Visitors enter the Cosmopolitan of Las Vegas for the first time as the doors to the new property on the Strip opened to the public Wednesday, Dec. 15, 2010.
Wednesday, March 30, 2011 | 4:11 p.m.
The new $3.9 billion Cosmopolitan hotel-casino on the Las Vegas Strip is on track to be profitable, its owner suggested Wednesday.
Unlike some competitors that have had to write down the value of their casino resorts, called an "impairment," the Cosmopolitan, controlled by Deutsche Bank, said in its annual report it doesn't anticipate doing this.
This analysis is based on market data on visitation trends, hotel room supply, occupancy rates, average daily rate and revenue per available room statistics of competitors; gaming revenue trends and overall economic conditions and indicators, the report said.
"Based on these projections, management believes the cash flows from the property are sufficient for the company to recover its investment in the Cosmopolitan and no impairment was indicated," the report said.
Deutsche Bank in 2009 and 2010 had written down the value of its investment in the Cosmopolitan by some $756 million. It's now valued -- on paper -- at about $3.3 billion.
The Cosmopolitan today said it netted $10.6 million in revenue in 2010, but lost money because of $116 million in preopening expenses.
For 2010, when the resort was open 17 days, the property lost $139.5 million. Since it wasn't open in 2009, there are no meaningful comparable figures for the resort.
The property posted strong room occupancy (97.8 percent) and an average daily rate of $319. This room rate likely was affected by opening-month excitement typical of a new resort.
The Cosmopolitan opened on Dec. 15 with 1,998 hotel rooms and in today's report it said another 968 rooms will open through August. Also on the drawing board is an 1,800-seat showroom, with no definite plan for when it will be built.
The Cosmopolitan noted lawsuits continue against the company over disputed condominium purchase contracts.
"The company is therefore, unable to predict how many purchasers will ultimately perform to their contracts, and thus how many condominium units will ultimately close," today's report said.
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