 billion and reduced yearly interest costs by $104 million.
"The reduction of our overall debt and reduction of our interest expense resulting from exchange offers completed this month and at the end of last year were also important developments," Loveman said.
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Revenue off 13% in Vegas, and 15% in A/C. The other places are mice-nuts. Time to take your millions, and go back to Western Mass., Gary. Let some pro's take over-you're toast. And not too soon...
look what a great property the rio was when marnell's had control, harrah's buys it and just another 2nd rate casino, would never consider it a place to stay.
The bigger they are, the harder they fall!
Why can not corporate gambling see that "expense-reductions" are people. When a company wipes out entire departments, fires older higher paid workers to obtain newer lower paid workers, and takes a stand that the company matters and people do not, they reap what the sowed. People drink, gamble and party and reduce their own expenses when they do not have a job. Gary cut his own business base, his perfect plan now has this company spiraling downward in a never ending expense reduction plan. It takes money to make money. take a stand, stop the layoffs, stop the cut backs, restore confidence that corporate will not destroy Las Vegas by focusing on the bottom line. Focus on people!
Harrahs......every casino they touch, has ruied my gamblin' experiences. I used to love Harveys in Tahoe...Harrahs bought it,slot players nightmare....Barbary Coast,my favorite small place for years...Harrahs buys it,end of fun. Horseshoe in Bossier City,LA....Jack Binion sells,Harrahs takes over,I haven't walked out of there in 3 years with a winning visit. ...Rio ? I reserved a room there a couple years back,checked in,saw all the stains on the furniture,carpets...cancelled reservation on the spot. They should rename the place "Atlantic City Alley",because that what it smelled like,when we walked in the front lobby. The Flamingo,it used to feel like Vegas,now you have to walk thru Margaritaville on one end or browse trinkets on the "mall" (kids area)at the other end.YUK!... Imperial Palace,takes the cake for sleasy raunch,on the sidewalk outside. Lets face it ,Harrahs seems to change owners,more often than they change the carpets. Total Rewards Players Club ? used to be great...now *Poof*
Loveman and Jones must go.
Touche on Harveys which used to be the best casino in Tahoe. Similar with the Rio, Barbary Coast and Horseshoe Bossier and Hammond. On the contrary though, they seemed to invest pretty heavily back into their properties before the recession hit.
Gary Loveman,
I can't wait to see you & your company held responsible for the thousands of unsafe rooms that Harrah's Entertainment left behind as a result of all of your illegal remodels! Public fire safety traps now documented by both the Clark County Fire & Building Departments. Lucky you guys are good friends with DA David Roger, his office has done a great job covering up for you thus far. I was told by Assistant DA Christopher Lalli in July of 2007 that if my allegations were found to be true the DA's office would prosecute Harrah's & all those that were responsible to the full extent of the law. Apparently he did not factor in his crooked boss David Roger, who is a much bigger criminal than anybody that he has ever placed behind bars! DA David Roger how many people have you interviewed regarding Harrah's illegal activities, and are any of them taped interviews? How many hours has your office put into investigating this? I am being told David by officials of both the CC Building Department & Fire Department that your office made the decision to charge the two Chief Engineers at the Rio & at Harrah's - two people that had knowledge of the remodels, but were not the responsible parties. David did you bother to read the Kessler Report?...you can read can't you? I am beginning to think that you are deaf, dumb, and blind that would be the only excuse for you having missed all of the corruption that surrounds you.
Gary Loveman, Tom Jenkin, Jan Jones, Don Marrandino & the rest of Harrah's Elite Management Team have you told Apollo & Texas Pacific Group that HARRAH'S CONSTRUCTION WORKERS, HARRAH'S EMPLOYEES AND HARRAH'S GUESTS WERE EXPOSED TO ASBESTOS DURING THE COURSE OF YOUR ILLEGAL REMODELS DUE TO YOUR NEGLIGENCE...DUE TO YOUR CONTEMPT FOR THE LAW...DUE TO THE FACT THAT THE ONLY THING THAT YOU CARED ABOUT WAS YOUR PRECIOUS BOTTOM LINE? I do hope that you get everything that you have coming to you, and know that I will be there every step of the way to insure that you do!
