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StumbleHarrah’s reports loss as recession takes toll
Tuesday, April 27, 2010 | 8:25 a.m.
Gary Loveman, CEO of Caesars Entertainment
Harrah's Entertainment Inc. today reported a first quarter loss on lower revenue as the recession continued to reduce spending at its big Las Vegas Strip resorts.
The company said it lost $195.6 million vs. a loss in the year-ago first quarter of $132.7 million as revenue fell 2.9 percent to $2.188 billion.
"Revenue fell due primarily to the continuing impact of the recession on customers’ discretionary spending and reduced aggregate demand, which continued to pressure average daily room rates," Harrah's said in today's earnings report.
“While competitive factors, including increased room inventory, continued to affect results from Las Vegas, the new sales initiatives we piloted there have shown encouraging results and are being expanded to 10 additional properties around the country,” Gary Loveman, Harrah’s Entertainment chairman, chief executive officer and president, said in a statement.
Net revenue for Harrah's Las Vegas Strip-area properties fell 0.5 percent to $682.8 million, but were down on a same-store basis -- excluding the newly acquired Planet Hollywood resort -- by 4.4 percent.
Harrah's revenue decline on the Las Vegas Strip is in line with preliminary results for the quarter from MGM Mirage, which said revenue per available room on the Strip fell 8 percent year over year to $94.
For Harrah's, MGM Mirage and other Strip operators, increases in visitation to Las Vegas have not kept pace with room additions at CityCenter and other properties.
Harrah's said today: "While hotel occupancy remained strong at approximately 90 percent, 2010 first-quarter revenues declined slightly in the Las Vegas region from the 2009 period due to increased room inventory in the market, weakness in the group travel business, lower spend per visitor and lower average daily room rates." The Las Vegas region includes Bally's, Bill's Gamblin' Hall & Saloon, Caesars Palace, Flamingo, Harrah's, Imperial Palace, Paris Las Vegas, Planet Hollywood and the Rio.
Harrah's did not mention in its earnings report a Bloomberg News story saying the company is interested in selling the Rio, which is separated from the rest of the Las Vegas properties by Interstate 15.
The Las Vegas properties generated EBITDA of $190.9 million in the quarter, down 3.9 percent from the 2009 quarter. EBITDA is a profitability measure meaning earnings before interest, taxes, depreciation and amortization.
Net revenue for Harrah's properties in Laughlin, Reno and Lake Tahoe fell 4.1 percent to $109.9 million while EBITDA dipped 10.1 percent to $18.7 million.
Also during the quarter, the company received consent from holders of $5.551 billion of commercial mortgage backed securities to extend their maturity to 2015 and to give Harrah's the ability to purchase the loans at discounted rates.
This and other financial-engineering deals have left the company "positioned with substantial liquidity and minimal near-term debt maturities and ... better poised to capitalize on an eventual economic rebound and long-term growth opportunities," Loveman said in the statement.
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and the beat goes on. hopefully they keep the room rates at the low bottom as it makes visiting Vegas very interested at this level. The machines and poker sucks at Harrah's properties. They take 5 dollars rake at the same poker games all MGM properties only charge 4 dollars. Why is that?
yeah, tiredofvegas,I can feel for you. I stepped foot into PH for a few minutes after visiting CityCenter. Although PH is not originally Harrah's style, I can "smell" the negativity inside. I was soooo happy when I was out again on my way to my favorite locals casinos. Harrahs', MGM and the rest of the Strip properties don't deserve any better. Too bad though, the fat cats are collecting bonusses, regardless. And the blue collar workers are being pushed around or even fired. This is capitalism at its finest. Very sad.
The Red Rock poker room almost went out of business several years ago when the players revolted after they raised the rake from 4 dollars to 5 dollars. You would think that they would learn.
They just downgraded my rewards to gold from platinum because i was unable to build the points in the recession. So guess I will stay at mgm city center on my next visit. Not very smart Harrahs
And they pay 6:5 blackjack, Boris, when everybody else pays 3:2. I tell everybody I know that you if you are going to gamble do it at the non-Harrahs properties.
Yes the negativity is palatable at Harrah's, Have the fat cat ever heard of do unto others as you would have done unto you!
Is Harah's still purchasing Maloof's (The Palms) debt?
