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Cosmo Only Loses $19M this Quarter

Discussion in 'LV Strip Hotels & Casinos' started by Huddler, Nov 9, 2013.

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  1. Huddler

    Huddler VIP Whale

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    LAS VEGAS REVIEW-JOURNAL
    The Cosmopolitan of Las Vegas reported a third-quarter loss Friday, but the Strip resort continues to inch toward profitability as casino revenues almost doubled year-over-year. The $3.9 billion Strip resort said it lost $19.4 million in the three months ended Sept. 30, compared with a loss of $34.3 million in the same period a year earlier.

    Casino revenues continued to trail food, beverage and hotel revenue. But, the $44.3 million in casino revenues, was up 96.9 percent from the $22.5 million posted in the third quarter of 2012. The company attributed the increase to its table hold percentage of 16.1 percent, which easily surpassed its expected range of 10 percent to 14 percent.

    http://www.reviewjournal.com/business/cosmopolitan-quarterly-loss-narrows-casino-revenues-jump-967-percent
     
    Last edited by a moderator: Nov 9, 2013
  2. Dean Martin

    Dean Martin VIP Whale

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    Wow...how do you stay in business losing that kind of money every qtr?

    Personally, I've never gone in there and have no desire to. Although the rooms looks cool, the reputation it has of being DB central will keep me away.
     
  3. Bommen

    Bommen High-Roller

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    Most people that tend to call it a DB central is grumpy old people that are annyoed by seeing other people having a good time so dont let that stop you from going over there to see for yourself. Sure the nightclub will bring in a few DB but that is how it is at any major casino with a popular nightclub with Wynncore probably being the worst since it has 3 top tier clubs. Its a beatiful casino filled with beatiful people who tend to dress up a lot more then they do at other properties.

    For me its always a lot of fun in the casino with great dealers(a lot of them moved over from Wynncore) and great bartenders and imo the best drinkservice on the strip. Also the restaurants and bars are great and Cosmo has now become one of my two homebases while in Vegas, Encore being the other.
     
  4. billyinpg

    billyinpg Low-Roller

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    WOW........

    That is almost exactly what I was going to post word for word after reading 3/4 of the article.

    The only other thing that caught my eye was that the casino was up nearly 100%. This little tidbit makes me wonder if it's really all bottle service and general ******baggery that brings in the money or is :gasp: gambling making a comeback.
     
  5. Kickin

    Kickin Flea

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    That's like half the publicly traded companies in the country :poke:.

    Keep in mind though that net income can be largely an accounting loss so you can stay in business for a long time even without raising more capital.

    Those growth numbers are actually pretty good and they're not far from finally being profitable. The big red flag in my opinion is that food/beverage revenue is down. The nightclub revenue is part of that and this is the place that was betting all its marbles on the idea that it would capitalize on that part of the business.

    If I were a lender I'd want to get to the bottom of why that particular number was so weak.
     
  6. billyinpg

    billyinpg Low-Roller

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    I assure you I am not a grumpy old person and I love to have a good time and others having a good time is what I relish, but I will say this.

    If a property and I am not going to single any of them out get's a reputation I am not very likely to patronize it. There are a couple or maybe more that have the DB reputation, that doesn't interest me one tiny bit. If the DB crew want to congregate somewhere where they can act like they do then I am all for it, Just don't expect me to ever darken the door and contribute to anything that goes on at the property.

    Just to put it into perspective.....

    Last trip we had dinner at a property steak house. We were dining and along came a trio of DB, NBA shorts, tank tops and backwards flat billed ball hats. They were served no questions asked and the DB was strong with the trio.

    I did not complain, I just paid the bill and we left but we did make note to never ever patronize the venue again. In our mind if that's the crowd the want they can have them.

    Here's the deal, yea Vegas right now might be the the DB central but all it takes is time. The rest of us will stay home more and gamble near home more and when the DB abandon Vegas which they will do, onto the next big thing and all. Well then Vegas will be left wondering where they went wrong, maybe not all of Vegas but there will be a part of it for certain.
     