I have to echo the Harveys Tahoe statements...the place used to be awesome, now it's a ghost town. Filthy, outdated hotel rooms, closed coffee shop, they even closed the Total Rewards center during the week. It was awful. Harrah's sure has a knack for running places into the ground. Congrats, Harrah's!
Ditto. I also used to love Harveys Tahoe. It was a great place in it's day. The loss being reported here more than likely is not an honest figure. The loss has to be considerably larger.
About Harrah's and Harveys downfall in South Shore Tahoe-- over time there has been a "perfect storm" loss of popularity for these properties for local players, a catastrophe brewed by several factors.
One was the buying-out and clearing of dozens of folksy, independent, motels, inns, food and trinket bazaars--havens for weekenders looking for a pleasant and low-cost stay at the Lake--that lined both sides of the boulevard immediately adjacent to Harveys and Harrahs casinos. These fun little places were bull-dozed away to make room for a swanky, mega-condo and mercantile complex meant to attract the world-class investor and wealthy tourist.
At about the same time, a large portion of Harvey's casino layout was converted to floor space for a huge , very high-priced buffet restaurant. Gone were hundreds of nickel, dime, and quarter slots that used to entice players like me into the intimate niches of the inviting, circular labyrinth of the former casino. On the much smaller casino floor that remained, dollar and multi-line, multi-denominational machines proliferated.
The message: This place is for rich people, not for me.
Meanwhile, about 90 miles to the south-west, Jackson Rancheria, an Indian casino that started as a bingo hall is now a mega hotel --casino resort, located on Highway 88, a major route to the Tahoe basin. At Jackson, people from Sacramento, the Bay Area, and San Joaquin Valley are drawn by the friendly atmosphere, reasonably price food, and low-cost games--all available without chaining up the car to get through the snows of the Sierra Nevada.
In the Sacramento Valley, we also have Cache Creek, the hugely successful Thunder Valley, and the latest nail in the Reno-Tahoe casino coffin-- Red Hawk Casino, which is right smack on Highway 50 that leads up to Tahoe.
The current recession is cutting down on the world tourism that was so eagerly sought at the expense of catering to local visitors.
Harveys and Harrahs are curiosities of by-gone days. Beautiful Lake Tahoe will always draw crowds, but gamblers will be farther away and fewer between.
The way the treated those families to get off there land in 30 days,and now to drive by and see those lots empty makes me wonder just what was wrong with those places? Did there plans change when the masses just stopped comeing here to loose the nest egg? They brought it on themselves,and now its me that laughs all the way to the bank! May the self implosion begin with the company,and may they sink like the people they booted out for no damn good reason!!!!
After a recent stay at Harrah's LV, I will likely never return to the place.
Although personnel available attempted to make the trip enjoyable, the lack of appropriate staff levels created long service lines for everything from restaurants to cashiers.
My opinion is that the place is a mess which is likely caused by the cost containment measures. Public hallways and restrooms are a disaster - I did not see any restroom maintenance attendants during my entire 4 day stay. Elevators clunk and rattle. Food quality at the buffet is terrible - I think everything is served at the same "warm" temperature to save cost.
Worst of all, they always have the same old tired slot machines with worn-out video screens. I guess if any money is still going into the machine, it must be viewed as good enough.
I want to restate that the Harrah's personnel did the best they could, but it doesn't seem like they have much to work with anymore.
My wife and I stayed at Harrahs LV 5 times last year ,we had a great time all 5 times . From check in to check out everybody was great.The rooms where all clean ,three of the trips we had newer rooms. We are going to be there again in Aug. of this year.As far as the gambling ,COME ON ! If you can not afford to lose some times STAY HOME and play on your computer for free ! We have won some and lost be we had a great time ! As far as Harrahs posting a loss WHO IS NOT POSTING LOSSES ! I think the above comments are just sore LOSERS ! Get over it .