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6:5 b-j and then these partypits everywhere. Loud music and a lot of silicon and flesh. This turns the entire game into a ridiculous clown affair. When somebody is wagering serious money I don't think he gives a flying duck about how sexy the dealer looks like. To a serious gambler, 6:5 or 3:2 and all the other rules are essential, not the silicon thing.... a serious gambler is interested in good comps, good rules, ambiente, and not in super loud music and all the other shicky mickey. The tourists wagering perhaps 30-50 dollars on a given day , that's not the kind of player the casino needs to pay its debts,,,and perhaps make some profit. However, they will not get the message until it's too late. And till then, all the fat cats will keep collecting their bonusses and pack their bags when the moment's there. A shame!
Haha!!! The games at the red rock poker room are so tight already. Imagine they would rake out 5 dollars (10 per cent up to 5 usd !!!!), plus 1 dollar per pot for this ultra-difficult bad beat jackpot plus then you tip 1 or 2 dollars for the dealer (some players tip much more than that from what I learned, although it makes no sense to me....), if they would cut 10 per cetn plus 1 plus 1/2 per pot, I make a million dollar bet that this would definetely kill the games. Nobody can beat the game under such conditions. Even 10 per cent up to 4 is tough if the players are evenly skilled (which they are at red rock from what I noticed). So, after all, these poker rooms are facing tough times and heavy competition....which is the reason why I spent much more time on game selection and 100 per cent videopoker than on live action poker such as I did in my previous visits.
From Switzerland
The Palms falls next as we continue to enjoy the benefits of City Center opening. Fewer visitors spread between more hotels does not make for a sustainable business model.
Maybe harry Ried and his buddy Barrack can spread some more wealth around as gasoline crosses $3.00 a gallon and make everything better.
Comment removed by moderator. Personal attack.
When a casino's bonds become junk bonds, then the entire gaming enviroment in such a casino becomes a program to fleece players out of more money. Not intentionally at first, but as the direct result of upper management putting pressure on individual casinos and their managers to meet unrealistic goals. When this begins to happen, players should just stay away.
Over the next couple of years, I'm sure casinos owned by Harrahs will see a large part of their "Seven Star Players" jump ship to the Wynn and elsewhere because of the casino's junk bond status. Afterall, if we don't want to buy their bonds, then why on earth should we to trust them with our money while we gamble with markers in their casinos. (I don't think the free cruises are going to help much.) Besides, we all get skiddish when we hear of the patron abuse stories in the casino in the LV Sun, from other players, and now from the dealers that work there - (since they've become unionized.)
Just my ten cents,
Staying Away
I will never cease to be amazed at how embittered employees will remain with an employer they show so little respect for. I'm not a particular fan of Harrah's (I don't care for their "brand" nor how they tarnish the brands of the property's they own) but they are no worse an employer than the vast majority of gaming companies and likely better than most. Investors did well with them for years as did employees in their 401K plans. Those who disparage their company anonymously are cowards.
"Revenue fell due primarily to the continuing impact of the recession on customers' discretionary spending and reduced aggregate demand."
Let us examine WHY there is "reduced aggregate demand" BS 6/5 Blackjack rules, tight slots, expensive food, lousy comps, the entire Hotel/Casinos owned by a few large corporations which generates little or no competition between the properties along the strip. these are the main reasons the tourists are staying away from Las Vegas, and Harrahs is losing money.
Environprotector keeps saying it over and over, and he is absolutely right, But nobody listens to him. Once again, they just never learn.
The only descent Harrahs property is Caesars. The rest should be leveled . Epecially Ballys and The IP.
Right now a trip to Las Vegas looks too risky.
Harrahs has gotten so big that the gaming commission is powerless to enforce actions against them, out of fear that the casino could go bankrupt and that people could lose jobs as a result. Consequently, how do gamblers know they will get paid if they hit the jackpot?
A casino that is this big and in this bad of finacial shape has a license to fleece the general public.
When casinos are allowed to get this big, in the end, everyone loses.
"The only descent Harrahs property is Caesars."-
Think again! That's not what the dealers are secretly saying since union.
BorisR said: "yeah, tiredofvegas,I can feel for you. I stepped foot into PH for a few minutes after visiting CityCenter. Although PH is not originally Harrah's style, I can "smell" the negativity inside. I was soooo happy when I was out again..."
There is a reason for that....nothing good has come about for PH employees from this 'merger'.
