Well the Q1 financials have been released for the Cosmopolitan, the first full quarter since the hotel was taken over by the Blackstone group and things are moving in the right direction. Revenue for the quarter came in at $189.9M which represents 3.8% growth in gross sales since Q1 2014, and net loss for the quarter was $5.7M, significantly down from the $12.7M loss the property experienced Q1 last year.
It would seem that the big gamble that Blackstone Group has taken on turning around the Cosmopolitan is slowly starting to pay off. While the company is still not profitable, the loss is getting much more manageable and if things keep moving this way it’s not a far stretch to say that the Cosmopolitan will be a profit generating enterprise by Q4 of this year.
Diving into the financials, it’s clear that the biggest gains came from their biggest area of focus – gaming. Gross revenue for the quarter from the casino business was up an impressive 19% quarter over quarter to $58.4M, which is a very telling sign since this was historically the biggest pain point of the operation.
As we reported on in late March, the Blackstone Group has begun major investments into the property and started to shift its strategy to cater more to gamblers rather than the club goers that flock to the hotel every weekend for its wide range of nightlife. It would appear at first glance that this strategy is starting to work and continued investment in this area could improve gaming revenue moving forward.
The only other area that saw revenue growth quarter over quarter was hotel operations which increased 6.4% up to $80.6M from the previous year. What’s interesting about this financial stat is that their occupancy rate went down for the quarter but they raised their average room rate by 10% which contributed to the revenue growth in this area. This is actually a smart play by the group as the Cosmo is to the hip as The Wynn is to the sophisticated so it seems plausible they could command similar rates.
Food and beverage operating revenues were the only area to decrease this quarter, falling 4.1%, which the filings from the company blamed mostly on lower occupancy rates and a larger mix of big groups.
Overall, this is very promising news for the property and it would be great to see Blackstone get The Cosmo into the black (pun intended) as it’s really a superb property and well positioned on the strip.