LAS VEGAS - The Hard Rock hotel and casino is known for its innovative nightlife and music scene.
"Every time, there's a good show or something at the Joint," said Hard Rock visitor Adam Holstrom. "We go and check it out. Carlos Santana was there. It was good times."
Financially, times aren't so good for the Hard Rock. Morgans Hotel Group is the management company for the Hard Rock. In its 3rd quarter earnings report, Morgans said the company had a strong quarter, but the Las Vegas market remains difficult.
Alyson Bettelman is the project manager at Applied Analysis and the lead researcher of the Resort Industry Observer. "The timing is unfortunate given the amount of money that Morgans Hotel Group paid for the property, the amount that they've invested on the recent expansions and renovations," she said.
Hard Rock's $750 million expansion project was once touted as a sign of a Las Vegas rebound. But, thousands of hotel rooms have since flooded the market, bringing down room rates.
"A lot of these expansion projects, in hindsight, the timing couldn't have been worse with what occurred in the national economy," Bettelman said.
In a statement, Morgans Hotel Group said, "Unless the market improves markedly or the joint venture generates additional liquidity, there is a risk to Morgans Hotel Group's equity position and management agreement, which may be terminated by the lenders in the event of foreclosure or under certain other circumstances."
Loyal patrons hope the Hard Rock quickly overcomes what's been a rocky recession. "I love the Hard Rock, just the vibe in there," said Hard Rock customer Shavonn Ryan. "There's always something going on, and it's perfect."
Occupancy at the Hard Rock was 81 percent in the 3rd quarter. That's down about 9 percent from last year. The average daily room rates at the Hard Rock declined about 6 percent to $126.
