Hard Rock reports strong second quarter
The Hard Rock Hotel parlayed big-act entertainment and its table-game focus into a strong second quarter, according to results the property announced Tuesday for the period ended June 30.
Revenue, cash flow and net income were all up, with property executives crediting the increases to additional business generated by new marketing and entertainment spending.
“(Hard Rock Chairman Peter) Morton’s a smart guy,” Bear, Stearns & Co., casino industry analyst Jason Ader said Tuesday. “He understands his market. Mandalay Bay and the Palms and others have targeted his market niche, but he always figures out a way to keep his customers.”
Hard Rock net income jumped 58.9 percent to $3.7 million from $2.3 million, and operating cash flow, defined as earnings before interest, taxes, depreciation and amortization, was up 4.4 percent, to $9.7 million from $9.3 million.
Revenue was up 4.4 percent to $34.1 million from $32.7 million. Expenses also jumped, up 4.3 percent, to $24.4 million from $23.4 million.
The property reported that it spent an additional $600,000 on marketing and entertainment expenses during the quarter, funding a new national advertising campaign and concerts by groups like the Eagles.
“We believe that the marketing and entertainment expenditures will more than pay for themselves through increased awareness of the property,” Morton said in a statement.
Hard Rock President Don Marrandino said the Hard Rock had a great quarter.
“Our table UFA game business continues to grow,” Marrandino said. The property generates two-thirds of its gaming revenue from its 100 table games, with the remaining third coming from 600 slot machines.
The table-game share of the Hard Rock’s revenue is believed to be the biggest in the city, with many properties almost reversing the ratio.
Marrandino expects a scheduled summer installation of about 360 new International Game Technology EZ-Pay ticket-in/ticket out machines to improve the slot floor’s performance.
Food and beverage revenue was up 6.7 percent, to $5.6 million from $5.2 million, while hotel revenue dropped 8 percent to $1.8 million from $1.9 million.
Marrandino said hotel room rates and occupancy remained relatively constant.
Hard Rock executives have some new changes planned for the property, he said.
New banquet space, a few new high-roller suites and a few new floors on top of the parking garage are on the drawing board, Marrandino said, although he declined to say when the new features would be built.