  7. blackjacknut

    blackjacknut VIP Whale

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    I'm not a fan of Cosmo...or the business trend of Vegas. However the marketing folks in Vegas (which by the way has some of the top talent in the world), are capitalizing on a market segment right now that is hot. This market segment is the DB's of the world. Vegas in general is catering to this market segment right now with the bars and nightclub scene. Just like Vegas tried to cater to families a few years ago. It is all cyclical and will change over time. In the meantime there are still plenty of places that you can escape the DB's of Vegas...so choose the places you like, just like the DB's will choose their places.
     
  8. sco5123

    sco5123 VIP Whale

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    I just admire Cosmopolitan for capturing some of the magic found only at Wynn (or former Wynn--before renos) properties. And they do so in an entirely different way. It's uniqueness and whimsicalness, mixed with elegance and charm, is truly exciting.

    I have not been following them financially, and I am not sure how most of these properties continue to do business in the financial disarray they are in. But of one thing I am sure, I feel personally encased in a diamond when I walk into Cosmo.
     
  9. UKFanatic

    UKFanatic The Arbiter of Taste Caviar Kid

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    I don't get it. What did they do that offended you so much?

    There are DB at every single Vegas Strip property. Every one. From the highest levels at Wynn to Casino Royale. I have personally seen them everywhere. For me, drunk assholes are much worse. As long as the DB are not bothering me and are having a good time, let them do what they want. The money they spend helps keep vegas going. I guess I just don't see what a trio of guys who dress differently than you do did to make them DB.

    If by DB you mean a party crowd, then yes, that crowd is at Cosmo. But no more so than several other Strip properties. if by DB you mean younger people that wear urban fashion and clothes, then yes, that is also at Cosmo, along with everywhere else on the Strip
     
  10. Kickin

    Kickin Flea

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    Well that's why the f/b decline is a red flag. If you're a lender you would need to know if this segment, which is their largest and most marketed, is softening.

    There is something else I'd raise questions about if I were across the table from them. This gaming revenue growth is huge quarter-over-quarter (qoq), but if you look at Q3 2012 that was an extremely weak number, so they are comparing it to a small base. And last quarter was extremely weak compared to Q2 2012 qoq. Suddenly Q3 is an outlier. So they are either experiencing larger than normal variance, had a big change to their business model in Q3, or there may be some change in revenue recognition which is important to find out about if you're a lender because that may be tied to some performance metrics in their loan covenants.

    As with most things, the devil is in the details....
     
  11. billyinpg

    billyinpg Low-Roller

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    If I am going to drop $300+ for dinner I would expect just a little decorum, just a little. Again I won't mention the property but when they allow and serve three wanna be "gangstas" dressed as I've described complete with some form of "gangsta" hand signs and outdoor voices well that does it for me. I don't know about you but I don't care to be entertained about stories of "bitches" while I am trying to have a nice dinner with my girl. The worst of it was (to me) that the young men who were acting this way would probably die on the spot if they were confronted by a real "gangsta"

    That sort of behavior I would expect in the mid strip McDonalds but not where I was.

    That property lost my business and probably for good, I'll try another and another until I find one that is in line with what they represent.

    Maybe I am way out of line but good god does not anyone not dress for a nice dinner anymore?
     
  12. Bommen

    Bommen High-Roller

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    I agree that you should dress nice when going to nicer restaurants and bars. I think thats another reason i prefer Cosmo and Wynncore since thats were people are most well dressed in general out of all the strip casinos. But unfortunately as someonelse already mentioned you cant really avoid this issue at any strip casino.
     
  13. wishman35

    wishman35 VIP Whale

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    Cosmo has definitely become my go to property especially if travelling with the lady. The bars are the best on the strip, they comp high quality drinks for minimal bar top play, the rooms are some of the best, Marquee is free on Friday night for hotel guests, the location is probably one of the best, fantastic bartenders, no liquor from soda guns, Secret pizza, and they sometimes offer fantastic promotions like the B1G1/50% off each night deal they just had a few weeks ago. I am staying at Cosmo on this trip for less than what the price of everything on the Strip except for the Quad right now.

