Harrah’s Lake Tahoe experiences 3 percent drop
In line with northern Nevada casino trends, Harrah’s Lake Tahoe experienced a 3 percent drop in revenues for the second quarter.
The earnings report released by Las Vegas-based Harrah’s Entertainment Wednesday showed a slower period for the region, despite gains in other regional properties.
Harrah’s officials point to issues affecting consumer confidence as possibly the reason for the dip in the financial barometer for northern Nevada – down to $78.1 million. Southern Nevada properties posted an 11 percent gain in revenue. In particular, revenues for Harrah’s Las Vegas rose 13.9 percent.
The themes are common ones for the decline in business at the northern end of the Silver State – the floundering California and national economies, the tribal gaming impact in which some facilities are expanding as well as high energy costs.
When economic factors cut into players’ discretionary income, they don’t travel as much, Harrah’s officials cited.
“While we still get the retail players, perhaps they’re not making as many trips,” Harrah’s Lake Tahoe spokesman John Packer said.
He points to the dot-com companies own earnings going south due to the noticeable decline in untracked play. This is walk-up business that’s not monitored through the Harrah’s Rewards program, which rewards loyalty between properties.
“We’ll just have to adjust and adapt,” Packer said of the casino taking a pro-active role.
The casino has already incorporated added promotions in the quarterly marketing plan this summer. It plans to give away a BMW roadster September 30 in its Cash and Car Craze promotion.
“Probably in a normal year or summer, you wouldn’t see those types of promotions in the summer,” Packer said. “But we’re just not going to wait for summer to take care of itself.”
“What we’re seeing is an extraordinary reduction in retail business,” Harrah’s Entertainment spokesman Gary Thompson told investors in a conference call.
Using Lake Tahoe as an example, Thompson noted significant reductions in hotel bookings, skiers who may play the tables and slots after a day on the slopes and the motoring traffic crossing the state line as a signal of tough times in Northern Nevada.
Companywide, the nation’s third largest casino operation posted a record quarter for the period that amounted to $914 million in revenues, up 4.3 percent from last year in the same period.
The company also reported second-quarter earnings per share that rose 23 percent from last year’s 40 cents to 49 for the same period in 2001.
“While many companies would be pleased with a 22.5 percent increase in earnings per share – especially in today’s economy – we were disappointed that our second-quarter gains were lower than anticipated when the quarter began,” Harrah’s Entertainment Chief Executive Officer Phil Satre said in a statement.
The casino company noted second quarter highlights that should bode well for Harrah’s in the third quarter, when Satre said the company still plans to close on the Harveys Casino Resorts acquisition.
Other achievements in the second-quarter, Harrah’s brought ‘The Price is Right’ video slots to players and developed a partnership with ShopNBC shopping network. It also received the distinction as one of Computerworld’s top five of America’s 100 best places to work in information technology, along with several “Best of Gaming” awards from Casino Player magazine.
To help run the show, Harrah’s also named Chief Operating Officer Gary Loveman to the position of president and promoted Treasurer Chuck Atwood to chief financial officer.
Harrah’s Entertainment Inc. operates 21 casinos in the United States under the Harrah’s, Showboat, Players and Rio brand names.
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