Mandalay Bay is beginning to emerge from the cloud of the Oct. 1 mass shooting, but the Strip resort isn’t out of the woods yet, MGM Resorts International executives said today during the company’s fourth-quarter and end-of-year earnings call.
For the quarter, which began the day of the shooting and ended Dec. 31, Mandalay Bay net revenue was $185.6 million, down 6.7 percent compared to the fourth quarter of 2016.
The resort saw a decline in business after a gunman on the 32nd floor opened fire on a concert crowd across the street, killing 58 people and leaving more than 800 injured.
But things are starting to trend upward again, said Dan D’Arrigo, executive vice president and chief financial officer for parent company MGM Resorts.
“There’s already a huge amount of recovery within Mandalay that has taken place,” D’Arrigo said. “But there is still some residual impact.”
Room cancellations took a toll on Mandalay during the fourth quarter, and bookings have been down slightly into the first quarter this year, D’Arrigo said. MGM also paused its marketing of the resort following the shooting, which also had an impact, officials said.
Despite the fourth-quarter results, Mandalay Bay’s annual revenue increased from $934.1 million in 2016 to $951.7 million last year.
MGM Resorts Chief Executive Officer Jim Murren said he was proud of how the company responded to the fallout from the shooting.
“Particularly after the events of 1 October, we quickly scaled our business, put our analytical and operational horsepower to work and made strong guidance of what we thought we’d do in an uncertain time,” Murren said.
Monte Carlo transformation to Park MGM
As the $525 million transformation of the Monte Carlo to the Park MGM and Nomad continues, fourth-quarter revenue at the property was $44.1 million, a 34.5 percent dip over the same period last year.
“When you look at the quarter, two-thirds of the decline was result of the construction disruption,” D’Arrigo said. “There’s still a lot going on there.”
That disruption will carry over into the first quarter this year, to the tune of $9 million to $10 million in lost revenue, D’Arrigo said. But officials are confident revenue will begin to rise as construction comes to a close by year’s end.
With the massive makeover, D’Arrigo said, he looks at the project as more of a new resort opening rather than a renovation.
“The property will be so different and unique and a new brand,” he said. “We’ll be pushing that brand campaign throughout ‘18 and into ‘19 and expect ‘19 being a ramp-up period, with ‘20 achieving that full cash-on-cash return that we’re looking for.”
Officials noted the anticipated impact of new development projects and a growing professional sports landscape.
“We’re very excited about the expansion and renovation of the (Las Vegas) Convention Center. Undoubtedly that will help out the northern end of the Strip, which has encouraged investment over there with the Fontainebleau, Resorts World,” Murren said, referencing two competing resort developments.
“The single greatest beneficiary as an incumbent to that is Circus Circus, which enjoyed a tremendous year in 2017,” Murren said. It saw its revenue increase from $248.3 million in 2016 to $251.7 million in 2017.
With the Raiders football stadium being built near several MGM Resorts properties, Murren said, he was excited about what that will bring in the future. The team is expected to start play in Las Vegas in 2020.
“They’re on track; they’re spending money; they’re working hard, and that’s certainly encouraging for us, because we own the neighborhood,” he said. “Having the stadium there will have a big benefit to Mandalay, Luxor, Excalibur, etc.”
The Vegas Golden Knights, meanwhile, are in the midst of a whirlwind inaugural season, one that, barring a historic collapse, will include an NHL playoff run.
MGM Resorts has an ownership stake in T-Mobile Arena, where the hockey team plays its home games, and its properties surround the complex. Murren sees a successful playoff run for the Golden Knights translating into to big dollars for MGM.
“They started the year at 200-1 odds of getting into the Stanley Cup, and it’s now at 9-2,” Murren said. “A playoff series at T-Mobile would have an impact on New York-New York, Park MGM and the neighborhood.”
Murren also cited a boxing rematch between Saul “Canelo” Alvarez and Gennady Golovkin on May 5 and a pair of U2 concerts May 11-12 at T-Mobile.
In addition, MGM resorts is the title sponsor of the NBA Summer League in Las Vegas. “That’s going to have a big impact on visitation in a time that we have typically struggled,” Murren said.