Gaming industry analysts continue to have high expectations for The Cosmopolitan of Las Vegas. The multibillion-dollar resort was hailed as the next generation of Las Vegas hotel-casino when it opened Dec. 15, 2010, with singer/songwriter Mayer Hawthorne throwing a nine on a craps table.
The hotel-casino, now in business for 10 full financial quarters, is still operating in the red, although the property’s recent EBITDA, earnings before interest, taxes, depreciation and amortization figures point toward profitability, analysts say. “I’m happy with where we are,” Cosmopolitan CEO John Unwin said. “I’m never as happy as I want to be. But our trajectory is really good.”
Unwin said the hotel-casino continues to benefit from a changing Las Vegas market, which attracted more international visitors, more educated and younger visitors in 2012 than in prior years. He described The Cosmopolitan as the “strongest property in the market” in terms of non-gaming amenities. Unwin also expected growth in casino revenues this year to be “two times the market in table games and three times the market from slots. We are starting from a smaller base,” Unwin said.” I’m encouraged. We are getting our share of the growth in the market. We are going to get there.”
The Cosmopolitan continues to post quarterly increases across most of its business segments — food and beverage, revenue per room and average daily room rates. But the luxury Strip resort continues its struggles with casino revenues. The casino generated $30.64 million in casino revenues in the second quarter, compared with $38.66 million in the same period last year. The Cosmopolitan’s competition in the Las Vegas luxury market, Wynn Resorts Ltd. and Las Vegas Sands Corp., posted casino revenues of $142.6 million, and $105.1 million respectively.
“It sounds kind of obvious, but they’re having trouble with gambling,” said David G. Schwartz, director of the Center for Gaming Research at the University of Nevada Las Vegas. The Cosmopolitan operates a 110,000-square-foot casino with 1,376 slot machines and 101 table games, but Schwartz said gambling has never been a priority in The Cosmopolitan’s advertisements or marketing. Instead it has focused on food and beverage and entertainment.
The hotel-casino made a name for itself after opening by launching a provocative advertising campaign with the theme “Just the right amount of wrong.” The Cosmopolitan continued its campaign with a spot last year that told a poolside story to the lyrics of Queen’s “Bohemian Rhapsody.” In July, The Cosmopolitan rolled out a new ad with a mix of music, kinetic on-screen type and cryptic images. Some of those messages are “Correct is a mistake,” and “Misfit right in.”
This story originally appeared in the Las Vegas Review Journal.
