Philadelphia officials, hoteliers at odds over expansion goals (The Philadelphia Inquirer)9/19/2011 By Suzette Parmley, The Philadelphia InquirerMcClatchy-Tribune Regional News Sept. 17--
Lingering tension between convention and tourism officials and the Greater Philadelphia Hotel Association over how many new hotels the city needs to support the expanded Convention Center played out fully at this week's groundbreaking for the new Hotel Monaco. The four-star hotel of San Francisco's Kimpton Hotels & Restaurants is being built at Independence Mall. It brought to the forefront once again the debate over hotel development and how much is too much in a still-weak economy. Though city officials say hotels can't be built fast enough, the organization representing the region's hotel industry contends too many will further hurt existing hoteliers. "We certainly need more hotel rooms -- about 2,000 more," proclaimed Mayor Nutter, who appeared at Thursday's groundbreaking ceremony at the historic Lafayette Building at Fifth and Chestnut Streets, which is being converted into a Monaco. "This [new hotel] covers about 10 percent of that with 268 rooms." The hotel will open next summer. Jack Ferguson, president and chief executive of the Philadelphia Convention and Visitors Bureau -- the agency in charge of booking the Convention Center -- appeared alongside Nutter and chimed in: "We need hotel rooms desperately." Center City has about 10,700 rooms and could easily use 2,000 more to complement the Convention Center expansion, Ferguson said. The $786 million addition opened in early March, more than doubling the size of the Convention Center. It is geared toward bringing the largest gatherings here, and Ferguson has long championed having more hotels not only to house conventioneers, but to get them to consider coming to Philadelphia in the first place. Philadelphia lags other major East Coast cities -- its chief rivals in the convention world -- in hotel rooms. Midtown New York has more than 66,500 rooms, Washington 26,638, and Boston 18,189. The 268-room Monaco and 136-unit Homewood Suites in University City are the only hotels slated to open next year. Combined, they will add 404 rooms, only about a fifth of what Nutter and Ferguson say the city needs. "Adding another 2,000 rooms is a healthy number, and our hotels can still run strong occupancies and serve all demand segments," Ferguson said. But that "build them and they will come" theory does not take into account that existing hotels are struggling, said the head of the Greater Philadelphia Hotel Association, the umbrella group for the region's 87 hotels, including 44 in Center City. The association urges "smart hotel development." "While there is a need for another anchor hotel with 500 to 750 rooms to support the expanded Convention Center, we must remain strategic," said association president James Gratton, general manager of the 498-room Courtyard by Marriott Philadelphia Downtown. "It is important not to overbuild and maintain an occupancy level near 75 percent. This will allow existing hotels to remain profitable." Gratton said the city's hotels were not anticipated to recover from the economic downturn until 2013. None have been able to charge rates equal to the levels of 2008 -- when the average daily rate was $171.70, compared with this year's $154.82 -- because of the sputtering economy. "And we have to remember that the hotels will have to find business when there is not a citywide convention in town," Gratton said. "On average, citywide conventions only occupy our hotels about 25 percent of the time. If we overbuild, hotels will struggle when we are not hosting a convention." Data from Aug. 1 to 27 from Smith Travel Research, which tracks the hotel industry, showed occupancy among Center City hotels was flat -- at 73.3 percent -- from August 2010. The average daily rate was up 8.2 percent, but still way below 2007 and 2008 levels. "Absorption of a reasonable number of new rooms is not expected to be a problem, as demand is at all-time high levels," said Peter Tyson of PKF Consulting USA. "Rather, the problem is supporting such development at the current rate levels. "As one hotel developer expressed to us, 'We have to pay New York-level prices to get the hotel built and support it with close to Baltimore-level room rates. That doesn't work economically.' " Hoteliers say banks have no interest in financing new hotels when rates are so much lower, and that is why nearly two dozen hotel projects proposed four years ago to support the Convention Center expansion were shelved or put on indefinite hold. Contact staff writer Suzette Parmley at 215-854-2594 or sparmley@phillynews.com. ___ (c)2011 The Philadelphia Inquirer Visit The Philadelphia Inquirer at www.philly.com Distributed by MCT Information Services NASDAQ:CHCO,
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Philadelphia's Hotel Room Rates Remain Feather Soft; Regions Recovery Not Expected Until 20137/18/2011 By Suzette Parmley, The Philadelphia InquirerMcClatchy-Tribune Regional News
