Cosmopolitan of Las Vegas Continues to Post Heavy Losses

Opened last winter, the Cosmopolitan was designed to be an upscale, hip new resort on the Las Vegas Strip – one of the signs of recovery from the economic downturn that had taken its toll on the gambling sector. But so far, the Cosmopolitan has struggled to bring in profits, especially in its casino.

The Cosmopolitan reported a loss of $54.3 million during the second quarter of 2011, bringing in a total of $126.1 million in revenue. Of that, over $70 million came from the restaurants and bars in the hotel-resort; just $28.1 million in revenues came from the casino.

That number is surprisingly low, considering the 1,500 slot machines and nearly 80 table games in the casino. In fact, Cosmopolitan officials said that the casino won slightly less money than would be expected given the amount of wagering that took place during the quarter, so some of the poor showing can be attributed to bad luck.

Still, the casino is likely producing revenue well below expectations, and the Cosmopolitan plans to take steps to attract more big spenders to their tables. In November, the hotel will be opening a high-limit area that will feature 15 new tables in the hopes of brining high rollers into the casino.

There are bright spots for the Cosmopolitan. Hotel rooms made the resort over $46 million during the quarter, and the 91% occupancy rate was higher than the average for the Strip – especially impressive given the higher-than-average rates the rooms command. In addition, the total loss was down slightly compared to the first quarter, when the Cosmopolitan lost nearly $57 million.

While the hotel first opened last December, the Cosmopolitan is still not completely open for business. Over 400 rooms in the west tower have not yet opened, though they are expected to be offered to visitors in September.

The Cosmopolitan is owned by Deutsche Bank, and cost $3.9 billion to build. It includes nearly 3,000 hotel rooms and significant retail, restaurant and convention spaces.