Published Monday, Oct. 26, 2009 | 2:48 p.m.
Updated Monday, Oct. 26, 2009 | 3:16 p.m.
Morgans Hotel Group Financial Information
|3Q 2009||3Q 2008||% Change||2Q 2009|
|Revenue||$57.7 million||$77.7 million||-25.8%||$56.4 million|
|Net income||($27.8 million)||($9.3 million)||--||($10.057 million)|
|Net income per share||(94 cents)||(30 cents)||--||(34 cents)|
Earnings tumbled at the Hard Rock Hotel and Casino during the third quarter, one of the property’s joint-venture partners reported today.
The New York-based Morgans Hotel Group said Hard Rock's earnings before interest, taxes, depreciation and amortization fell 52 percent from $2.3 million in 2008’s third quarter to $1.1 million in the same quarter this year.
Occupancy at the Las Vegas property fell from 92.4 percent to 89 percent. Average daily room rates fell from $190 to $133, down 29.8 percent from the third quarter of last year.
In July, Hard Rock opened its Paradise Tower, adding 490 rooms, the company noted in its quarterly report. The hotel-casino’s next expansion, consisting of 374 suites, an additional pool and an expanded casino floor, is expected to open later this year or early 2010, Morgans said. The expansion project has a price tag of $750 million.
Morgans Hotel Group Chief Executive Officer Fred Kleisner said the opening of the Paradise Tower drove a 7-percent increase in revenue at Hard Rock during the third quarter of 2009.
“We saw a continuation of high-demand on weekends and we are seeing an increase in mid-week demand as well, driven by the opening of the new Hard Rock convention center,” Kleisner said.
Company-wide, Morgans reported a net loss of $27.8 million, or 94 cents per share, in the third quarter of 2009 compared to a $9.3 million loss, or 30 cents per share, in the same period of 2008. The company said the loss including non-cash impairment charges of $29.1 million.
Revenue fell company-wide to $57.7 million in the third quarter of this year from $77.7 million in the same period of 2008.
“While business conditions continue to remain challenging, we are beginning to see preliminary signs of recovery across the industry. The rate of decline in the lodging sector has slowed and we are beginning to see indications of the return of demand in key markets,” Kleisner said during the company’s third quarter conference call.
On Oct. 15, Morgans announced that an affiliate of The Yucaipa Companies, a Los Angeles-based holding company, invested $75 million in the company in the form of preferred securities. The investment “significantly strengthens MHG’s balance sheet and provides long-term financing for growth,” Morgans said in its quarterly report.
Morgans Hotel Group operates 12 properties in New York, Miami, Los Angeles, Scottsdale, San Francisco, London and Las Vegas. In addition to those properties, the company has two hotel developments in New York and Boston.