July 17, 2011--Debra Cook of Denton, Texas, felt she scored a coup after booking her stay at the four-star Loews Philadelphia Hotel for $100 a night Sunday through Thursday last week, on Priceline.com. "You can't beat that rate," said the 11th-grade English teacher, who was here for a five-day conference at the National Constitution Center. But Cook's room savings are costing city hoteliers. While downtown hotels are benefiting from new business brought by the recently expanded Pennsylvania Convention Center, they are charging rates far below 2007 levels because of the sputtering economy and intense competition from other major U.S. cities, primarily New York, Washington and Boston. "Hotels in the Philadelphia region have not recovered from the recession and are not projected to recover until 2013," said James Gratton, president of the 85-member Greater Philadelphia Hotel Association and general manager of the Courtyard by Marriott Philadelphia Downtown. While hotel rates are slowly come back, he said, they aren't projected to return to 2007 and 2008 levels for at least another two years. New business created by the Convention Center expansion still leaves rooms to fill. "If the average convention lasts four days, and we host 20 citywide conventions a year (those requiring 2,000 or more rooms on peak nights), there are still 285 nights a year . . . the hotels will have to fill," Gratton said. "Currently, we are projecting 16 conventions in [both] 2012 and 2013." Last year's revenue per available room, or RevPar -- the metric used by hotels to measure profitability -- was $104, the same as in 2004 and well below 2007's $122.46. As of May 30, Center City's year-to-date average daily rate (ADR) was $158.21, compared to Boston's ADR of $179.71, and Washington's $215.59. Several city hoteliers interviewed contend that if the lower ADR persists, it could cut into profits and hinder the ability of newer hotels to finance their mortgages. "When you think about operating costs such as commodities and labor, they've all gone up while ADR has gone down," said Nick Gregory, director of operations for Kimpton Hotels Philadelphia and general manager of the 230-room Palomar at 117 S. 17th St. "With occupancy flat, you lose the ability to make a profit." The result, added Gregory, is "ownership groups come down hard on management to lower amenities to keep costs low. If labor is the number-one expense. . . you have to cut labor." That, in turn, can diminish the customer's experience, said Bill Fitzgerald, general manager of the 432-room DoubleTree Hotel Philadelphia. "We are having to do more with less." There's another issue, a serious one for Philadelphia and the expanded Convention Center: Evan Evans, general manager of Le Meridien, which sits across from City Hall, said as profits are squeezed, capital improvement projects such as expansions or renovations are put on hold. The lower ADR threatens several hotel projects that were intended to support the Convention Center's expansion, which debuted March 4. Four years ago, there were more than 20 such projects in the pipeline. The 268-room Monaco by Kimpton in Old City and the 136-unit Homewood Suites in University City are the only two hotels set to open next year. "Lenders use ADR and RevPar to determine the health of our industry and make credit decisions," Evans said. "The city needs to add an additional 1,600 guest rooms to support the expansion of the Convention Center, but investors are waiting for ADR to return." Philadelphia's chief rivals -- New York, Boston and Washington -- are commanding higher rates even though they have more rooms to sell. With over 66,500 rooms in Manhattan, and as the nation's top tourism draw, New York holds top ranking as a given. Much of Washington's hotel clientele is government-related, which explains its No. 2 spot in ADR. But Boston's higher room rate than Philadelphia's is puzzling, since both cities have similar historical attractions and walkability. Boston also has far more rooms to sell, 18,189, against 11,160 here. C. Patrick Scholes, senior gaming and lodging analyst at FBR Capital Markets, said Boston was more of a financial capital and home to several mutual funds and hedge funds. "This corporate travel segment tends to pay more for rooms," he said. "Whereas in a more leisure-tourism market like Philly, the rates that you can command for that group are less." Having a smaller footprint also works to Boston's advantage. "Downtown Boston is a little more congested and harder to build new properties," said Scholes. "It's harder to put up new supply in there and part of why it can command a higher rate." Boston also has a strong summer convention market and the venue to support it, said Larry Meehan, vice president of tourism sales for the Greater Boston Convention and Tourism Bureau. The much bigger Boston Convention and Exhibition Center opened in 2004, and has a seven-year head start on Philadelphia's expanded center. There is a silver lining for Philadelphia. The limited supply of new hotels will ultimately boost rates as the larger Convention Center draws customer traffic, say analysts and hoteliers. For now, Angie and David Hein, of Cromwell, Conn., are taking advantage. The couple stayed one night in a $349-a-night suite with a complimentary upgrade at the Palomar last week after taking in the city's sights. "Price, location, amenities. We got all three," said Angie Hein, 63, as she checked out last Thursday. Contact staff writer Suzette Parmley at 215-854-2594 or sparmley@phillynews.com. ----- To see more of The Philadelphia Inquirer, or to subscribe to the newspaper, go to http://www.philly.com/inquirer. Copyright (c) 2011, The Philadelphia Inquirer Distributed by McClatchy-Tribune Information Services. For more information about the content services offered by McClatchy-Tribune Information Services (MCT), visit www.mctinfoservices.com. NASDAQ:CHCO, Richard Ginori porcelain has a long history of excellence. Richard Ginori commercial tableware is Italian porcelain of the highest quality that has been in production for over two hundred years. Members of the noble Ginori family are known to have lived in Florence, Italy dating back to 1304.
