MGM Resorts Got Las Vegas Boost From Super Bowl and F1
The Super Bowl helped MGM Resorts post three of the top five days in revenue it has ever recorded at hotels on the Las Vegas Strip, executives said Tuesday.
“We had an average daily rate of nearly $1,000,” said Bill Hornbuckle, president and CEO.
Executives hadn’t been sure how hosting the Super Bowl would work out given the high cost of the tickets. But all of MGM’s Las Vegas properties saw a benefit.
“Every cash register from food and beverage to entertainment was ringing… at every property,” said Corey Sanders, chief operating officer.
The Super Bowl followed the inaugural Formula F1 race in November, which was also a success as the largest sports event in Las Vegas history.
The Formula One (F1) race was the “highest hotel revenue-generating event ever” for MGM Resorts, executives said.
“We are gleaning valuable insights from the events — specifically on how to better price and program all of our resorts and streamline the preparation work for future years,” Hornbuckle said.
The main takeaway was that only its well-located properties could command strong pricing powers.
“For F1, on the South Strip in particular, we would treat that probably more like a normal weekend going forward because because of the lack of activation there,” Sanders said.
MGM Expects a Marriott Boost
MGM Resorts said it expected a further lift for its hotel performance in 2024 as its licensing deal with Marriott comes into full effect.
“Our transient segment will grow as a result of the Marriott relationship, which will bring a new customer base that will be acquired at lower acquisition costs, higher rates, and more spend on property,” Hornbuckle said.
In the end of March, about 37,000 rooms at 16 U.S. hotels will become bookable on Marriott’s site and app and members of Marriott’s loyalty program will be able to earn and redeem points through stays at the properties. The first resort to enter the Marriott system was the New York, New York in Las Vegas, which became available at the end of January. (The Cosmopolitan has already been a part of Marriott’s system for some time as part of a separate deal.)
The license agreement is similar to a franchising deal in the sense that MGM Resorts will pay an unpublicized percentage of the hotel revenues to Marriott in return for receiving promotion and visibility within Marriott’s booking channels and loyalty program.
As for future resort development opportunities: “We’re looking aggressively at the U.A.E.,” Hornbuckle said.
MGM Resorts’ Robust Quarter
During the fourth quarter, revenue per available room at the company’s Las Vegas Strip resorts rose 13% year-over-year. MGM Resorts said its hotel occupancy in Las Vegas was 91% during the period. At its Las Vegas properties, MGM Resorts enjoyed pricing power, where its average nightly rate was $295 in the quarter.
About 70% of the company’s adjusted earnings are generated by its Las Vegas resorts and casinos.
In the fourth quarter, MGM Resorts worldwide collected a net income of $313 million on net revenues of $4.4 billion.
As of December 31, MGM Resorts had $6.3 billion in long-term debt worldwide.
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