MGM Resorts CEO talks reopening strategy

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The Bellagio, pictured, and New York-New York will likely be among the first MGM properties on the Las Vegas Strip to reopen, said acting CEO and president Bill Hornbuckle.
The Bellagio, pictured, and New York-New York will likely be among the first MGM properties on the Las Vegas Strip to reopen, said acting CEO and president Bill Hornbuckle.

MGM Resorts' acting CEO and president, Bill Hornbuckle, said the company's New York-New York and Bellagio casinos will likely be among the first it reopens on the Las Vegas Strip, though timing on Nevada's lockdown lift remains in limbo.

Nevada's casinos have been shuttered under state mandate since March 17. 

"Ultimately, precise reopening dates depend on decisions by elected officials," Hornbuckle told investors during MGM's first-quarter earnings call April 30. "We just don't know. But we'll probably [open] two to three offerings initially. We tend to lean toward New York-New York because it's one of our simpler places to run, it's 2,000 rooms. We're looking at Bellagio at the other end, [because] I'm sure the competitive set is going to open." 

When it comes to additional Las Vegas reopenings, Hornbuckle said the company would have to "look at the economics" of each property. MGM's Las Vegas casino and hotel portfolio also includes the Aria, MGM Grand, Mandalay Bay, Delano Las Vegas, Park MGM, NoMad Las Vegas, the Mirage, Luxor and Excalibur. 

"Most of these properties need to be at between 30% to 50% occupancy to generate any kind of cash that is meaningful, [as in] not going backwards," added Hornbuckle. He estimated that the closure of MGM's domestic properties has led to losses of roughly $270 million per month.

Elsewhere in the U.S., MGM said it will likely reopen casinos sooner in markets that have been less impacted by Covid-19, including Mississippi and Maryland.

"We do see Mississippi [opening] first," said Hornbuckle. "The good news about our regionals is that they're drive markets. We anticipate that regional drive markets obviously will rebound faster that fly-in destinations."

For its first quarter ended March 31, MGM saw companywide revenue plummet 29%, to approximately $2.3 billion. The company's Las Vegas business saw revenue dip roughly 21%, to $1.1 billion, while its regional U.S. operations fell 10%, to $726 million.

First-quarter revenue losses were steepest for MGM's China business, which was down 63%, to $272 million. MGM, however, said it "remains bullish on Macao," with Hornbuckle adding that the company expects to see "meaningful recovery" in the Chinese gambling hub by summer.

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