Parent of Stratosphere, Arizona Charlie’s sees increases in revenue, cash flow

American Casino & Entertainment Properties LLC rode a strong quarter at its Stratosphere property to a 5.3 percent increase in revenue and a 15.9 percent climb in cash flow.

The company, which operates the Stratosphere and two Arizona Charlie’s properties in Las Vegas and the Aquarius in Laughlin, on Wednesday reported $89.3 million in consolidated net revenue for the fourth quarter, which ended Dec. 31. That compared with $84.8 million for the same period in 2014.

The company reported net income of $3.3 million for the quarter compared with $200,000 a year earlier, a period affected negatively by asset disposal.

ACEP, headed by CEO Frank Riolo, has reported year-over-year increases in net revenue in each of the company’s last eight quarters, and year-over-year increases in adjusted cash flow in seven out of eight quarters.

Riolo and chief financial officer Ned Martin said in a conference call Wednesday that the Stratosphere’s fourth-quarter net revenues increased 13.8 percent over the previous year with hotel revenue up 23 percent, casino revenue climbing 16.6 percent and food-and-beverage revenue up 8.6 percent. Riolo attributed the jump in hotel revenue to a 9.4 percentage point spike in occupancy rates and a 12.4 percent increase in the average daily room rate. Higher slot and table game play drove casino revenue.

The only blemish in the Stratosphere’s results was a 7.8 percent decline in tower revenue. Riolo said a high number of bad-weather days and increased thrill-ride competition in Las Vegas hurt the tower’s SkyJump attraction.

But the Stratosphere’s performance offset declines at the Arizona Charlie’s properties and the Aquarius.

Fourth-quarter net revenue had a combined decline of 0.9 percent at the Arizona Charlie’s Decatur and Boulder properties. Food and beverage and casino revenue both fell 2.4 percent with lower slot and bingo hold.

But hotel revenue was up 20.1 percent due to higher occupancy and room rates.

The Aquarius, the largest property in Laughlin, saw net revenue decline 3.1 percent from 2014’s fourth quarter as a result of lower occupancy rates and casino play. Riolo said occupancy may have suffered as a result of the company’s reluctance to reduce room rates to maintain its top-of-market position.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Find him on Twitter: @RickVelotta