All casinos’ on the Las Vegas Strip are being punished by the recession and excessively empty rooms in each casino. The Las Vegas Hilton is a perfect example of this punishment as shown in their third-quarter financial statements. The company continues to lose money due to lower revenue.
The Owners Of The Las Vegas Hilton
Colony Capital, LLC of Los Angeles and Goldman Sachs are the partnership that owns the Las Vegas Hilton. They claim to have lost $14.796 million in the third quarter which ended September 30th. One year ago they showed a loss of $13.168 million. Overall, net revenue further fell from $44.3 million to $39.5 million.
Also, casino revenue declined by 18.4 percent to approximately $15 million because of the decrease in table game and slot- activity. Hotel room revenue fell to $15.2 million due to a decline in rented rooms. Overall, the Las Vegas Hilton contains 2,950 rooms. Additionally, food and beverage revenue dropped by 9.1 percent to $12.9 million as a result of decreasing convention business.
Adding Capital
Since 2008, the Las Vegas Hilton has accumulated $58 million in losses. Luckily on July 30th, 2010, the company received amendments and $22 million in additional credit under the $230 million term loan from Goldman Sachs. The agreement involves Hilton executives adding $20 million worth of capital. This will allow them to meet debt deadlines, make capital improvements, and fund operations.
Economic Conditions
Hilton representatives blame the decline on the economic recession inflicting the United States as well as fierce competition. Although Las Vegas had an increase in visitation and gaming win among the casinos, the Hilton Las Vegas was considerably hurt by market fundamentals.
Las Vegas Numbers
In the City of Las Vegas, there are 148,402 hotel rooms which are up 5 percent from 2009 because of the opening of the CityCenter project. However, citywide hotel room occupancy decline by 1.1 percent to 82.1 percent in the third quarter. With the opening of the Cosmopolitan in December, the occupancy rate will continue to be stressed. The Cosmopolitan has 2,000 rooms with an additional 995 being added in 2011.
Las Vegas remains on a plateau. The city is seeing slight increases in visitation and gaming revenue but not enough to pull casinos out of debt. Hopefully, once the United States is out of the recession, hotel rooms will fill, players will gamble and the casino properties will get back on their feet.