The company that owns and operates The Cosmopolitan of Las Vegas reported a loss Wednesday of $139.5 million for the 17 days the hotel-casino was open last year.
In a regulatory filing, Nevada Property 1 LLC, cited preopening expenses of $116.5 million as a "major contributor" to the loss, but added they "will not be incurred in future periods." Without pre-opening expenses, The Cosmopolitan netted $10.6 million.
"We are pleased with the response to The Cosmopolitan and our brand. We are excited with what we are seeing within the Las Vegas market," John Unwin, chief executive officer of The Cosmopolitan, said in a statement
The Cosmopolitan, which opened with 1,998 hotel rooms on Dec. 15, reported gaming revenues for the year-end period were $4.3 million, while nongaming gross revenues were $14 million.
The Cosmopolitan's gross room revenues were approximately $4.2 million. Average daily rate and occupancy for that period were $319 and 97.8 percent, respectively, generating revenues per available room of $312, the company said in its earnings report.
Bill Lerner, an analyst with Las Vegas-based Union Gaming Group, attributed the high average room figures to the hotel's opening "right in the strength of the market" over the New Year's period.
"The Cosmopolitan will have nice results, certainly across the nongaming side," Lerner said. "The question is, can they compete on the gaming side with companies that have multiple (properties). Its definitely a challenge."
The average Strip hotel generates 38.7 percent of its daily revenue from gaming, while The Cosmopolitan earned 23.3 percent, according to David G. Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas.
The hotel-casino earned 23.1 percent of its revenue from its rooms, with the Strip average being 23.5 percent. Food and beverage was 50.8 percent, well above the average of 22 percent.
Schwartz described the hotel's food and beverage numbers as "freakishly good," while "gaming might be underperforming a bit."
The Cosmopolitan operates a 100,000-square-foot casino that features 83 table games and 1,474 slot machines, according to the company. The hotel-casino also features a Cantor Race and Sports Book.
Both Schwartz and Lerner stressed it was still too early to judge whether The Cosmopolitan would be a financial success for Nevada Property 1, or its parent company Deutsche Bank AG.
Nevada Property 1 was formed in 2008, after Deutsche Bank purchased the 8.7-acre property out of foreclosure. The hotel-casino, which sits on the Strip between Bellagio and City Center, was built for $3.9 billion.
Other nongaming revenues included gross food and beverage revenues of approximately $9.3 million and convention and retail revenues, including the hotel's spa and salon, which added $500,000 to the bottom line.
As of Dec. 31, Nevada Property 1 had $86.1 million in available cash. The company's expenditures totaled $889.2 million last year, a result of finishing construction of the 2.995-room hotel.
In its filing, the company estimated total expenditures in 2011 to be $95 million, with approximately $85 million set aside to complete Phase 2 of construction and $10 million for other capital projects.
"We intend to finance the costs to complete Phase 2 of the property with borrowings from Deutsche Bank and its affiliates pursuant to the credit facility, but we may require additional financing to support future growth," the company said. "However, due to the existing uncertainty in the capital and credit markets, access to capital may not be available on terms acceptable to us or at all."
The company maintains a $3.9 billion credit facility with Deutsche Bank, with $3.1 billion of which was outstanding as of Dec. 31.
Contact reporter Chris Sieroty at firstname.lastname@example.org or 702-477-3893.