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Published Friday, Nov. 13, 2009 | 9:21 a.m.
Updated Friday, Nov. 13, 2009 | 11:03 a.m.
American Casino & Entertainment Properties, owner of the Stratosphere, reported a net loss today of $1.8 million during the third quarter of 2009, which improved from a net loss of $8 million in the same period of 2008.
The Las Vegas-based casino operator said net revenue fell 17 percent to $87.7 million in the third quarter of 2009 from $105.7 million in 2008.
American said in today’s Securities and Exchange Commission filing and during a third quarter conference call that its quarterly results were affected by overall declines in consumer spending and visitation to Las Vegas.
“The good news from the standpoint of Las Vegas is that nationally things seem to be improving from an economic perspective, which we hope will lead to increases in leisure travel and tourism,” American Casino & Entertainment Properties President Frank Riolo said, looking forward into the fourth quarter.
The company, which owns the Stratosphere, Arizona Charlie’s Boulder and Decatur and Aquarius Laughlin, said occupancy at the four properties plunged from 82.6 percent in the third quarter of 2008 to 69.5 percent in 2009. Average daily room rates fell to $44.75 in 2009 from $50.70 in 2008.
Occupancy at the Stratosphere fell to 93.2 percent during the third quarter of 2009 from 97.1 percent in the comparable period of 2008. Average daily room rates fell to $43.77 from $57.42.
Like other casino operators in Las Vegas, American said it is expecting an increase in competition with the addition of CityCenter.
“The increase in supply is certainly going to have an effect on the market,” Riolo said. “Jim Murren, who claims to have more information than anyone out there, says we are going to see an increase in visitation. We’ll have to wait and see.”
Arizona Charlie’s Decatur saw the biggest drop in occupancy as numbers plummeted from 90.2 percent in the third quarter of 2008 to 44.7 percent in the same period of 2009. While occupancy declined at the property by nearly half, room rates remained relatively flat at $47.
The company said it has no plans on changing strategies at its Arizona Charlie’s properties but is instead focusing on maintaining its existing customer base.
In a cost saving initiative, American said it trimmed full-time staff by 14.8 percent during the third quarter of 2009 to 3,647 compared to 4,282 during the same quarter last year. The company said it also implemented changes in scheduling and benefits and eliminated certain positions, reducing labor costs by 11 percent to $40.8 million during the third quarter of 2009 from $45.9 in the same period of 2008.
It is virtually impossible to be anywhere in Las Vegas and miss the Stratosphere. It towers 1,149 feet above Las Vegas and is the tallest observation tower in the United States. The casino itself is 55,784 square feet and contains 950 slot machines, 120 game tables and 2,427 hotel rooms.
Of the hotel's 2,427 rooms, 909 were recently remodeled into Stratosphere Select rooms.
The Stratosphere is mostly known for its rides at the top of the tower. The Big Shot, located at the 113th floor, torpedoes riders up 160 feet using compressed air. X-Scream is a teeter-totter perched at the top of the observation deck — if that wasn't scary enough, the coaster arm flings the riders out 27 feet over the edge of the tower. Guests looking for something more sedate can just hang around the 107th floor and simply look at the scenery.
When the best news we can report is the losses are not as bad as they were last quarter it's not good for the city.
Thanks a lot harry Reid. Your years in charge of the Senate have been just miserable.
We loss less!!! YEAH YEAH. They didn't cut my full time position, however, I am thinking about giving it up so I can save the company money.
It is amazing they lost so little. American Casino & Entertainment Properties aka Goldman Sachs over-paid for those assets. I hope all those cuts that they made do not further erode business.
Do any of you expect a profit in this climate? A small loss in those low rung properties is pretty impressive.
As another current Strat employee, I can say with assurance that staffing levels on the hotel side are so lean now that morale is rock bottom and guest service varies anywhere from mediocre to abysmal. The current owners (Whitehall REIT, managed by GS) paid way too much at the top of the market and saddled themselves with a lot of debt. Sadly, things will not get better there anytime soon, and the current management team doesn't seem to know what to do about it except to plod along and grind the staff into dust.
Several months ago I'd read in the WSJ that there were talks to let Whitehall off the hook for some of the debt load in exchange for an equity stake for some of the creditors. Don't know what came of it, if anything.
When they cut costs, does it mean they shut down the cool Friday night disco music lounge and also cut down on the good videopoker? or does it mean the buffet quality was cut in half?
It means they closed the images lounge thad had excellent bands wend-sun for no cover or drink min. I've seen business during the swing shift I work decrease big time. However they do have live music in the new back alley bar located in the far rear desolate corner of the property instead of located in the heart of the Casino where the main action should be but isn't. Then all these fluff positions where added to give friends a job.
We were at the Strat a couple of weeks ago and had a good time. We won a little money and we had dinner in the coffee shop.
