The Stratosphere is seen Monday, December 21, 2009. Photo by: Sam Morris
Improving business conditions in Las Vegas during the first quarter didn't help the owner of the Stratosphere hotel-casino much, with the company today posting a bigger loss on lower revenue.
Part of the loss was attributed to the Stratosphere spending more on advertising -- yet seeing fewer people visit its casino. And those who did visit played lucky at the table games.
American Casino & Entertainment Properties LLC -- owner of four casinos in Las Vegas and Laughlin -- said it lost $6.2 million in the quarter vs. a loss in the year-ago quarter of $2.7 million.
Net revenue of $86.4 million fell 1.5 percent.
Adjusted EBITDA decreased 15.2 percent to $16.7 million. EBITDA is a profitability measure meaning earnings before interest, taxes, depreciation and amortization.
The company said its advertising spending increased about $2.4 million as the 2,427-room Stratosphere kicked off the “Elevate Your Expectations” advertising campaign, a promotion highlighting high-end amenities and improvements at the North Las Vegas Boulevard property. Also, Arizona Charlie’s Decatur began a campaign to promote its new restaurant, Ron’s Steakhouse.
The Stratosphere’s net revenues increased 3 percent with the company reporting flat occupancy and increases in the average daily room rate and food and beverage revenue. Convention and group bookings increased approximately 25 percent over 2010. However, casino revenue decreased because of lower casino headcounts and a 2.3 percent decrease in table games hold.
The average daily room rate at the Stratosphere increased from $43.39 to $50.50 while occupancy held nearly steady at 84.5 percent.
At the two Arizona Charlie’s properties in Las Vebas, net revenue decreased 4.5 percent in the first quarter.
"The Las Vegas local market continues to be impacted by a struggling local economy that continues to be impacted by high unemployment and declining home values. In addition, heavy promotional activity by our competitors highlighted by multi-million dollar giveaways and deep food discounts continues to dominate the Las Vegas local market," American Casino said in today's financial report.
In Laughlin, the Aquarius’ net revenue decreased 5.3 percent. Like the Tropicana in Laughlin, the Aquarius has been hurt by construction on Casino Drive, the main road through the Laughlin resort corridor.