CASINO

Is the minibar the cure for Atlantic City’s Q3 profit plunge?

TAGs: Atlantic City, Q3 2010

atlantic-city-q3-profit-plungeThe third quarter is supposed to be a casino’s best earnings period, what with the summer holidays and all, yet Atlantic City’s Q3 earnings have declined for five straight years. Operating profits at the city’s 11 casino properties plunged 24.3% to $209.8m, with the Atlantic City Hilton Casino Resort and Resorts Atlantic City posting particularly harsh results.

The Hilton lost $4.7m, boosting its overall 2010 loss to $19.1m. Resorts lost $2.9m, for a $13.7m deficit throughout the first nine months of the year. The other casinos did manage to post slim operating profits, although even the best of these (the Borgata with $55.9m) was off 19.6% from 2009.

On the plus side, non-gaming revenue was up 8.3%, spurred by a 16.5% surge in hotel room billings. The occupancy rate actually fell to 92.7% (from 93.6% last year), but the average nightly rate was $6 higher in 2010. Over the first nine months of 2010, non-gaming revenue is up almost 10%, and room billings up 20.8%. Compared to 2006, AC’s peak year for overall revenues, non-gaming revenue is up almost 20%. Still, they’ll have to sell a whole lot of overpriced almonds and Toblerones out of that minibar before they’ll get back to anything the faded gambling destination regards as ‘normal’.

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