Hooter's Las Vegas in Default

Posted by: Chris Palmeri on November 16, 2009

hooters.jpg

I once told my colleague Dean Foust, who was writing an article about the Hooter’s restaurant chain, that a planned Hooter’s casino in Vegas was a sure thing. “I’d invest in that,” I said. Scantily-clad women, beer, gambling, what could go wrong?

Alas, the latest results for 155 East Tropicana, the entity that owns Hooter’s Las Vegas, shows that in Vegas there are no sure things. The company lost $14.5 million for the first nine months of this year on revenues of $35 million. Among the results, a 20% decline in food and beverage sales. That’s a lot fewer chicken wings.

A Securities and Exchange Commission filing says the company has received a notice of default from its lenders and is actively trying to restructure its $147 million in debt.

The filing says “the company does not believe that cash on hand at September 30, 2009 of $5.6 million and expected cash flows will be adequate to meet the total financial obligations.”


Hooter’s Las Vegas suffered problems fundamental to all bad real estate investments—a second-rate building in a crummy location. Half its 696 rooms were closed in the third quarter due to plumbing issues. And as Union Gaming analyst Bill Lerner notes, road construction in front of the off-the-Strip property discouraged walk-in visitors.

Even football great Dan Marino punted. His restaurant inside Hooter’s will be renamed the Mad Onion in December.

Maybe the frat boy crowd has less money to gamble. Or maybe people don’t want to go to an establishment in Vegas that they can visit in their own home town.

In my own defense I don’t think Hooter’s management did a great job marketing the casino. I once saw ads for it targeting families. Clearly not the right demographic.

Reader Comments

L. Adams

November 16, 2009 10:28 PM

I'm a male and I ask: What's the point? Go to Vegas to visit a place I can visit 20 minutes from my hours? Are you kidding? Sorry girls.

L. Adams

November 16, 2009 10:30 PM

What's the point of visiting this place? Go to Vegas and visit Hooters when I can visit the Hooters within 20 minutes of my house? Why bother? Sorry girls....

HOOTERS

November 16, 2009 10:59 PM

belongs in Vegas about as much as a professional sports team!

MJP

November 16, 2009 11:03 PM

The scantily clad women serving drinks is in almost EVERY casino! What makes Hooter's so different? It was always just the San Remo in (bad) drag! LOL!! In times like this I don't wish anyone ill feelings! Good luck to them, I hope they can survive!

Mel

November 16, 2009 11:08 PM

Maybe this pathetic gimmick is played out. Sambo's diner was forced out of business for having a denigrating racist name, but it's a-ok to have a denigrating sexist name, right boys? People who eat at this joint are french fried losers.

edmund

November 17, 2009 02:34 AM

Hooters should have gone to a muslim country, where girls do not have to show T&A but just face and neck and bring home a lot of oil money.

Instead they went to Las Vegas?? Make a U turn next time.

Ha Ha

george mj

November 17, 2009 05:17 AM

more nude items pl. include

Steve

November 17, 2009 12:08 PM

I always find it hilarious how much women hate hooters, on the other hand they all want tall dark and handsome, lots of money, drives a luxury car, has a place on the beach etc.
On the other had I think Hooters restaurants would do okay with-out the gaudy outfits, hot wings, beer and sports are a killer combo - as bw3s shows us.
As far as the article goes, I'm not surprised a Hooters casino wouldn't float based on the name alone.

Dirk

November 17, 2009 12:13 PM

Before the San Remo was re-branded to Hooters, I questioned the deal.

First, the location has never made money for any of its previous owners. Location, location, location.

Second, it was and is apparent that there is no market for common chain like Hooters in a vacation spot like the strip. How in their right mind would think people would travel to go to Hooters?

Third, it was and will always be a dump. If they really wanted to make a play it would have had to be something along the lines of Planet Hollywood, major and in a good spot.

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Joe

November 17, 2009 01:27 PM

I have been to Hooters casino several times. The problem is they took over an old hotel just off the Strip and the place is a dump. It is also next to the aging Tropicana Casino which is just as bad too.

If only they could build a new one on the Strip or move to CityCenter, they would be in a better position to make money.