    D - bags? You get those on the weekend at lets see.. Wynn, PHo, Bellagio, MGM, Aria, Flamingo...okay I think we get it. EVERYWHERE. Its Vegas and that is just how it is.
     
  14. xmarksx

    xmarksx VIP Whale

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    I suppose I could be now categorized as old by many, I am 51, but doubt anyone would say I am grumpy. I wanted to stay at Cosmo and stopped by the hotel on a Saturday in October to have to have a drink, it was about 11:00 PM. I love the look of the place, however, I doubt we ever book a room. The place was full of 20 something's waiting to get into some club function, they were a pretty nice crowd but I noticed the casino was almost empty. So instead of a natural dispersion of casino to club to lounge to restaurant patrons you had just a giant group of club goers milling around. We enjoyed it and bought some take-out art from one of the cigarette machines but I will not be booking a room there.

    Bottom line, they are not targeting my demographic. It's not that I am grumpy, it's simply that I do not feel welcome in the place. Can you market multiple segments making them feel welcome? Yes, Wynn, Palazzo, Mandalay Bay...

    Could this be the first crack in the thin veneer of truth surrounding a larger lie? That super clubs are driving obscene profits for hotels and gaming has become secondary? It appears Cosomo now needs gaming, how odd!
     
  15. UKFanatic

    UKFanatic The Arbiter of Taste Caviar Kid

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    FWIW, when I had dinner with my host at Cosmo last month, she told me that there had been a lot of recent change sin marketing personnel and principles. I didn't press her too much, but she relayed that the marketing was run by bankers that kind of handcuffed all the marketing personnel. She said that has now changed and she seemed to think it was for the better. So maybe that explains it.

    I did notice that the casino seemed busier than my past visits there (which admittedly were few).
     
  16. Huddler

    Huddler VIP Whale

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    I just checked VPfree2 and apparently the Cosmo has dramatically upgraded their video poker pay tables within the past week or so. That is a good sign!
     
  17. tex55

    tex55 Low-Roller

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    I really supported Cosmo when it first opened - set up a credit line, gave them a good deal of table play, and some VP. Love the drink service at the tables - attractive women serving strong drinks. I even found table games management to be friendly and attentive.

    However, their comps have been minimal to non-existent, so I have not been there the last two trips. I really believe management's focus is on dining and the club scene. Wish it would change, such a beautiful place.
     
  18. Funkhouser

    Funkhouser In Charge of the Big Door

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    That's an unfair statement. I am a pretty laid back guy, enjoy meeting other people, gaming with them, and having a good time. I do see a lack of common mannners from the younger crowd, and disregard for common courtesy towards others. This is what I consider the DB factor, or the following:
    1) Fall over sloppy drunk in casino and tables, to the point of people bumping into you spilling alcohol on you, being lewd or crass towards other guests, and obnoxious at gaming tables towards dealers or other players.

    2) Lack of courtesy toward other hotels guests, especially when coming it after a late night of drinking. I get it people want to cut lose have a good time, maybe entertaining guests back in your room. But when its 3am and your cranking up the tunes and partying after leaving the club, its a lack of common courtesy to others staying in the hotel.

    3) Congregating on gaming machines and in public areas before and after getting into clubs when your not playing the gaming on machines or patronizing the bar areas, to the point you become an obstacle to other guests visiting the property.

    The Cosmo has ALOT of this on the weekends. Wynn has made efforts to keep it under control.
     
  19. Kickin

    Kickin Flea

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    These are actually very interesting developments when you think about it. Cosmo would see any softness in numbers well before they were released. With the weakening food & beverage i.e. nightlife numbers I wonder if that helped motivate them to make the decision to focus more on bringing in gamblers over the last quarter. You also have the recent interview with that AMG exec who talked about how the club crowd were good customers for the clubs but lousy customers for the hotel and everything else, seems to be a bit of an attitude shift. Maybe by sometime next year we'll be talking about Cosmo being a good place for gamblers. :wink2:
     
  20. wigwam_salesman

    wigwam_salesman VIP Whale

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    My 2 cents is it seems insane to refuse to go in somewhere because you have heard it is bad. It's free to walk it, at least take a peek. You might end up loving it.
     
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