Owner of Stratosphere reports flat 2nd-quarter business
9 August 2012
The owner of the Stratosphere in Las Vegas says business was flat in the second quarter.
American Casino & Entertainment Properties LLC, which also has two locals casinos in Las Vegas and a hotel-casino in Laughlin, said today it lost $2.8 million during the quarter ended June 30.
That’s identical to the loss in 2011’s second quarter.
Net revenue edged up by $100,000 to $87.7 million.
EBITDA — a key performance measure for casinos — fell from $18.2 million to $16.1 million as certain expenses increased. EBITDA means earnings before interest, taxes, depreciation and amortization.
Hotel occupancy at the 2,427-room Stratosphere was 91.7 percent during the second quarters of both 2011 and 2012, and revenue from its tower rides and attractions fell 5.1 percent in this year’s quarter due to a decline in guest admissions and average revenue per guest admission.
During a conference call with analysts, American Casino officials said they hadn’t identified why visitation and revenue fell at the tower.
They said some weakness in consumer sentiment was detected around late May and early June, which resulted in weaker spending in some areas and reduced forward hotel room bookings.
The weakness in May and June was identified earlier this week by MGM Resorts International in its second quarter financial presentation.
The Stratosphere did manage to boost net revenue 0.5 percent to $40.1 million on a 0.4 percent increase in casino revenue and a 4.1 percent increase in hotel revenue, thanks to the average daily room rate growing from $49.17 to $51.79.
Net revenue at the two Arizona Charlies properties in Las Vegas fell from $24.5 million to $23 million on a 6.1 percent decline in casino revenue. Much of the decline was attributed to heightened competition for bingo patrons.
Despite struggles in the Laughlin casino market, American Casino’s 1,907-room Aquarius resort boosted net revenue 5.6 percent to $24.4 million, thanks to increased play at its slot machines, a higher table game hold percentage and higher hotel occupancy.
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