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The partnership of Christofle & Guy Degrenne (Flatware | Hollowware | Porcelain | Glassware | Stoneware | Slate | Corp. Gift | Accessories) Chilewich (Vinyl Placemats | Tablecovers | Runners | Menu Covers | Flooring | Custom Pieces) Garnier Thiebaut | Hilden America (Table Cloths | Napkins | Bed Linen | Custom Pieces | Accessories) Revol (Porcelain | Cookware | Innovative Pieces | Accessories} Zwilling J.A. Henckels | Staub | Demeyere (Chef's Knives | Cast Iron Cookware & Minis | Stainless Steel Cookware | Accessories) Peugeot | Swissmar | Galic {Salt & Pepper Mills | Shakers | Kitchen Accessories | Tabletop Accessories} Please call 1 (267) 987 8855 or email JamesFaganJr@gmail.com for booth #s or more information regarding the NRA show in Chicago. May 21st - May 24th. May 17, 2011, Atlanta, GA–After two years of declining profits, the average U.S. hotel enjoyed a 9.8 percent bottom line increase in 2010, according to a recently released report, Trends® in the Hotel Industry, issued by PKF Hospitality Research (PKF-HR). The gain, however, does not make up for the 37.9 percent cumulative loss experienced by U.S. hotels during 2008 and 2009.
While 70 percent of the properties in the Trends® sample enjoyed an increase in total revenue in 2010, only 60 percent were able to convert that into more money in the bank, indicating that the turnaround in industry performance has not occurred evenly across all sectors of the U.S. lodging industry “In the March 2011 edition of our monthly Hospitality Market Update newsletter, we noted that the driving force behind revenue growth in 2011 starts with the price tier segment you are positioned within,” said R. Mark Woodworth, president of PKF-HR. “The higher the price tier, the greater the projected growth in ADR and, consequently, RevPAR. After analyzing the results of the 2011 Trends® in the Hotel Industry survey, the relationship between price position and profits appears to be as strong as the correlation between room rates and the ability to grow revenue.” According to the 2011 edition of Trends®, hotels in the highest room rate categories achieved the greatest increases in net operating income in 2010. Conversely, properties in the lowest rate categories either achieved minor increases in profit or suffered their third consecutive year of bottom line declines. “The full-service properties in the Trends® sample typify this relationship between prices and profits,” Woodworth said. “Within the full-service category, those hotels in the lowest ADR category (less than $100) saw just a slight 0.3 percent increase in profits in 2010. At the other end of the spectrum, upper-upscale and luxury hotels with an ADR greater than $200 enjoyed a strong 33.0 percent gain in profit.” Each year PKF-HR collects financial statements from thousands of hotel owners and operators across the U.S. for its Trends® in the Hotel Industry report. The 2011 Trends® report marks the 75th anniversary of this publication and provides industry benchmarks for 2010 unit-level revenues, expenses, and profits. For the purpose of this report, profits are defined as net operating income (NOI) before deductions for capital reserves, rent, interest, income taxes, depreciation, and amortization. Revenue Up For Most Everyone Nearly 80 percent of hotels in the Trends® sample enjoyed an increase in rooms occupied in 2010, but only 67 percent were able to leverage that into increases in total revenue. On average, the hotels in the Trends® sample achieved a 6.2 percent increase in occupancy, but were unable to raise their room rates. In the aggregate, ADR for the overall sample declined 0.9 percent. Based on the preceding changes in occupancy and ADR, the Trends® sample averaged a 5.3 percent rise in rooms revenue in 2010. Among the other sources of revenue, food and beverage sales increased 5.6 percent and other operated department revenue rose 2.2 percent, but rentals and other income declined 10.0 percent. The net result was a 4.8 percent increase in total hotel revenue for the overall Trends® sample. Expense Growth Suppressed Given the fact that the gains in revenue were driven by growth in the number of rooms occupied, it is not surprising that the costs and expenses to operate a hotel also grew. Total operating expenses increased 3.4 percent in 2010. “While this growth in expenses was more than double the rise in the consumer price index for the year, it is slightly less than expected given the historical expenditure patterns we observed during the initial stages of past lodging industry recoveries,” said John B. (Jack) Corgel Ph.D., the Robert C. Baker Professor of Real Estate at the Cornell University School of Hotel Administration and senior advisor to PKF-HR. “Part of the reason for the more modest growth in operating expenses is the continued high rate of unemployment and the resulting lack of pressure on wage rates. Labor costs for U.S. hotels increased a modest 2.7 percent from 2009 to 2010.” In contrast, the amount spent to purchase all other goods and services needed to operate a hotel (excluding management fees, property taxes, and insurance) climbed 5.3 percent in 2010. The largest increases among these expenditures occurred in the rooms (6.2 percent) and food and beverage (9.3 percent) departments. These higher operated department costs are to be expected, given that revenue growth was driven by increased business volume as opposed to a rise in prices. Facing dramatic declines in revenue in 2009, hotel managers were effective in cutting all department expenses except fixed charges (property taxes and insurance). “As we predicted in the 2010 Trends® report, the profit declines in 2009 led to decreases in property values in 2010. Accordingly, fixed charges fell 3.8 percent in 2010, the only expense category to be reduced during the year,” Woodworth said. Profit Growth Varied On average, unit-level NOI for the Trends® sample rose 9.8 percent in 2010, with the ability to grow profits varying by property type. The greatest gains in NOI were achieved by full-service (+14.4%), resort (+10.4%), and convention hotels (+8.7%). Limited-service (+0.5%) and suite hotels with food and beverage (+1.8%) lagged in their ability to generate more dollars on the bottom line. This diversity of performance follows the previously described observation relating profit growth to price positioning. 