Dive Brief:
- MGM Resorts International reported consolidated net revenues of $4.3 billion in the second quarter of 2024, up 10% year over year, according to a company earnings report published Wednesday.
- In Las Vegas, a prominent market for the resort operator, MGM posted net revenues up 3% year over year in the quarter, to $2.2 billion. The company’s adjusted EBITDAR in the market also increased 1% year over year in the quarter.
- The company attributed the Las Vegas results primarily to an “increase in rooms revenue, driven by an increase in ADR, and an increase in catering and banquets revenue.” MGM’s loyalty partnership with Marriott in the Nevada market also “continues to exceed expectations,” MGM CEO Bill Hornbuckle said in a statement.
Dive Insight:
MGM’s Las Vegas Strip resorts saw a 6% year-over-year increase in ADR and an 8% year-over-year increase in RevPAR in the second quarter, according to the earnings report.
MGM’s Vegas success in Q2, CFO Jonathan Halkyard said during a Wednesday earnings call with analysts, was “underpinned by our luxury resorts, which are responsible for the vast majority of our top line growth in Las Vegas.”
According to Hornbuckle, MGM has made “significant capital investment in our luxury,” to the tune of more than $1 billion in the last three years. He said MGM was “principally focused on Bellagio,” updating all of the rooms and suites and many amenities.
Group travel is also driving growth in Las Vegas, with “group rooms on the books pacing up mid-single-digits for the rest of 2024 and 2025,” Halkyard said.
Hornbuckle added that “meetings and convention business continues to strengthen” as a result of the company’s recently completed remodel of its Mandalay Bay resort.
The Las Vegas market has lifted up MGM's competitors as well. During a Tuesday earnings call, Caesars Entertainment President and COO Anthony Carano said the company is similarly seeing strong group and convention activity in Las Vegas.
MGM’s growth in the Nevada market has also been bolstered by the company’s strategic partnership with Marriott International’s Marriott Bonvoy loyalty program, Hornbuckle said.
Marriott has converted more than 30,000 rooms at MGM properties across Las Vegas under its reservation system, including MGM Grand Hotel & Casino and Bellagio Las Vegas. The Cosmopolitan officially integrated into MGM Rewards on Wednesday and will participate as part of MGM Collection with Marriott Bonvoy.
Year-to-date, MGM has seen 410,000 room nights booked through the partnership, Halkyard said during the call. And during an earlier Wednesday earnings call, Marriott CEO Anthony Capuano said the partnership was “really going great.”
Strong second quarter results in Las Vegas will continue throughout the year, Halkyard said. Room rates “on the books in the market are up year over year for every month in the third quarter,” he added.
However, Hornbuckle said Formula 1 in Las Vegas is “off to a soft start as compared to last year where we had a lot of advanced pre-bookings,” so that may impact the fourth quarter.
