Hooters hotel-casino says bankruptcy possible

Maybe I missed it, but how exactly would this play-to-pay work hours wise? I mean people would want to come and go at will, but you couldn't just charge $20 and then play for as long as you want. I guess I'm missing how would do it operationally, unless you had set start/stop times.

The closest comparison to this would be the actual riverboats that use to cruise and/or gambling crusies they had in Florida. People would pay a fee for the boat ride and then would have say 3-4 hours for gambling. People certainly did it, but they liked it a lot more when dockside gambling was allowed.

Full nudity and casinos will probably never be mixed. The separation of full nudity and alcohol has held up in Vegas for decades. Even topless girls and gambling is a very carefully controlled combinations. Rio discontinued hiring strippers for their topless pools since there was just a hint that it might be related to prostitution. I think that casinos are very concerned about prostitutes (or at least public media stories about prostitutes).

Although you read about small towns that have topless coffee shops, and topless donut places, you probably won't see topless girls bringing you drinks at your slot machines.

Maybe I missed it, but how exactly would this play-to-pay work hours wise?

I think you have to sell tickets via a the casino cage or on the website. There is a sign above the craps tables that tells people that they will have to leave the craps game from 6PM to 8PM unless they purchase a ticket. You would sell out a session. The website would be important since people could pre-purchase sessions and go to the casino knowing that their place is reserved. You could tie sales to room promotions. I don't think the sessions could be at prime gaming hours.

The situation worsens for Hooters. Bankruptcy may be near.

Casino	table	slots	room
Hooters	$740	$46.00	$46.00
Stratosphere	$796	$90.29	$43.49

Despite the low revenue Hooters is carrying $165 million in long term debt which is far more than any similar size downtown casino would carry. Hooters has about same number of rooms as Four Queen's.

Hooters casino 27,537 sq. ft.
Four Queen's casino 27,389 sq. ft.

Four Queen's manages to get 1026 slots and a 29 more table games into their casino while Hooters has 621 slots, 24 table games, and 3 poker tables. If you go into the casino you see that Hooter's does not have a very efficient layout with wide walkways on one side.

Hooter's bought their hotel for $74 million in 2006 and dumped well over $100 million into it. Terry Caudill bought Four Queen's for $21 million in 2003. Four Queen's has at least ten million more in revenue than Hooters.

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May. 14, 2010
Copyright © Las Vegas Review-Journal

Hooters Hotel restates worries over cash

By ARNOLD M. KNIGHTLY
LAS VEGAS REVIEW-JOURNAL

Hooters Hotel owners reiterated today they don't believe they have sufficient cash to meet all financial obligations this year as the property continues to miss interest payments while operating at a loss.

The owners did say in a federal filing, however, they have enough money to meet operational obligations, which traditionally include payroll and payments to vendors.

But Barbara Cappaert, a bond analyst with KDP Investment Advisors, disputed that saying in a note to investors the hotel-casino may indeed have trouble sustaining any operations on what she projects to be $5 million in cash flow for the year.

"We reiterate our concern about Hooters Las Vegas as a going concern," Cappaert's note said. "We still believe that even on a land value basis, the bonds are only worth at most 20 cents on the dollar on a present value basis."

Hooters Hotel has missed three consecutive interest payments starting in April 2009 and its debt currently stands at $163 million, a filing today with the Securities and Exchange Commission shows.

The property continued to negotiate with its lenders on a forbearance agreement so banks would not foreclose or force a bankruptcy while owners work to find a remedy to its situation, the filing shows.

"The company has engaged a financial adviser to assist with its evaluation of financial and strategic alternatives," the filing said. "(These) may include a recapitalization, refinancing, restructuring or reorganization of its obligations or a sale of some or all of its business. The company and its advisers are actively working toward such a transaction."

Cappaert said no real progress has been made on any negotiations.

The 696-room hotel-casino on Tropicana Avenue posted a net loss of $3.9 million for the first quarter ended March 31, including a $500,524 operational loss. The losses are a slight improvement from the $4.1 million net loss and $727,000 operational loss for the same time prior year.

Revenues declined 15.4 percent to $11.3 million from $13.3 million in the quarter.

Casino revenues fell 24.1 percent to $4.2 million, hotel revenues dropped 7.8 percent to $3.7 million, and food and beverage dropped 15.8 percent to $4.5 million.

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

I think the pay for play thing might be a longshot. It doesn't mesh with the typical hooters crowd - AT ALL. So they would be going after a totally new crowd and abandoning the people that are in there making it profitable now.

I would say make the casino look more modern. Ditch the name. Hire HOT girls to work everywhere and show alot of skin (they can easily do this now due to the job market) and make the entire casino a party pit. Now once they've done that the question is do they go for the 6:5 BJ in the party pit (like NYNY Does) or go 3:2. They would have the research on their typical customer to determine it.

They could put in a no BS nightclub where drinks are cheap no cover charge ect. Their customers are on the lower end of the $$$ spending so they aren't going to want to pay big $$ on drinks and cover for a club. But the club would serve to draw people in get them liquored up and spending $$$.

The topless thing is actually a good idea. It wouldn't be too hard to either make a segregated casino area for the nudity or to just change the whole hotel/casino to 21+ (how many families stay there now?).

Topless won't work with Hooters. It's not the brand. The brand is the tight orange shirts with well-endowed women. Fill the casino with them, party pit it up for the whole casino and young up the place. Put in a good nightclub and the place might do all right on weekends. The problem with hooters is that it can't compete with the strip with the hotel rates being so slow and they are inundated completely with debt meaning that they are stuck with what they have unless they can find more investment (sucker) money.

Hooters should just be done.

Quote: CFTCFT

I think the pay for play thing might be a longshot. It doesn't mesh with the typical hooters crowd - AT ALL. So they would be going after a totally new crowd and abandoning the people that are in there making it profitable now.

I agree that they pay for play is a longshot. I also agree that they would be going after a totally new crowd. The sex and the loud music doesn't seem to want to make large number of gamblers sit at machine.

The $49 per machine at Hooters is far below the downtown average, which in turn is well below the Laughlin machines. The tables are doing better than downtown, but nowhere near the state average.

I don't know if this party pit stuff does more than add a few dollars here and there. It may pull people towards the high House Average games. I don't think it makes a poorly performing casino into a money maker.

Quote: pacomartin

Hooters year end report came in. The casino only made $18 million in 2009. Total revenue is down to $46 million (from $66 million in 2007). They were losing money two years ago so now they may be giving up the ghost.

Chapter Eleven Bankruptcy Petition filed.

LAS VEGAS--(BUSINESS WIRE)--155 East Tropicana LLC, owner of the Hooters Casino Hotel will seek a financial restructuring of its current debt through a petition for reorganization under Chapter 11.

The Company had been in extensive negotiations with its primary bondholder, which purchased approximately 98% of the company’s debt at a substantial discount. The Company no longer believes a pre-negotiated restructuring is possible, and has therefore elected to commence the Chapter 11 process immediately. All hotel and casino operations will continue to operate as usual during the Chapter 11 process, including with respect to employees, customers and vendors.