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Thursday, Aug. 5, 2010 | 4:08 p.m.
Earnings fell by 35 percent at the Hard Rock Hotel and Casino during the second quarter, one of the property’s joint-venture partners reported today.
The New York-based Morgans Hotel Group reported earnings before interest, taxes, depreciation and amortization fell to $920,000 from $1.42 million in the second quarter.
Occupancy at Hard Rock fell from 92.3 percent to 81.8 percent during the quarter. Average daily room rates fell 12 percent during the year-over-year period to $146 from $165.
For the first six months of the year, occupancy at the off-Strip resort dropped from 90 percent to 80 percent. Average daily room rates declined by about 13 percent to $130.
The drop in the occupancy rate could be a result of the recent addition of two new hotel towers at the Hard Rock. The resort added more than 865 rooms this year in conjunction with a $750 million expansion project.
Morgans Hotel Group reduced its ownership stake in the Hard Rock at the end of 2009 from 20 percent to 12.8 percent. Morgans' partner in the property is DLJ Merchant Banking Partners, a private equity investment affiliate of Credit Suisse.
Company-wide, Morgans reported a net loss of $21.1 million, or 75 cents per share, in the second quarter of 2010, compared to a net loss of $10.1 million, or 32 cents per share, in the same period of 2009.
"We delivered strong results for the second quarter, outperforming industry growth averages across all key performance metrics, demonstrating once again that Morgans is well positioned to come back faster and stronger than the industry as the economy improves," Morgans Hotel Group CEO Frederick Kleisner said.
Revenue grew to $60.2 million in the second quarter of this year from $54.6 million in the same period of 2009.
Morgans Hotel Group has ownership in 12 properties in New York, Miami, Los Angeles, San Francisco, Boston, London and Las Vegas.
Arguably one the coolest joints in town, the Hard Rock Hotel & Casino houses some of Vegas' best entertainment, restaurants and nightlife.
At Hard Rock, it's all about the music. From the light fixtures made out of drum cymbals and guitar shaped door handles to stage costumes and tools of the trade of legendary musicians displayed on the walls, the hotel screams rock and roll. The Hard Rock's Joint has hosted some the biggest names in music — from The Who to Bob Dylan to hometown heroes, The Killers.Aside from the music venues, the pool at the Hard Rock is one of its biggest attractions. Spread out over 4.7 acres, the pool area features swim-up blackjack, a bar and grill, private cabanas, a bevy of secluded nooks, a waterfall and an extensive live music venue with a dance floor. During the summer, the pool transforms into the Rehab club on Sunday afternoons.
The resident nightclub Body English fuses European elegance with a rock star bachelor pad and it often a hot spot for visiting celebs and popular DJs. Vintage rock memorabilia lines the walls at Wasted Space, Hard Rock's anti-club.
Restaurants at Hard Rock are just as hip as the rest of the casino. Pink Taco serves up Mexican dishes, as well as a Central American and Caribbean menu. Nobu, one of five worldwide Japanese-specialty restaurants from famed Nobu Matsuhisa, satisfies a different taste. For round-the-clock cuisine, Mr. Lucky's 24/7, is sure to ease your appetite even after a Vegas-all-nighter.
Hey hard Rock, get rid of that non stop, load, annoying, and never ending metallic rock music, and you might get a few bucks out of me.
Can it get any worse?
Tom Shermspun,
Great Ruins of Las Vegas Tours
What use is an earnings number without interest being accounted for? I can understand taxes and depreciation not being included in the number, and I don't even know what they mean by amortization, which in Canada means the total length of time it would take to pay a loan down to zero with just regular payments.
TO: Las Vegas Sun
Please try to update the article showing the interest expense during the quarter, or explain to the uninformed like myself why interest cost is not relevant.
EBITDA is a scam for the benefit of management.
The Hard Rock Hotel/Casino/Cafe are PASSE!!!!!
I go there for concerts, not to gamble. They need to have better bjack rules and loosen their slots. The coffee shop is pretty good though!
different name, different day, same results. At least these earning reports are consistent with the crappy economy.
Personally, I love the Prime Rib special at the 24/7 Lucky Cafe...Pizza is great there too ! I agree about gambling - I don't waste my money there...but the Joint is fabulous ! Great concerts - nice, off-strip location, smaller is appealing to me since there is way too much going on at the strip.
and yet not one hotel is bashful about RAISING their rates for the weekend, even if it means fewer people staying there...mmm, rather keep the room empty than put a body in it??
I actually like the "loud metallic rock music"... it provides a lively vibe and chases the blue-hairs away. The Hard Rock doesn't try to be all things to all people. They know their niche and they stick to it. That said, I think we can all agree that gambling pays the bills for these joints and I don't see a high percentage of their customers gambling.
and I believe there are about to be a load of mortgages to reset any day now, wow things are sinking fast
Again how about less expensive rates over the weekends????
if they have growing revenue why do they have cheaper shares??
As others said above, "DROP THE WEEKEND RATES!" Go for the highest occupancy you can get, put people in the rooms, and put people to work.
The FED is practically giving money away. Adjust your business plans to take advantage of the deflationary economic conditions.