The Cosmopolitan of Las Vegas posted a net loss for the year as the luxury resort continues to attract customers to its restaurants, clubs and retail shops but still struggles to produce strong casino revenues.
The Strip hotel-casino on Friday reported that it posted a net loss of
$106.5 million for 2012, up from the
$96.9 million net loss posted in 2011. The hotel generated $124.18 million in casino revenue last year, a modest increase from $107.38 million in 2011.
For 2012, the Cosmopolitan’s hold percentage from gaming was 9 percent, which was below the company’s expected range of 10 percent to 14 percent. The $3.9 billion resort has worked to increase the amount of table games play in the casino and operates an additional 15-table, high-limit gaming area, The Talon Club.
“We also continue to focus our efforts on increasing the volume of slot play through leveraging our unique Identity program, building our database of slot customers and expanding our alliance program,” The Cosmopolitan’s parent company, Nevada Property 1 LLC, said in an earnings report filed with the Securities and Exchange Commission.
Despite the net loss, revenues were up in every business category. The resort’s balance sheet was hurt by increased promotional and operating expenses.
The resort earned $240.06 million in hotel revenue for 2012, up from
$178.4 million in 2011. Average daily room rate and occupancy for 2012 was $259 and 85.6 percent, respectively, generating revenues per room of $222. In 2011, average daily room rate and occupancy was $237 and 84.3 percent, respectively, which generated revenues per available room of $199. Food and beverage revenue again topped the earnings chart, generating $306.2 million, compared with $258.4 million in 2011.
Entertainment revenue was $33 million last year, up from $24.6 million in 2011. Net revenues jumped $116.5 million year-over-year to $595.1 million.
“We believe our corporate strategy has put us on the right trajectory, as demonstrated by our occupancy, room rates and overall performance,” said Amy Rossetti, vice president of public affairs at The Cosmopolitan.
The Cosmopolitan posted earnings before interest, taxes, depreciation and amortization of $52.3 million last year, compared with a loss of $41 million in 2011. “We are extremely pleased to see our unique approach to the Las Vegas market translate into the strong numbers reflected in our earnings report,” Rossetti said. “Our 2012 financial performance affirms that The Cosmopolitan of Las Vegas brand and guest experience continue to resonate.”
As of Dec. 31, the property had
$48.8 million in available cash. Cosmopolitan officials expect to draw down on their $3.9 billion credit facility with Deutsche Bank to finance $70 million to $80 million in renovations this year, according to the earnings report. The resort, on 8.5 acres between CityCenter and Bellagio, opened on Dec. 10, 2010.