2011 Outlook Based on the March 2011 edition of Hotel Horizons®, PKF-HR is forecasting that the average hotel in the U.S. will be able to increase their total revenue by 6.8 percent for the entire year. The revenue growth will come from a relatively equal contribution of increases in occupancy and ADR. Accordingly, hotel operators will need to continue their diligent efforts to control costs. “Assisting management in curbing costs in 2011 will be the continued lack of upward pressure on wages resulting from lingering high levels of unemployment,” said Corgel. “However, commodity price escalation has already contributed to a rise in utility costs, delivery surcharges, and the cost of goods sold. Cost controls might be what dictates hotel profitability in 2011." Please let us know if you will be attending the National Restaurant Assoc. Show this year in Chicago.
Please contact 1.267.987.8855 for more information. The Greater Philadelphia Tourism Marketing Corporation (GPTMC) has a food-centric campaign as part of its 2011 activities to promote the City of Brotherly Love. The city's tourism organization has partnered with foodie social platform Foodspotting to promote local restaurants, wineries, hotels and markets to Foodspotting users.
Philadelphia will have a branded presence, contests and guides on the platform, which allows users to recommend favorite dishes and drinks by taking photos of the items and sharing them with the community via the Foodspotting site or smartphone apps. The guides are location-based lists of recommended dishes and drinks that are mapped and accessible via mobile. GPTMC will have 12 official guides on foodspotting.com/visitphilly, and once Foodspotting members "spot" an item from the guides they get a "Visit Philly" badge that goes to their Foodspotting profile. The branded guides cover everything from "Famous Philly Flavors" to breweries, vegetarian cuisine and Latin eateries in the region. The city's tourism organization will roll out eight more guides on Foodspotting during the summer. GPTMC will award one grand prize and 10 first prizes to Foodspotters who participate in Visit Philly's "With Love Foodspotting Contest" this month. One person who follows "Visit Philly" on Foodspotting and completes Visit Philly's "Famous Philly Flavors" guide between May 11 and May 25 will win an overnight stay at a luxury Philadelphia hotel, a City Food Tours' Flavors of Philly excursion for two and a $100 Garces Restaurant Group gift card. Caroline Bean, a GPTMC spokesperson and social media director, said the organization followed what nearby Bucks County had been doing in the social space. "They actually started with Foodspotting last year and were talking about it to us," she says. Bean says the city's presence on the food platform carries the same branding as the larger "Love" campaign that launched last year, and which the organization has run in places like New York's Penn Station, featuring pithy text with "XOXOXO" script in a red hue. Bean says GPTMC will promote the food program through media outreach, bloggers and "Our own social media outlets, such as our own blog and our four Twitter and Facebook pages," she says. "Foodspotting is appropriate for us, since we know visitors and residents are savvy with phones, they know what they are doing on social media." "Visit Philly is one of our destination partners that really gets Foodspotting. We have a dedicated community of users in the Philly area," said Fiona Tang, head of outreach at Foodspotting, in a release. Greater Philadelphia Tourism Marketing Corporation (GPTMC), which is now 15 years old, reports in new visitor data that the Philadelphia region saw 37.4 million domestic visitors last year -- of whom 33.1 million were tourists. The numbers reflect 10 million more leisure visitors than in 1997, when GPTMC first began marketing. The organization says that every $1 spent on advertising for the "With Love" generates $100 in direct visitor spending. In addition to the Foodspotting effort GPTMC is ramping up advertising to bring tourists to the city this summer, with ads and links to VisitPhilly.com on mobile Web sites, including philly.com and philadelphiacitysearch.com, and on mobile applications, including The Weather Channel, Go2, Where, ActiveDiner, iMaps and iLocate. The organization is also launching a new TV spot the week of June 6 that will run in the Philadelphia, northern New Jersey and the Harrisburg-Lancaster-Lebanon-York (HLLY) DMAs both online and on TV stations, including Nickelodeon, HGTV, TLC, Comedy Central and TBS. Also, GPTMC and Victory Brewing Company are re-releasing the With Love-inspired Summer Love Ale this summer in 29 states. The effort is part of a "Summer With Love" campaign running May 16 through Sept. 4. by Karl Greenberg Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial results for the first quarter ended March 31, 2011.
