It's a race to Chapter 11 now, with Riviera Holdings in the lead. Its glandular-themed rival down the street is opting out of an interest payment and drawing down the last of its credit, never a promising sign. However, Riviera is forcing a confrontation with Wachovia Bank. Given a choice between hoarding cash on hand and making a $4 million interest payment, Riviera execs chose Door #1. That comes atop some scarifying 4Q08 numbers that included a $13 million loss, plus cash-flow declines of 64% on the Strip and 42% in Black Hawk, Colo. (Those newly enacted rule relaxations in Colorado can't come soon enough.)
Downward pressure on ADRs (not to mention 84% occupancy) and diminished convention trade (-28%) were blamed for the decision to conserve dollars. While the Riv recorded almost as much entertainment revenue as the year before, 27% of that took the form of comps to high-value players and thus came right back off the ledger.
The Riviera's appeal is not likely to be enhanced by the announcement it is renting out space to that bane of Strip visitors — a timeshare company. "We have implemented and will continue to implement promotions to attract competing hotel customers to our property to enjoy our amenities," Riviera adds. Just don't order the powdered eggs, OK?
Station Casinos, meanwhile, closes the book on a poor-to-awful 2008. Cash flow was below $100 million for the fourth quarter, further underlining how overvalued the company's LBO price was.
No more sports betting … at least not until football season at Bally's. What the hell. You can't bet on a Boston Celtics game there anyway.