Between Harrah's taking PH perks away from employees and reducing staff to a skeleton level resulting in continuous customer complaints, PH staff is more than burned out. About 80% of our team is looking to leave - not just PH, but Harrah's in total.
More work, less benefits and a never ending supply of unhappy customers.
PH. RIP.
vegasm, I must admit, I feel the same by entering the Mirage, Bally's, or Excalibur. To me, most Strip joints are pretty much the same. When I went to the Riviera, I felt a little bit of old style Las Vegas to be alive, still, and it was good. In addition to that, there were some good videopoker machines on the floor, which I enjoyed a lot. Fun to see that the players club booth has been put where they apparently seemed to be the old sports book. Anyway, real Vegas starts where the Strip ends. On Boulder Highway for instance, there are a few little casinos, very much to my liking. Also, places such as the South Point, The M, and other places like the Gold Coast, Orleans, etc, that's Vegas. And not what most tourists get to see when checking-in for 3 nights at any Harrah's or MGM Mirage resort. Sad, but true. The best of Vegas can't impossibly be found on the Strip. The good old days are over.
We like Harrah's for room rates (Imperial Palace), Don't play any 6-5 BJ, Like a few restaurants at Harrahs resorts, but do most of our dining at Local places not attached to casinos. The one advantage to Harrah's rooms is the lack of a "resort fee" that MGM and Stations insist on. My gambling is minimal, a little slot play, low limit blackjack, etc. Usually Downtown or Jean. Some slot play or Keno at Harrahs.
Harrahs is to be applauded for not gouging us with the resort fees.
South Point No 1 !!!
what is this? A salescorner????? Your ad has been reported. I think you will not be able to use this web space for your armani replica blow out sales, dude!
It really cracks me up to see all the comments on how players get ripped off with 6/5 blackjack. How many times in an hour (70 hands) do you ever get a blackjack?
If you guys notice the only BJ games that have 6/5 are the ones that offer a side bet of either Royal Match, Pair Square or other combinations that pay way better and show up more often than a BJ!! The 3/2 has no side bet!! Quit whining and if you are so upset about this then you are not gambling for entertainment you are gambling because you have a serious problem!!!
harrahs over expanded at the wrong time and is stuck with bad inventory. throw in the hassle at the airport, the competition from the indian casinos and the lousy economy,its obvious why you continue to lose money.
The casinos must be counting on the denver21's of the world to make their profits.
Blackjack comes up about 4.8% of the time. So, using the theoretical 70 hands/hours that would be about 13.5 times over a four hour period. Now, at only $10/hand those blackjacks pay $202.50 at non-harrahs properties. They pay $162 at Harrahs properties. That is $10/hour additional take at Harrahs. I use that number because it makes the math simple. At $25/hand the difference is $25/hour. Ten hours of gambling over a weekend at $25/hand and the difference is $250.
That may not upset Denver21 for whatever reason. But most of us with a brain are competitive and we play games to do our best. My point is you can do better elsewhere. To me, that $250 makes my weekend more fun.
According to Denver21's logic if you gamble for fun then paying even on blackjack would also not matter.
So Denver21 thinks that if you want to play and enjoy losing the least amount possible then you have a gambling problem. But if you just throw your money away then it's entertainment.
Unreal...
First of all lightfoot, Harrahs is not the only property that has 6/5 odds. And all of Harrahs properties have 3/2 blackjack as well as 6/5. At most Indian Casinos around the country, they charge .50 cents per hand to play blackjack. Thats $35 for 70 hands of play which is taken up front before the hand is dealt!! I just get tired of hearing how Harrahs is such a terrible place to play, stay and work and yet they are no different than any other joint in town. People that make these negative comments about Harrahs have either lost money at their Casinos or couldn't cut it as an employee so all they can to do is bash them.
Well, I've never been to an Indian casino that charges 50 cents per hand. Wouldn't spend a dime there if I saw that. And what drove me from Harrahs properties was them increasing the take on gambling. I've never been wronged by them in any other way. They treated me well. Just as other properties do. It's just a lot smarter to gamble at other properties like the Venetian or Wynn. The slight extra money withheld pays for a damn nice room and a much better visit. Competition is good and there are better options than Harrahs properties. I stand by what I say. The table gamblers I know stay away. And, of course, that means we also eat and shop and do other things in those more favorable casinos.