The food and service were pretty good. Of course there are better places, but hey, we gamble a little cheaper when we don't have the funds. Any employees should be telling all their friends to go to the Strat. JOB SECURITY? Anyone, Anyone?
It won't take too many friends to make up the deficit... start now.
Burne: re your comment on low staffing levels at the Strat. I work at a big box store in L.A. and our staffing is pretty bare-bones also. Last week they said that we missed our sales target by $80,000 (for the week) and we are now over budget on our payroll by 800 hours (that's for the month). That's the equivalent of the entire nighttime sales floor crew for a whole week. They can't eliminate the night crew for a week but I am bracing for the loss of more hours. So what do they tell casino employees at the daily meetings with the managers? How are you guys trying to push sales? lol
The Strat is screaming for the proper management which understands how to make this very unusual property balance financially. The idea of this place first and foremost is a trip to the top for the best view your gonna find west of the Mississipi. With that in mind, that's where the effen casino should be! Can't think of a better draw into a casino than that what this place is all about! The view. PUT THE CASINO IN THAT ROTATING AREA AND MOVE THE REST DOWN A LEVEL !! How hard is it to use your imagination?
sounds like a great idea. however, it was so stupid last time when I tried to hop on the elevator to the TOP and then this airport style security check-point just wouldn't stop beeping around, indicating that I was carrying some hand granades, C1, or some machine guns, which of course, I did not. My trip to the top ended before I could even enter the elevator as I finally refused to undress. The beeper just continued and I had to remove more and more items. it was just ridiculous. Hard to imagine that they can get away with it and what's the idea behind this security measures. i dumped my ticket and returned to the poker room where I got lucky and won the money for the elevator ticket back in less than 10 minutes and was out of the casino shortly after that.
A poker room at the TOP would be the absolute climax of all casino experience. However, it is questionable that the restaurant ownwers would agree to give up their rights on the location. Which is definetely most exciting and gives us the best view of the city.
Greetings from Switzerland
i have worked at the stratosphere hotel since 1999 i have to wonder if the owners of this hotel really knows what is going on there with the management team.i have come to 2 conclusions, one, they are trying to run this company into the ground and into bankruptsy on purpose or two, the managers have absolutly no idea what they are doing.i know the economy has had a big impact on alot of things,.this past 2 months has been like management against employees.they not only shut down the main coffee shop and room service during one of the busiest times of year, hence the rodeo.they have laid off over 12 cashiers, cut the food servers to where instead of a nine table station to a twenty table station.i have heard from customers in just this last week that they will never be coming back to the strat over fifty times,i understand cut backs but back when karl icon owned this place he went out of his way to show appreciation to his workers, and then writeen up for it.,now making the food servers take over the cashiering positions as well with 1- 2 hour class expecting to learn it all, when normal training would take a week before they let a cashier work on thier own. there is absolutley no communication what so ever.they have been discriminating against the people with disibilities who have fmla's, one manager was over heard by 3 food servers that she has to work with to many old farts. .this management team is running this casino and employee moral into the ground and im just wondering if the actual owners know what is going on there. ,leaving my job in tears along with others the mental stress along with the physical and emotional abuse they are attacking us with,but when you have kids to support you just keep working and doing the best you can,but it just is never good enough.rumors now say all servers on lunch tow have been suspended for stealing, obviously a huge misunderstanding due to no communication. that is your family too, we would enjoy coming to work and having fun doing it but now they are trying to fire people left and right,for no good reason,just from the harrassment there my health has gotten worse and my stress level is threw the roof.whos idea was it to close room service, close the coffee shop during rodeo time, i cant imagine how much money the casino lost because of that alone, and then putting food servers in charge of cashiering with virtually no training what soo ever making the guest wait way too long to get in and out. i had 3 babies since i started there,it is my income, now i just leave in tears every night cause i have managers telling us that all of a sudden we are totally incompetant to do our jobs. its a rough road but i really dont think that goldman sacs knows how far down the importance level of customer service has fallen.i hope they save this casino, it is such an awesome hotel but they need some major adjustments to bring it back to the great hotel it could very well be again.
what has happened to customer service?not only has the strat been cut to the core of hardley no union crew and replaced with five managers on the floor at once. is this how the company saves money but cutting and deleting union house staff that have been loyal to the strat since day one of its opening.the managers, i feel pitty for them because they either have absolutly no life and want to be there hoping to climb the corperate ladder, but in the mean time the others with family, what is this doing to thier home life when they work 60 hours plus a week,dark circles under thier eyes,and time and time again I have seen these loyal and hard working managers used up and throw out like yesterdays trash.the customers should get what they want. there is only 10 % that ask for things outside the menu, but why do they say no to a pancake instead of toast and let the customer walk out the door. what has happened to customer service.i know, not enough help, too many managers too busy looking for more strat employees to write up, and not paying closer attention to the customers needs.i figure these poor managers based on the hours they work probably average $6 an hour. ... sad