|ALADDIN LOOKS TO NEW YEAR
Monday, November 20, 2000
By DAVE BERNS
lasvegas.com GAMING WIRE
LAS VEGAS - A reconfigured slot floor, the high-end
casino and increased convention business have boosted recent results
at the 3-month-old Aladdin.
But the financially troubled Strip resort continues to
the results of its initial 44 days of operations, numbers that were
solid during the property's first three weeks but poor in September.
"September is always a very dicey month simply because
back-to-school aspect," Aladdin Gaming Chief Executive Officer
Richard Goeglein said during a Monday conference call with investors
and bond analysts.
The megaresort's parent company, Aladdin Gaming, is scheduled
make a $5 million payment to bank creditors at the end of December
followed by an $11.7 million interest payment on Feb. 1.
"Obviously with the tight liquidity, the operations need
relatively well going forward," said Aladdin Gaming Chief Financial
Officer Tom Lettero. "We need to have a strong New Year's and a
strong January in front of that interest payment."
The Aladdin opened Aug. 18 and, during the period ended
the megaresort reported negative cash flow of $3.2 million on net
revenue of $36.8 million, according to figures reported by the
company last week to the federal Securities and Exchange Commission.
The privately held hotel-casino was financed, in part,
debt, prompting last week's SEC filing and the Monday conference call.
The $1.4 billion property reported a net loss of $40.2
gross revenue of $40.6 million for the third quarter.
The Aladdin's 135,000-square-foot casino generated revenue
million and its 2,567 hotel rooms saw an occupancy rate of 77 percent
at an average nightly rate of $130.
"We recognized as all of our predecessors had experienced that
fact were going to be in a ramp-up period," Goeglein said, referring
to the May 1999 opening of The Venetian and Paris' September 1999
The Aladdin Gaming chief executive officer noted that October's
numbers were "quite good" with hotel occupancy at 94 percent and the
average nightly room rate at $135.
Goeglein said a survey of nearby casinos placed Paris'
occupancy rate at 96.5 percent with a nightly room rates of $136;
Bally's at 94 percent and $100; and Bellagio and The Venetian at 90
percent and slightly below $180.
The Aladdin's initial weeks were plagued by operational and
construction glitches that led to the removal of about 250 aging slot
machines from the casino's main floor.
Oversized slot games now sit along the casino's walls,
blocking sight lines from the adjacent Desert Passage shopping mall.
A high-end slot area on the casino's main floor was moved
second-floor setting of the London Clubs' high-roller casino, which
Chief Operating Officer Bill Timmons said was cannibalizing that main
Meantime, the Aladdin has seen a decline in the full-time
equivalent of its work force from 4,500 to 3,500 positions "without
any layoffs of consequence" Goeglein said, with the bulk of the
decrease coming through attrition and the management of overtime.
As for the near-future, the Aladdin Gaming executives
and convention bookings look good, noting that the pre-Christmas
weeks are generally a slow time for Las Vegas hotels.
"We're very comfortable with where we believe the business
will be in the first quarter," Lettero said. "The question for the
company right now (is) as it ramps up for typically a very slow time
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