Net revenues for the first quarter of 2011 were $1,260.3 million, compared to $908.9 million in the first quarter of 2010. The revenue increase was driven by a 46.6% increase in revenues at Wynn Macau and a 24.0% revenue increase from our Las Vegas operations. Adjusted property EBITDA(1) was $405.0 million for the first quarter of 2011, compared to $241.9 million in the first quarter of 2010. On a US GAAP (Generally Accepted Accounting Principles) basis, net income attributable to Wynn Resorts for the first quarter of 2011 was $173.8 million, or $1.39 per diluted share, compared to a net income attributable to Wynn Resorts of $27.0 million, or $0.22 per diluted share in the first quarter of 2010. Adjusted net income attributable to Wynn Resorts in the first quarter of 2011 was $173.4 million, or $1.38 per diluted share (adjusted EPS)(2) compared to an adjusted net income attributable to Wynn Resorts of $33.8 million, or $0.27 per diluted share in the first quarter of 2010. Wynn Resorts also announced today that its Board of Directors has approved a cash dividend for the quarter of $0.50 per common share. This dividend will be payable on May 17, 2011 to stockholders of record on May 3, 2011. Wynn Macau First Quarter Results In the first quarter of 2011 net revenues were $865.7 million compared to $590.6 million in the first quarter of 2010. Adjusted property EBITDA in the first quarter of 2011 was $272.8 million, up 50.2% from $181.6 million in the first quarter of 2010. Table games results in Macau are segregated into two distinct reporting categories, the VIP segment and the mass market segment. Table games turnover in the VIP segment was $29.3 billion for the first quarter of 2011, a 44.7% increase from $20.2 billion in the first quarter of 2010. VIP table games win as a percentage of turnover (calculated before discounts and commissions) for the quarter was 2.69%, slightly below the expected range of 2.7% to 3.0% and the 2.70% experienced in the first quarter of 2010. Table games drop in the mass market category was $682.5 million during the period, a 29.2% increase from $528.2 million in the first quarter of 2010. Mass market table games win percentage (calculated before discounts) of 27.9% was above our expected range of 21% to 23% and above the 22.2% generated in the 2010 quarter. Slot machine handle increased 59.2% to $1.5 billion as compared to the prior year quarter. Win per unit per day was 78.1% higher at $803, compared to $451 in the first quarter of 2010. Wynn Macau achieved an Average Daily Rate (ADR) of $307 for the first quarter of 2011, compared to $282 in the 2010 quarter. The 2011 results include the addition of 414 rooms and villas with the opening of Encore on April 21, 2010. The property's occupancy was 88.6%, compared to 90.7% during the prior year period and revenue per available room (REVPAR) was $272 in the 2011 quarter, 6.3% above the $256 reported in the prior year quarter. Gross non-casino revenues at Wynn Macau increased 50.2% during the quarter to $94.2 million, driven by strong performance from all non-casino segments. Room revenues increased 79.1% as a result of the addition of the Encore rooms and retail revenues were up 37.7% due to strong same-store sales growth and the addition of three new boutiques at Encore. Including Encore, we currently have 499 tables (263 VIP tables, 225 mass market tables and 11 poker tables) and 1,015 slot machines at Wynn Macau. Wynn Las Vegas First Quarter Results For the first quarter ended March 31, 2011, net revenues for our Las Vegas operations were $394.6 million, which was 24.0% higher than in the first quarter of 2010. Adjusted property EBITDA of $132.1 million (with a 33.5% EBITDA margin on net revenue) was up 119.1% versus the $60.3 million generated in the comparable period in 2010. Net casino revenues in the first quarter of 2011 were $194.2 million, up 39.2% from the first quarter of 2010. Table games drop was $634.0 million, compared to drop of $556.9 million in the 2010 quarter and table games win percentage of 30.4% was above the property's expected range of 21% to 24% and the 23.2% reported in the 2010 quarter. Slot machine handle of $718.7 million was 6.6% above the comparable period of 2010, and net slot win was up 18.1%. Gross non-casino revenues for the quarter were $249.0 million, a 10.8% increase from the first quarter of 2010, driven by higher revenues across all non-gaming segments. Room revenues were up 13.4% to $88.0 million during the quarter, versus $77.6 million in the first quarter of 2010. Average Daily Rate (ADR) was up 18.2% to $240 and occupancy of 87.9% was slightly below the 89.4% for the first quarter of 2010. During the quarter, we had 2.3% of our total rooms unavailable due to the remodel, which is expected to be completed in the second quarter of 2011. Food and beverage revenues increased 10.6% to $106.1 million in the quarter as we opened the new Surrender nightclub in May 2010. Retail revenues were $19.6 million in the quarter, 5.4% above last year's levels. Entertainment revenues increased 13.7% to $20.7 million from the first quarter of 2010. Balance Sheet and Capital Expenditures Our total cash balances at March 31, 2011 were $1.4 billion. Total debt outstanding at the end of the quarter was $3.2 billion, including $2.6 billion of Wynn Las Vegas debt and $551 million of Wynn Macau debt. conference Call Information The Company will hold a conference call to discuss its results on Tuesday, April 19, 2011 at 1:30 p.m. PT (4:30 p.m. ET). Interested parties are invited to join the call by accessing a live audio webcast at www.wynnresorts.com (Investor Relations). Forward-looking Statemenelease contains forward-looking statements regarding operating trends and future results of operations. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by us. The risks and uncertainties include, but are not limited to, competition in the casino/hotel and resorts industries, the Company's dependence on existing management, levels of travel, leisure and casino spending, general economic conditions, and changes in gaming laws or regulations. Additional information concerning potential factors that could affect the Company's financial results is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010 and the Company's other periodic reports filed with the Securities and Exchange Commission. The Company is under no obligation to (and expressly disclaims any such obligation to) update its forward-looking statements as a result of new information, future events or otherwise. Non-GAAP financial measures (1) "Adjusted property EBITDA" is earnings before interest, taxes, depreciation, amortization, pre-opening costs, property charges and other, corporate expenses, stock-based compensation, and other non-operating income and expenses, and includes equity in income from unconsolidated affiliates. Adjusted property EBITDA is presented exclusively as a supplemental disclosure because management believes that it is widely used to measure the performance, and as a basis for valuation, of gaming companies. Management uses adjusted property EBITDA as a measure of the operating performance of its segments and to compare the operating performance of its properties with those of its competitors. The Company also presents adjusted property EBITDA because it is used by some investors as a way to measure a company's ability to incur and service debt, make capital expenditures and meet working capital requirements. Gaming companies have historically reported EBITDA as a supplement to financial measures in accordance with U.S. generally accepted accounting principles ("GAAP"). In order to view the operations of their casinos on a more stand-alone basis, gaming companies, including Wynn Resorts, Limited, have historically excluded from their EBITDA calculations pre-opening expenses, property charges, corporate expenses and stock-based compensation, that do not relate to the management of specific casino properties. However, adjusted property EBITDA should not be considered as an alternative to operating income as an indicator of the Company's performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure determined in accordance with GAAP. Unlike net income, adjusted property EBITDA does not include depreciation or interest expense and therefore does not reflect current or future capital expenditures or the cost of capital. The Company has significant uses of cash flows, including capital expenditures, interest payments, debt principal repayments, taxes and other non-recurring charges, which are not reflected in adjusted property EBITDA. Also, Wynn Resorts' calculation of adjusted property EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited. (2) Adjusted net income attributable to Wynn Resorts is net income before pre-opening costs, property charges and other non-cash non-operating income and expenses. Adjusted net income attributable to Wynn Resorts and adjusted net income per share attributable to Wynn Resorts ("EPS") are presented as supplemental disclosures because management believes that these financial measures are widely used to measure the performance, and as a principal basis for valuation, of gaming companies. These measures are used by management and/orevaluated by some investors, in addition to income and EPS computed in accordance with GAAP, as an additional basis for assessing period-to-period results of our business. Adjusted net income attributable to Wynn Resorts and adjusted net income attributable to Wynn Resorts per share may be different from the calculation methods used by other companies and, therefore, comparability may be limited. The Company has included schedules in the tables that accompany this release that reconcile (i) net income attributable to Wynn Resorts to adjusted net income attributable to Wynn Resorts, and (ii) operating income (loss) to adjusted property EBITDA and adjusted property EBITDA to net income attributable to Wynn Resorts. WYNN RESORTS, LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (amounts in thousands, except per share data) (unaudited) Three Months Ended March 31, 2011 2010 Operating revenues: Casino $ 1,006,305 $ 691,588 Rooms 115,381 92,907 Food and beverage 128,864 111,774 Entertainment, retail and other 98,954 82,847 Gross revenues 1,349,504 979,116 Less: promotional allowances (89,232 ) (70,198 ) Net revenues 1,260,272 908,918 Operating costs and expenses: Casino 624,355 448,191 Rooms 