G Valcke

November 18, 2009 06:54 PM

I often travel to Las Vegas on business. I am obliged to control my expenses. Even though Hooter's often had the lowest available room rate, the stigma attached to the place discouraged me from staying there. Not everyone going to "Sin City" is there to sin. In all fairness, I didn't stay there when it was the San Remo either.

mark

November 23, 2009 12:55 AM

Don't worry Hooter's, in Vegas it's not location. It's about stealing clients. You donated to a nonprofit I'm involved with, I am going to help you. I lived in Vegas awhile. I watched the best do it.Nobodys going to help you in the gaming industry. Ironically, you have a niche for big players right under your nose. Critic's say location, tell them to get a education. You'll know me when I call. Remember when the founders started Hooter's. In Vegas , it's different. You do Vegas, or Vegas does you. I appreciate the donation, and I don't like Steve Wynne. I'm glad your struggling. Listen to me. No charge. You are going to be the next pioneer in Vegas. The solution is too simple and if anyone did think of it they couldn't sell it. You'll be the most hated casino in Vegas, by other casino's. They will lose big players at a faster rate. This is payback time for Mr Wynne. He hates to look bad, ego maniac. Big Players have no real loyalty, despite what most host think. You'll be alright.

mark

November 23, 2009 12:55 AM

Don't worry Hooter's, in Vegas it's not location. It's about stealing clients. You donated to a nonprofit I'm involved with, I am going to help you. I lived in Vegas awhile. I watched the best do it.Nobodys going to help you in the gaming industry. Ironically, you have a niche for big players right under your nose. Critic's say location, tell them to get a education. You'll know me when I call. Remember when the founders started Hooter's. In Vegas , it's different. You do Vegas, or Vegas does you. I appreciate the donation, and I don't like Steve Wynne. I'm glad your struggling. Listen to me. No charge. You are going to be the next pioneer in Vegas. The solution is too simple and if anyone did think of it they couldn't sell it. You'll be the most hated casino in Vegas, by other casino's. They will lose big players at a faster rate. This is payback time for Mr Wynne. He hates to look bad, ego maniac. Big Players have no real loyalty, despite what most host think. You'll be alright.

mark

November 23, 2009 12:55 AM

Don't worry Hooter's, in Vegas it's not location. It's about stealing clients. You donated to a nonprofit I'm involved with, I am going to help you. I lived in Vegas awhile. I watched the best do it.Nobodys going to help you in the gaming industry. Ironically, you have a niche for big players right under your nose. Critic's say location, tell them to get a education. You'll know me when I call. Remember when the founders started Hooter's. In Vegas , it's different. You do Vegas, or Vegas does you. I appreciate the donation, and I don't like Steve Wynne. I'm glad your struggling. Listen to me. No charge. You are going to be the next pioneer in Vegas. The solution is too simple and if anyone did think of it they couldn't sell it. You'll be the most hated casino in Vegas, by other casino's. They will lose big players at a faster rate. This is payback time for Mr Wynne. He hates to look bad, ego maniac. Big Players have no real loyalty, despite what most host think. You'll be alright.

mark

November 23, 2009 12:55 AM

Don't worry Hooter's, in Vegas it's not location. It's about stealing clients. You donated to a nonprofit I'm involved with, I am going to help you. I lived in Vegas awhile. I watched the best do it.Nobodys going to help you in the gaming industry. Ironically, you have a niche for big players right under your nose. Critic's say location, tell them to get a education. You'll know me when I call. Remember when the founders started Hooter's. In Vegas , it's different. You do Vegas, or Vegas does you. I appreciate the donation, and I don't like Steve Wynne. I'm glad your struggling. Listen to me. No charge. You are going to be the next pioneer in Vegas. The solution is too simple and if anyone did think of it they couldn't sell it. You'll be the most hated casino in Vegas, by other casino's. They will lose big players at a faster rate. This is payback time for Mr Wynne. He hates to look bad, ego maniac. Big Players have no real loyalty, despite what most host think. You'll be alright.

Tom

November 24, 2009 02:07 AM

Mark, could you repeat that one more time? I didn't quite get it.

kostas

January 6, 2010 11:02 PM

nice pic!


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DJ Morris

February 22, 2010 10:19 AM

I think if anything they should of opened their own Casino and Hotel themselves and not gone in on another establishments coat-tails.
DJMorrisInc

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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