Will Blackstone be able to make a long-term success of a property that tries to appeal to fickle guests out to enjoy the latest thing?
For the first time since opening in 2010, The Cosmopolitan hotel-casino posted a quarterly profit.
The Las Vegas Strip high-rise earned $15.3 million during its second quarter compared to losing $13.6 million a year ago.
An affiliate of private equity firm Blackstone bought the 1,998-room property that sits on the north edge of the CityCenter complex in December for nearly $1.73 billion.
The property’s financial filing showed the company cut expenses by nearly 17 percent in the three month period including less spending on advertising and marketing.
The Cosmopolitan noted a July 25 fire that ripped through fake palm trees and cabanas on its outdoor pool deck on the 14th floor before being quickly doused by firefighters, saying they don’t expect the damage costs to be significant and believe insurance will cover it.
While the company earned 20 percent more in its casinos, revenue dropped at its bars and restaurants, shops and entertainment venues. The company says it hosted 13 entertainment events this quarter compared to 24 a year ago and its Marquee nightclub, where revenue dropped by $3.1 million, faced increased competition. Restaurant Comme Ca closed and the hotel-casino saw less business at Rose. Rabbit. Lie. since changing the concept.
Hotel revenue dipped slightly on lower occupancy with the company offering fewer free rooms to less lucrative gamblers.
The company also settled multiple lawsuits during the quarter costing it at least $21.5 million that would be reflected in earlier quarterly results, according to the financial filing.
Last July, Spiegelworld CSC LLC ended its Vegas Nocturne show at The Cosmopolitan’s Rose. Rabbit. Lie. and sued The Cosmopolitan alleging breach of contract. In May, the two sides settled for an undisclosed amount. The Cosmopolitan said neither side admitted wrongdoing.
In the financial filing, the company said it settled two lawsuits filed in 2012 for wage and hour violations after workers alleged they weren’t paid for the time it took to put uniforms on and take them off, among other complaints, for $7 million. The Cosmopolitan said the settlement is pending court approval but the settlement amount would be reflected in its first quarter results.
It also agreed to settle a 2012 lawsuit alleging the company secretly recorded phone calls for $14.5 million, pending court approval. That amount would be reflected in the company’s fourth-quarter results from 2014.
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Photo Credit: A more subdued scene at the glitzy Vegas property. Cosmopolitan Hotel