MGM Resorts bounces back in Vegas

|
The MGM Grand on the Las Vegas Strip. After a rocky start to the year in January, MGM Resorts International's Las Vegas portfolio staged a strong comeback in February and March.
The MGM Grand on the Las Vegas Strip. After a rocky start to the year in January, MGM Resorts International's Las Vegas portfolio staged a strong comeback in February and March. Photo Credit: MGM Resorts International

After a rocky start to the year in January, MGM Resorts International's Las Vegas portfolio staged a strong comeback in February and March, with the company benefiting from strong weekend occupancies and ADR, according to MGM Resorts CEO Bill Hornbuckle.

"In Las Vegas, we maintained strong margins in the first quarter," Hornbuckle said during a call with investors on Monday. "For the midweek, our occupancy is still behind 2019, but an improving mix of business and a growing group base will allow us to ramp up in the remainder of the year."

For the first quarter ended March 31, MGM Resorts' saw adjusted property Ebitdar (earnings before interest, taxes, depreciation, amortization and restructuring or rent costs) at its Las Vegas Strip resorts increase 47% over the first quarter of 2019. 

The group's Las Vegas stable includes the Bellagio, Aria, MGM Grand, Mandalay Bay, New York-New York, Luxor and Excalibur properties, among others.

Additionally, Hornbuckle said that MGM Resorts' convention business is poised to return, with the company expecting convention room nights to reach 90% of 2019 levels by the latter part of the year.

According to MGM Resorts COO Corey Sanders, that convention rebound is projected to help boost the group's midweek ADR.

"Importantly, we are seeing increased spend levels for our groups year to date, including catering and banquets, and we're beginning to see positive indicators of the return of international flight capacity," added Hornbuckle, citing data from the Las Vegas Convention and Visitors Authority projecting that international flight capacity will return to 80% of pre-pandemic levels by this summer.

The robust turnaround in Vegas comes as MGM Resorts revamps its Strip portfolio, with the company recently acquiring resort operations for the Cosmopolitan of Las Vegas. The deal is set to close this quarter, with Hornbuckle projecting full integration of the Cosmopolitan into MGM Resorts' system to be complete by the end of the year.

Concurrently, the group is in the process of offloading operations for the Mirage, with that transaction to close in the second half of the year.

MGM Resorts reported companywide hotel revenue of $485 million for the quarter, up from $144 million for the first three months of the year in 2021.

Companywide first-quarter occupancy was 78%, versus 46% for the first quarter of the year prior, while ADR rose 53% on first-quarter 2021, to $197.

MGM Resorts' net revenue for the first quarter was $2.85 billion, up from $1.65 billion for the first quarter of last year. The company posted a first-quarter net loss of $18 million, compared to a net loss of $332 million for the same period in 2021.

Comments

From Our Partners


From Our Partners

A Bright Future for Globus: Camille Olivere Shares What's New for the Family of Brands
A Bright Future for Globus: Camille Olivere Shares What's New for the Family of Brands
Read More
An Insider’s Look at the Globus family of brands and Avalon Waterways, featuring Camille Olivere
An Insider’s Look at the Globus family of brands and Avalon Waterways, featuring Camille Olivere
Watch Now
The Luxury Advisor
The Luxury Advisor
Read More

JDS Travel News JDS Viewpoints JDS Africa/MI