The $1.5 billion Venetian Casino Resort on the Las Vegas Strip today reported lower earnings for the second quarter but said it is managing the high-end property more conservatively by controlling costs, booking its 3,036 hotel rooms with more convention-goers and becoming more selective about high-roller wagers.
Venetian owner Las Vegas Sands Inc., controlled by entrepreneur Sheldon Adelson, reported a second quarter loss of $44.2 million compared to net UFA income of $400,000 for the same period a year ago. This year’s loss includes a loss on early retirement of debt of $42.8 million.
Revenue for the second quarter was $128.2 million, compared to $137 million for the same period a year ago.
The decline in revenue was primarily due to lower average daily room rates at the hotel and increased selectivity of high-end gaming play, Las Vegas Sands President and Chief Operating Officer William Weidner said.
Cash flow increased 7.4 percent, from $41.8 million in 2001 to $44.9 million. Cash flow — defined as earnings before interest taxes, depreciation and amortization — is a key indicator of casino performance.
Operating costs declined by $12 million in the second quarter, primarily due to better control of casino marketing costs. Promotional allowances also dropped during the quarter compared to a year ago, the company said.
The company accomplished the refinancing of all of its debt in the second quarter, Weidner said.
“The refinancing of our debt provided us with lower interest rates, the funds to add 1,000 rooms to The Venetian to meet unfilled room demand, the flexibility to pursue growth opportunities in Macau and other jurisdictions, added liquidity and a simplified capital structure.”
The daily average room rate at The Venetian was $196, compared to $213 for the year-ago quarter, primarily because of lowered June rates in the wake of …