Interest Expense Creates Loss for Hard Rock Resort

LAS VEGAS-Due to big interest payments the Hard Rock Hotel and Casino this week reported a net loss in the third quarter of the year despite higher overall revenues. The company’s $3-million loss from operations turned into a $22.3-million net loss due to $19.3 million of interest expense. The loss was very similar to the same year-earlier period, when a $1.3-million loss from operations turned into a $22-million net loss thanks to $20 million in interest expense.

The increased revenue, to $48.9 million from $45.8 in the same year-earlier period, is attributable to the addition of its Paradise hotel tower and an expanded concert venue. The revenue increase was not universal, with 24.7% increase in food and beverage revenue and a 4% increase in lodging revenue offsetting a 31.5% drop in casino revenue and an 18.5% decline in retail revenue.

Casino revenue fell to $9.8 million from $14.3 million on a nearly 50% drop in table games revenue, which the company said was due to a combination of less being bet and a much lower hold percentage (8.9% versus 15.8%). Food and beverage revenue increased to $25.4 million from $20.3 million due to the additional hotel rooms and the expansion of The Joint, its concert venue. Lodging revenue increased to $10.4 million from $10 million due to the additional hotel rooms despite a decrease in the average daily rate to $136 from $193 and a decrease in hotel occupancy to 89.0% from 92.4%.