- MGM Resorts reported record-high consolidated net revenue and steady revenues in Las Vegas in the second quarter of this year, according to a company earnings report. MGM’s net revenues totaled $3.9 billion in Q2, up 21% compared to the same time last year. The company attributed the gains to the removal of COVID-19-related entry restrictions in Macau, China.
- The company also reported $371 million in operating income in Q2, down from $2.4 billion in the second quarter of 2022. The more than $2 billion decline, the report details, is due to a $2.3 billion gain in Q2 2022 from the sale of MGM Growth Properties LLC to VICI Properties Inc., as well as an increase in rent expense related to the VICI and The Cosmopolitan leases, which commenced in April 2022 and May 2022, respectively.
- In Las Vegas, MGM reported $2.1 billion in Q2 net revenues, flat compared to the same time last year. But adjusted EBITDAR decreased by 6% year on year, falling from $825 million in Q2 2022 to $777 million year on year. Despite the decline, MGM Resorts President and CEO Bill Hornbuckle said he is hopeful that upcoming entertainment and sporting events in the city will boost performance in H2 and beyond.
In Las Vegas, where MGM Resorts operates hotels including Bellagio, Aria, MGM Grand, Mandalay Bay and New York New York, Hornbuckle is “encouraged by the pacing of both Formula 1 and the Super Bowl and the announced relocation of the A’s.”
In May, MLB team the Oakland Athletics announced it will host its new ballpark on a portion of the 35-acre Tropicana Las Vegas casino resort. The ballpark will accommodate 30,000 fans and is expected to welcome more than 2.5 million visitors annually, including 400,000 new tourists driving midweek business, Hornbuckle said on an earnings call with investors.
The A’s ballpark, the Las Vegas Raiders’ Allegiant Stadium and the T-Mobile Arena represent 100,000 seats across three professional sports teams venues that are directly adjacent to one or more of MGM’s properties, Hornbuckle said. “It's clear that Las Vegas has become the world's premier sports and entertainment destination,” he added on the earnings call.
During Caesars Entertainment’s Q2 earnings call, CEO Tom Reeg similarly said that upcoming events in Las Vegas such as Formula 1 and Super Bowl LVIII are expected to drive increased occupancies at Caesars’ properties, including Caesars’ Palace, Harrah’s, Planet Hollywood and Paris Las Vegas.
MGM’s newly announced strategic licensing agreement with Marriott International and the creation of MGM Collection with Marriott Bonvoy will further “enhance [MGM’s] profitability,” Hornbuckle said on the call.
Through the partnership, 17 MGM Resorts properties, the majority of which are located in Las Vegas, will be available for booking on Marriott.com and the Marriott Bonvoy mobile app. In the earnings call, MGM forecasted that through the partnership, it can replace approximately 5% to 7% of its lowest-yielding rooms with Marriott direct bookings, representing 600,000 to 800,000 rooms per year.