Hard Rock revenue plunges
The Hard Rock Hotel has posted its largest quarterly percentage drop in revenue since the niche property was bought by New York-based boutique hotel operator Morgans Hotel Group Co. in February 2007.
The 14.1 percent revenue decline reported in a federal filing was due to a slowdown in consumer spending and customer disruption from the $760 million expansion scheduled to be completed late next year.
"Management believes that the disruption to parking due to the construction of the expansion project has had a negative impact on patron visitation," the Friday filing read.
The property, on the corner of Harmon Avenue and Paradise Road, reports its earnings because of a large debt load, which is publicly traded.
The Hard Rock Hotel posted a net loss of $22 million for the quarter ended Sept. 30 because of the decline in revenue and a $20.8 million interest payment.
The loss is an increase from the $15 million loss posted during the same three-month period last year.
Quarterly revenues slid 14.3 percent to $45.8 million from $53.4 million.
It marked the second consecutive quarter of double-digit, year-to-year revenue declines following a 10.3 percent drop in the second quarter.
Revenues the first nine months of 2008 slipped 9.8 percent to $135.5 million from $150.3 million in 2007.
The hotel-casino is privately owned by Morgans and private equity firm DLJ Merchant Banking Partners.
Morgans, which is publicly traded on the Nasdaq National Market, owns 20 percent and collects a property management fee. Morgans shares fell 19 cents, or 4.55 percent, Tuesday to close at $3.99.
Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.
