Tropicana reports wider loss in quarter amid renovation

By Steve Green

Friday, Nov. 12, 2010 | 2:09 p.m.

Revenue slumped and the loss widened during the third quarter at the Tropicana hotel-casino on the Las Vegas Strip as its owner continued to pump tens of millions of dollars into a renovation there, the Tropicana reported today.

Net revenue of $13 million was down from $18.8 million during the third quarter of 2009 and the property lost $11.3 million vs. a loss of $9.6 million in the year-ago quarter.

Owned by investors led by Onex Corp. of Toronto and gaming executive Alex Yemenidjian, Tropicana Las Vegas Hotel and Casino Inc. today said net revenue was off 30 percent in the third quarter because of disruptions caused by the renovation as well as reduced consumer discretionary spending.

Casino revenue was off $2.5 million in the quarter vs. the 2009 period while room revenue fell $700,000. Some 100 hotel rooms were closed in the quarter in preparation for demolition. However, average daily room rates increased from $53 to $56 thanks to the remodeling of 500 rooms in the Paradise Tower and 400 rooms in the Island Tower.

The Tropicana today said that through Sept. 30, $78.6 million of the planned $147 million in renovations had been completed involving the hotel rooms, casino, restaurants, bars, convention center, pool area and Nikki Beach nightclub.

Onex and its co investors last year acquired the Las Vegas property, when it had 1,772 rooms, out of the Tropicana Entertainment Holdings LLC bankruptcy.

Tropicana Las Vegas today noted it remains in litigation with investor Carl Icahn's Tropicana Entertainment Inc., which also was spun out of the bankruptcy, over the Tropicana trademarks.

Tropicana Entertainment insists it controls the trademarks and that the Las Vegas property should pay a licensing fee -- the Las Vegas property contends it shouldn't have to pay to use its longtime name.

"Discovery is ongoing, and the company therefore cannot express an opinion at this time on the outcome of the case," Tropicana Las Vegas said in today's quarterly financial report.