Las Vegas, Nevada 2020-10-29 19:15:09 –
Las Vegas (KLAS) — According to MGM Resorts International, hotel occupancy rates have returned to the 2019 level of 50% and salary costs are back at 48%.
But as Las Vegas heads into the holiday season (usually late in casinos), the potential for shrinking the hotel business is real, said Corrie Sanders, chief financial officer and finance officer at MGM Resort. I am.
Billhorn Buckle, CEO and President of Sanders and MGM, said that certain equipment, towers, and even brands could be closed later in mid-November without providing details. It was.
But they don’t lighten the decision, as the horn buckles are talking about the “$ 500 million difference” between open and closed. This is a difficult lesson learned during the restrictions under COVID-19. These restrictions have been steadily lifted since the first casino reopened on June 4th.
The company is also cautious about changing parking lots.
MGM is wary of changes that can cause problems.
Comments followed recent news at Wynn Resorts, where the fight prompted enhanced security and tighter enforcement above and below the strip. Win also made the first move to reduce hotel operations in Las Vegas, reducing the number of days Angkor was open.
The disclosure took place during the company’s third-quarter earnings announcement, when Hornbuckle repeatedly discussed the strength of the company’s financial position. MGM’s liquidity is $ 7.5 billion, $ 4.5 billion from its US operations.
MGM paid attention to tourism demand research, staged the reopening of closed resorts, and finally reopened its last property, Mirage, in late August, followed by Park MGM and NoMad Hotel at the end of September. Did.
And the company is back in profit. Mandalay Bay, which was initially struggling, is now profitable, and only Park MGM hasn’t stopped red ink yet. Park MGM and NoMad have reopened as non-smoking businesses.
Net revenues at Las Vegas Strip properties fell 68% from 2019 levels, but Sanders says MGM is happy with third-quarter revenues. It’s about $ 15 million from the quarterly strip. This is compared to the $ 441 million profit from the strip in the third quarter of 2019.
“In general, we like what we saw in the third quarter,” Sanders said.
“We continue to believe that the fundamentals of our business are strong,” said Hornbuckle.
The company is also “all-in” to iGaming and sports betting, with a focus on the BetMGM app.
Horn buckles and other casino companies have a keen interest in iGaming and sports betting during the pandemic, and September numbers show how bettors went online. He said 55 percent of all sports betting that month took place online.
MGM expects revenue from the BetMGM app to be between $ 150 million and $ 160 million in 2020.
“We don’t have in-store business hindering this,” Hornbuckle said, citing concerns that betting outside of Las Vegas casinos could have a negative impact on business.
But with about $ 4.6 billion in cash on hand, is MGM looking at other opportunities?
Hornbuckle said casino development in Japan remains a priority and MGM is interested in building another hotel tower on the Cotai Strip (Macau).
But MGM probably wouldn’t want to buy a Las Vegas Sands property.
“If they reach close to the $ 6 billion they’re talking about, that’s a good sign for Las Vegas,” Hornbuckle said.
MGM’s eyes are sticking to the deregulation of large groups in early 2021 and the expectation of opportunities to re-use convention facilities and protocols and technologies that have been expensive to develop. ..
According to Hornbuckle, MGM tested the system at the company’s NBA Detroit Pistons in Michigan. This technology is based on the system used to resume the NHL at two Canadian sites when the league successfully finished the season.
Another group is currently testing the system at the MGM facility in Las Vegas, according to Hornbuckle.