An executive with the company that owns the Stratosphere hotel-casino said he expects the development of a new Strip resort by the Genting Group will expand the north Strip market and attract new business to the area.
Ned Martin, chief financial officer for American Casino and Entertainment Properties, said he doesn’t expect Genting’s planned Resorts World Las Vegas will negatively affect the Stratosphere, although he admitted that it’s hard to predict how adding 3,500 new hotel rooms would change Southern Nevada’s room capacity outlook.
Martin commented in response to an inquiry in today’s ACEP earnings call.
The company posted a fourth-quarter loss of $8.3 million, citing soft occupancy and room rates and increased repair and maintenance expenses.
ACEP also reported increased taxes and fees, a canceled debt offering write-off and increased expenses on the company’s online gaming subsidiary.
The company, which also owns two Arizona Charlie’s neighborhood casinos and the Aquarius in Laughlin, reported the loss on revenue of $79 million for the quarter that ended Dec. 31. A year ago, the company had a $7 million loss on revenue of $81.5 million.
Net revenue decreased 5.1 percent at the Stratosphere, the company said, with lower occupancy rates leading to reduced gaming revenue. In addition, the property’s signature Top of the World restaurant was closed for three weeks for renovations, costing the company an estimated $300,000.
Arizona Charlie’s net revenue also fell by 5.1 percent, with most of the decline attributed to the Boulder Highway location. The Arizona Charlie’s Decatur location also had lower slot revenue, despite increased promotional efforts.
The Aquarius, meanwhile, had a 2.9 percent increase in revenue for the fourth quarter over 2011, attributing that to a 3.6 percent spike in casino revenue and a 2.2 percent bump in the average daily room rate.
The company spent $113,000 during the quarter on its ACEP Interactive subsidiary toward development of a free-play poker site, acePLAYPoker.com. The site debuted last month in connection with the opening of the Stratosphere’s “Pin Up” production show starring Claire Sinclair, who also is the face of the poker site.
Martin said the company expects to use the free-play site as a marketing tool, and there are no immediate plans to run it for profit because of the limited number or prospective players in Nevada and the uncertainty of establishing compacts with other states to expand the market.