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StumbleStratosphere owner sees loss in second quarter
Tuesday, Aug. 4, 2009 | 9:40 a.m.
Sun Coverage
The owner of the Stratosphere offered low room rates to nearly fill the 2,444-room Las Vegas property during the second quarter, but room occupancy was weak at three sister hotel-casinos.
The lower hotel revenue at the Stratosphere, two Arizona Charlie's in Las Vegas and the Aquarius in Laughlin contributed to an $844,000 loss for American Casino & Entertainment Properties LLC in the quarter, ACEP disclosed Monday.
Because of lower financing costs, the results were an improvement from the $2.2 million lost in 2008's second quarter.
Factoring out the decline in interest costs, income from operations tumbled 35.7 percent to $9.9 million for the 2009 quarter.
And net revenue during the quarter of $94.2 million was down from $110.6 million in 2008's second quarter.
The recession reduced travel by Americans during the quarter, hurting the Stratosphere and Aquarius; while high unemployment and foreclosure levels in the Las Vegas area reduced gambling by locals at Arizona Charlie's Decatur and Arizona Charlie's Boulder.
The company said room occupancy totaled 95.5 percent at the Stratosphere, where the average daily room rate was $44.93.
The 258-room Arizona Charlie's Decatur turned in an occupancy rate of just 55 percent at an average rate of $50.24. The Boulder Highway Arizona Charlie's filled 52 percent of its 303 rooms at an average rate of $39.35, while occupancy at the Laughlin property was 47.7 percent at an average rate of $48.53.
ACEP said casino revenue fell 16.1 percent to $55.9 million during the quarter while hotel revenue fell 25.7 percent to $16.2 million.
Overall room occupancy fell from 84.4 percent in the 2008 quarter to 72.1 percent in the 2009 quarter, while the average daily room rate fell 16.6 percent.
ACEP has responded to the economic slowdown by cutting costs, reducing the number of full-time equivalent positions in Las Vegas and Laughlin as of June 30 to 3,708, down 13.7 percent from the June 2008 level.
Compared to the 2008 quarter, job reductions and other measures cut the company's payroll costs by 10.9 percent during the 2009 quarter to $40.1 million.
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Looks like Icahn got out at the right time!
Wow those occupany rates are absolutely terrible.
HA HA HA! Bunch of IDIOTS! When will they learn that just lowering the room rates alone will never work! Bring back the 98% payback to all the machines along with lowering the prices on everything is the only thing that will work!
You really have to sit back and laugh when you read their crys of looseing money.They dont want cheap rooms! They want to have fun while they loose there money! I would love to see just one resort go back to the old ways and see how fast before the place is packed?As things are now when you walk past a casino is people walking out with frowns~!I for one would rather go to a place where people are packed in laughing smileing knowing there getting the best bang for their buck! Bring back the paying machines,bring back the 99 cent shrimp coctails,bring back the 3.99 buffett?Get back a loyal fan base,and word of mouth will take over!!! COMMON SENSE 101!!!
whod' want 2 stay at az charlies on decatur
I had a lot of fun at the Stratosphere when it was new, and the slots payed 98%. Made a lot of money there, and even when I didn't, I had a lot of fun playing. Then, they started removing all the machines that paid and left the ones that didn't. They brought in machines I didn't like, took away easy comps and raised the prices on their so-so food.
After three years, they lost a loyal customer in me and my friends and we moved on to downtown casinos. I talked with the floor slot supervisor about all the machine removals, but all he would say was he had to keep the floor current to attract customers. Current? Replacing paying machines with tight ones? A total jerk, like the ones who run all the casino floors now in Vegas. Their "current" machines are the reason for so many empty slot machine rows and empty seats, the falling casino revenues and the nose dive of the Las Vegas and Nevada economy.
It took a few years, and a down economy for the effect of their stupidity to show results, but the current casino problems can't be blamed on the recent economic downturn, or Obama, or anyone else. It is the end result of their boundless greed since the late 1990's.
The casino's self-serving, self-deluding attitude was that players would continue to come and continue to play, no matter how much tighter they cranked their machines.
When building arcades for kids fell out of favor, they brought in fancy restaurants with snooty chefs and high prices, and hoards of over-priced shopping malls to further fleece the visitors. Now, their towers of greed and excess are going empty and they are crying over low revenue. They blame everyone but themselves for their problems. Look in the mirror folks, and not just to straighten your ties.
They banked on an endless stream of suckers, that has since dried up. No sympathy for the empty suits who did this, and Vegas needs a major shakeup and wakeup. Bring back the 98% slots and comps. Lower room rates are meaningless if you don't fix the root problems that keep people away. Try to remember why players flocked to Vegas in the first place.
They need to lower their rates even further. The Stratosphere hotel is not such a big draw.
rumrunner/ t'er are correct; too much competion has watered down the product and the customers are hard to find; bring back the .99 shrimp cocktail!
It will take more than a .99 cent shrimp cocktail to save Vegas casinos, but that would be a tiny start. Bring back the fun to playing first, and maybe folks will come back. Otherwise, find a seat in the shade, and watch Vegas dry up and die.