30,572 31,143 Food and beverage 65,997 61,836 Entertainment, retail and other 56,275 50,124 General and administrative 87,661 87,001 Provision for doubtful accounts 10,161 7,018 Pre-opening costs - 2,311 Depreciation and amortization 101,347 104,565 Property charges and other 3,348 1,881 Total operating costs and expenses 979,716 794,070 Operating income 280,556 114,848 Other income (expense): Interest income 399 288 Interest expense, net of capitalized interest (58,263 ) (49,261 ) Increase (decrease) in swap fair value 4,230 (3,602 ) Equity in income from unconsolidated affiliates 602 391 Other 917 264 Other income (expense), net (52,115 ) (51,920 ) Income before income taxes 228,441 62,928 Provision for income taxes (2,106 ) (5,069 ) Net income 226,335 57,859 Less: Net income attributable to noncontrolling interests (52,531 ) (30,871 ) Net income attributable to Wynn Resorts, Limited $ 173,804 $ 26,988 Basic and diluted income per common share: Net income attributable to Wynn Resorts, Limited: Basic $ 1.40 $ 0.22 Diluted $ 1.39 $ 0.22 Weighted average common shares outstanding: Basic 123,757 122,411 Diluted 125,371 122,982 WYNN RESORTS, LIMITED AND SUBSIDIARIES RECONCILIATION OF NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED TO ADJUSTED NET INCOME ATTRIBUTABLE TO WYNN RESORTS, LIMITED (amounts in thousands, except per share data) (unaudited) Three Months Ended March 31, 2011 2010 Net income attributable to Wynn Resorts, Limited $ 173,804 $ 26,988 Pre-opening costs - 2,311 (Increase) decrease in swap fair value (4,230 ) 3,602 Property charges and other 3,348 1,881 Adjustment for noncontrolling interest 436 (1,031 ) Adjusted net income attributable to Wynn Resorts, Limited(2) $ 173,358 $ 33,751 Adjusted net income attributable to Wynn Resorts, Limited per diluted share $ 1.38 $ 0.27 WYNN RESORTS, LIMITED AND SUBSIDIARIES RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED PROPERTY EBITDA AND ADJUSTED PROPERTY EBITDA TO NET INCOME (amounts in thousands) (unaudited) Three Months Ended March 31, 2011 Wynn Las Vegas Wynn Macau, Ltd. Corporate and Other Total Operating income $ 49,174 $ 194,402 $ 36,980 $ 280,556 Depreciation and amortization 65,796 34,933 618 101,347 Property charges and other 2,030 1,318 - 3,348 Management and royalty fees 5,928 34,494 (40,422 ) - Corporate expense and other 6,178 6,291 (109 ) 12,360 Stock-based compensation 2,865 1,393 2,487 6,745 Equity in income from unconsolidated affiliate 156 - 446 602 Adjusted Property EBITDA (1) $ 132,127 $ 272,831 $ - $ 404,958 Three Months Ended March 31, 2010 Wynn Las Vegas Wynn Macau, Ltd. Corporate and Other Total Operating income (loss) $ (34,485 ) $ 125,018 $ 24,315 $ 114,848 Pre-opening costs 379 1,932 - 2,311 Depreciation and amortization 78,926 24,871 768 104,565 Property charges and other 1,254 463 164 1,881 Management and royalty fees 4,774 23,269 (28,043 ) - Corporate expense and other 6,453 4,794 (275 ) 10,972 Stock-based compensation 2,948 1,243 2,736 6,927 Equity in income from unconsolidated affiliate 56 - 335 391 Adjusted Property EBITDA (1) $ 60,305 $ 181,590 $ - $ 241,895 Three Months Ended March 31, 2011 2010 Adjusted Property EBITDA (1) $ 404,958 $ 241,895 Pre-opening costs - (2,311 ) Depreciation and amortization (101,347 ) (104,565 ) Property charges and other (3,348 ) (1,881 ) Corporate expenses and other (12,360 ) (10,972 ) Stock-based compensation (6,745 ) (6,927 ) Interest income 399 288 Interest expense, net of capitalized interest (58,263 ) (49,261 ) Increase (decrease) in swap fair value 4,230 (3,602 ) Other 917 264 Provision for income taxes (2,106 ) (5,069 ) Net income 226,335 57,859 Less: Net income attributable to noncontrolling interests (52,531 ) (30,871 ) Net income attributable to Wynn Resorts, Limited $ 173,804 $ 26,988 WYNN RESORTS, LIMITED AND SUBSIDIARIES SUPPLEMENTAL DATA SCHEDULE Three Months Ended March 31, 2011 March 31, 2010 Room Statistics for Las Vegas operations: Occupancy % 87.9% 89.4% Average Daily Rate (ADR)1 $240 $203 Revenue per available room (REVPAR)2 $211 $181 Other information for Las Vegas operations: Table games win per unit per day3 $9,544 $6,459 Table Win % 30.4% 23.2% Slot machine win per unit per day4 $186 $154 Average number of table games 224 222 Average number of slot machines 2,597 2,658 Room Statistics for Macau: Occupancy % 88.6% 90.7% Average Daily Rate (ADR)1 $307 $282 Revenue per available room (REVPAR)2 $272 $256 Other information for Macau: Table games win per unit per day3 $23,255 $18,767 Slot machine win per unit per day4 $803 $451 Average number of table games 468 392 Average number of slot machines 1,012 1,175 (1) ADR is Average Daily Rate and is calculated by dividing total room revenue (less service charges, if any) by total rooms occupied. (2) REVPAR is Revenue per Available Room and is calculated by dividing total room revenue (less service charges, if any) by total rooms available. (3) Table games win per unit per day is shown before discounts and commissions. (4) Slot machine win per unit per day calculated as gross slot win minus progressive accruals and free play. At this week’s BITAC Luxury it’s become clear the economic recession is a fading and distant memory and luxury leads the way to a new profit bounty.
