Restaurant’s Bankruptcy Unlikely to Touch Las Vegas Hooters

• Hooters’ parent company will reportedly file for bankruptcy protection soon
• The Hooters at Las Vegas’ OYO Casino is most likely too profitable to be closed

Even if Hooters of America (HOA) files for bankruptcy, as Bloomberg News reported as likely on Tuesday, it’s highly unlikely that the Las Vegas Strip’s only Hooters, inside the OYO Casino Hotel, will be affected.

Hands Off These Hooters!

The Chapter 11 filing under consideration, aimed at restructuring $300 million in debt, would relinquish control of the brand to HMC (Hooters Management Corporation) Hospitality Group. The remnants of the chain’s original ownership group, HMC split off in 2011 to become Hooters’ largest franchisee. It now operates 22 Hooters (and five Hoots) in Tampa Bay and Chicago that are distinct from HOA.

When the India-based OYO hotel chain — along with New York-based real estate investment firm Highgate — bought the former Hooters Casino Hotel for around $135 million in August 2019, they kept the Hooters restaurant despite rebranding the hotel and casino around it. (Las Vegas-based Paragon Gaming runs the 30K square-foot gaming floor.)

While it’s likely that Highgate handles operations under HOA’s oversight, it is also possible that it is quietly run by HMC, in which case, it’s also guaranteed not to be affected by the bankruptcy. (This is an unconfirmed rumor popular among the restaurant’s staff.)

Ownership aside, however, Chapter 11 involves restructuring, not liquidation. And in restructuring, the least profitable elements of a business are the first to be jettisoned. The 40 locations closed by HOA last year were its poorest performers.

According to a 2019 press release from OYO, its Hooters is “the world’s busiest.” Though Hooters doesn’t disclose location-specific statistics, that’s not a difficult claim to believe. The only Hooters near the Strip, OYO’s restaurant wouldn’t be open 24/7 unless it generated the revenue to sustain those hours.

How Hooters Went Bust

HOA got into trouble due to a combination of financial overreach, shifting market dynamics, and operational missteps.

Post-COVID, Hooters faced declining foot traffic and sales, a problem that hit all casual dining hard. At the same time that consumer tastes shifted toward delivery apps, inflation jacked up food and rent costs.

But HOA’s biggest misstep was taking on $300 million in debt by selling asset-backed bonds in 2021.

HOA, which is owned by the private investment firm Nord Bay Capital, operates about 260 Hooters locations in the US.

Hooters was formed by six Florida businessmen who opened their first location in Clearwater in 1983. It was a “modest dream” for Buffalo wings and beer, according to HMC’s website, whose copy mentions nothing about the buxom female servers that are now the brand’s louder legacy.