Net loss narrows, revenue higher for Hooters Hotel

Hooters Hotel will focus more on promoting its slot club and table games while cutting labor costs in the upcoming months after a disappointing third quarter, officials said Thursday during an earnings conference call.

Net revenue for the quarter ended Sept. 30 fell 5.9 percent to $16 million from $17 million in 2006 but nine-month net revenue has increased 1.2 percent for to $50.5 million from $49.9 million.

The property decreased its net loss to $3.6 million from $3.7 million for the quarter. The property's nine-month net loss narrowed to $10.6 million from $16 million a year earlier.

The year-to-year difference relates to a $5.3 million expense in 2006 while the property was being changed from the San Remo to Hooters.

Cash flow, defined as earnings before interest, taxes, depreciation and amortization, dropped 32 percent to $1.1 million for the quarter from $1.7 million in 2006. Nine-month cash flow is approximately $4.5 million.

Chief Operating Officer Gary Gregg during the call that Hooters Hotel in October started restructuring middle management and closed the Dam restaurant as part of an aggressive cost-cutting campaign. The restaurant closure involved job cuts although Gregg didn't say how many.

"The goal is to cut between $400,000 and $500,000 per month from our expenses," said Gregg, adding that the property hopes to conclude its cost cutting by year's end.

The property still has two restaurants; Dan Marino's Steakhouse, which is now open 24 hours, and Hooters. The 3,000-square-foot former Dam restaurant space is now being developed for a possible club.

The casino's performance dropped across the board, but the hotel gained as lower room rates spurred higher occupancy.

Quarterly casino revenue fell to $5.7 million from $6.4 million. Nine-month casino revenue fell to $18 million from $19.6 million.

The company will start a "$100 Free Slot Play" promotion Sunday and other slot club and table game promotions to increase traffic and revenue.

Hotel revenue, which includes retail and spa, rose 2.5 percent for the quarter to $5.9 million from $5.7 million.

Room revenue rose to $4.3 million from $4 million for the quarter.

Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or (702) 477-3893.