Monday, March 28, 2011 Glenn Haussman Forget what your gut is telling you, luxury is leading the way. That’s right, in the hotel business – which is finally off the trough and experiencing an upswing – the luxury sector is seeing a recovery much faster and more robust than many industry insiders expected or predicted. Most interesting is that while the segment has been pilloried by press and politicians alike, the luxury market has continued to be tremendously resilient. And though the nature of the luxury hotel experience is changing—more on that in an article set to appear Thursday - one thing is clear people have money to spend and they are spending it at the finest hotels. That notion was a major discussion point this morning during BITAC Luxury, the industry’s leading peer-to-peer matchmaking event. This year’s sold –out conference is being held near Horseshoe Bay at the Fairmont Southampton in Bermuda. BITAC has become synonymous with relationship building and empowering attendees with the critical information and contacts they need to excel in their businesses. Not only did the vast majority of conference attendees agree luxury is leading a top down recovery of the entire lodging industry, but in a real time poll taken of attendees 67 percent said they feel the lodging industry recovery in the luxury sector happening much quicker than or as quickly as expected. That perceived recovery is playing itself out in real dollars. According to STR, the luxury segment saw a 7.1 percent occupancy increase while upper upscale and upscale saw 6.5 percent and 7.3 percent respectively. Luxury, however, is also enjoying an incredible rate premium over other sectors with an ADR of $243.89, a $99 premium over Upper Upscale and about a $135 premium over the upscale segment. In 2011 it’s expected the luxury segment will see a small 0.8 percent occupancy increase but an astounding 7.4 percent ADR increase and an 8.2 percent RevPAR increase. “People will spend their money where they see the value,” said Robin Holt, Principal with Callison. “People will still pay for those experiences and luxury hoteliers realize they don’t have to cut their prices.” But with luxury hotels in most major markets at this point, both developers and luxury hotel customers are looking for something new. “We are going through a metamorphosis in terms of luxury, and in many ways it is very driven in terms of location,” said Bala Kamallakharan, Prinicpal with Auro Investment Partners, which recently introduced the lifestyle focused Modo Hotels brand, which will focus on emerging markets such as India and Brazil for its growth. People have a been there and done that attitude and are looking for something new, a statement Kamallakharan agrees with, and said markets such as Iceland and Thailand will be places developers are now looking to expand into. “Iceland is a fantastic location and it helps with luxury because luxury has to have an element of uniqueness. Plus the dynamics of travelers are changing,” said Kamallakharan. Another way to boost luxury hotel sales is by inuring your property or brand to the latest consumer desires. “We ate differentiating our own brands and looking to find emotional connections with the guest,” said George Scammel, Vice President Global Design with Wyndham Worldwide. Eduardo Oliva, Director of Design & Construction with InterContinental Hotels Group, said his company is looking at emerging markets as well as those markets that still have tremendous depth to them such as Asia and South America, two powerhouse regions. “We have an emphasis on luxury. We have three upscale brands and we are emphasizing development in places like China, which has always been a big market for us and we are doing a lot of development in Latin America in places such as Brazil.” In fact, according to Lodging Econometrics, the global authority on hotel real estate, InterContinental Hotels Group has the largest pipeline of any hotel company. Finally, most executives are expecting strong revenue increases in 2011 with 34 percent of conference attendees saying they will see a 10 -19 percent increase. Additionally, 18 percent said they expect to revenue increases between 30 – 39 percent. Nearly 30 percent expect revenue increases between 20-29 percent while 14 percent expect to see increases less than 10 percent. Just 3 percent of conference attendees expect their revenues to remain flat. InterContinental’s Oliva: “Like Kevin Costner said, ‘If you build it they will come.’ At IHG we have a lot of investors and franchisees believing that. But you have to have a positive mindset and psychology. There are so many deals to be done right now. Christofle, Guy Degrenne, Garnier Thiebaut, Staub, Revol, Chilewich, Bernardaud, Hilden NEW CUSTOMER VOLUME DISCOUNT PROGRAMo Only valid for first time customers (opening orders ONLY)
o Orders must have a ship date before 06/31/2011 o 5% Discount – Orders between $2,500 - $9,999 o 10% Discount – Orders over $10,000 o No Free Freight o Discount only applies through direct orders using Food Service pricing · EXISTING CUSTOMER FREE FREIGHT PROGRAM o Free Freight on all reorders over $2,000 o Orders must have a ship date before 06/31/2011 Please call me for more inforamtion. James Fagan Jr. Direct Tel.#: 1.267.987.8855 |
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