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Interest Expense Creates Loss for Hard Rock Resort

LAS VEGAS-With more hotel rooms and an expanded concert venue, the Hard Rock Hotel and Casino saw higher revenue during the third quarter of 2009 but interest expense smothered the gain.

By Brian K. Miller | Updated on November 10, 2009

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%.

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