Tuesday, Nov. 20, 2001 | 10:52 a.m.
Locals casino operator Coast Resorts Inc. posted strong increases in net income, revenues and cash flow for the quarter ending Sept. 30, thanks to the Suncoast hotel-casino near Summerlin.
The company also disclosed the purchase of 50 acres on Las Vegas Boulevard, well south of the Strip casino district, for eventual development of a locals' casino.
In contrast to the struggles of the Strip's largest operators -- and Station Casinos Inc., Coast's most powerful competitor -- Coast's net income soared 178 percent to $8.73 million during the quarter.
Net operating revenues increased 33 percent to $128.2 million, while cash flow rose 41 percent to $30 million.
These strong increases were entirely the result of the $200 million Suncoast, which opened in mid-September 2000. That means the year-ago quarter contained but a few weeks of results from the western Las Vegas casino, creating a more favorable comparison for Coast.
By comparison, Coast said its three other Las Vegas properties -- the Orleans, Gold Coast and Barbary Coast -- reported "relatively flat" revenues compared to last year. Barbary Coast, located on the Strip, took a hit across the board as foot traffic on the Strip declined following Sept. 11, Coast said. Hotel business fell off at the Orleans, Gold Coast and Suncoast following Sept. 11, but revenues from gaming and food and beverage were largely unaffected, the company said.
Casino revenue rose 38 percent to $96.4 million, food and beverage revenue increased 30 percent to $26.3 million, and hotel revenue was up 16 percent to $9.3 million.
Hotel occupancy companywide was 88.6 percent for the quarter, down from 95.3 percent in the year-ago period.
"With the continued uncertainty due to the economic downturn at the impact on tourism of the September terrorist attacks, we expect that occupancy levels will remain soft for November and December," the company's quarterly report said.
Still, Coast appears optimistic about the future. The company disclosed in the quarterly report that it recently acquired a 50-acre land parcel at the southwest corner of Las Vegas Boulevard and Silverado Ranch for $50 million. Located six miles south of Tropicana Avenue, the land parcel is well south of the Strip.
That means the new casino would be locals oriented, not a tourist property, said Coast President Harlan Braaten.
"There's quite a bit of housing development to the east of that site," Braaten said. "To the south, there's not very much development yet. (Development would start) when we see enough rooftops in the area."
Braaten believes that might take only two or three years.
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