The Tropicana said Wednesday that net revenues declined 30 percent in 2010 due to the recession's adverse effects on the gaming industry and the temporary closure of hotel rooms, restaurants and parts of the casino floor for renovations.
In its 2010 earnings report, the Tropicana reported net revenue of $54.2 million, down from $77.4 million in 2009. The operating loss in 2010, excluding a large asset write-down charge in 2009, grew by $17.2 million to $43.8 million.
"The unprecedented and challenging global economic conditions of the last few years have negatively impacted our results," the company said. "Although there has been a slight increase in visitor volume to the Las Vegas market, consumer spending remains low."
In its earnings report, Tropicana stressed that the company would "continue to monitor expenses for additional opportunities for cost savings and operational efficiencies."
Overall, the Tropicana reported casino revenues in 2010 were down 25 percent to $25.6 million. Room revenue declined 15 percent to $19.8 million, while food and beverage revenue dropped 39 percent to $10.4 million in 2010.
The privately held hotel-casino attributed its decline in room revenue and food and beverage revenue to closures tied to the renovation of the Strip property.
"We have been operating at a loss ... since we commenced operations on July 1, 2009."
The company cautioned that corporate spending on conventions remains at "levels lower than experienced in the past in response to the current global economic conditions. These and other uncertainties have and could continue to adversely affect our results of operations."
Tropicana in its filing Wednesday stressed the additional supply of hotel rooms would keep depressing room rates. Since December 2009, Las Vegas has seen an influx of 7,440 hotels rooms with the opening of CityCenter by MGM Resorts International and The Cosmopolitan of Las Vegas.
"The increase in hotel room inventory has resulted in increased competition leading to a lower average daily room rate and hotel occupancy which translates into lower room revenue."
The Tropicana Las Vegas expects the $147 million renovation project to be completed this summer. The renovation, which was launched in July 2009, included updating more than 1,300 rooms and suites, remodeling the casino, a new design for outdoor signs and the facade, a reconfiguration of the pedestrian bridge between the hotel and MGM Grand, and renovations of the convention center and pool.
The hotel is in the process of completing Club Nikki and Nikki Beach Club, opening a poker room, and the casual dining South Beach Market Place venue. Meanwhile, the property is now home to a Cantor Race and Sports Book and the new Las Vegas Mob Experience attraction.
Onex Corp., an investment firm in Toronto, and gaming executive Alex Yemenidjian acquired the Tropicana in 2009 when the property was in Chapter 11 bankruptcy. The Tropicana, originally built in 1957, was forced to file Chapter 11 in May 2008 after it received a default notice from Credit Suisse Group, the agent for its lenders, on a $1.3 billion credit agreement.
Contact reporter Chris Sieroty at email@example.com or 702-477-3893.