MGM Resorts records slow recovery after shooting

MGM Resorts records slow recovery after shooting

Friday, April 27, 2018 Posted by Joseph Streeter
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Share prices in the resort declined at the news

Issuing its financial results for the first three months of 2018, MGM Resorts governance has detailed that it was taking longer than first anticipated for the group to recover from last year’s mass shooting which involved one of its casinos .

The company reported $2.1bn revenue from its US domestic estate, a one percent decline from corresponding results of the previous year. A key element of this came from the dwindling in occupancy at the Mandalay Bay after the shooting, which took place at the property and was the worst in US history.

Furthermore, the cancellation of the Cinco De Mayo boxing blockbuster between Gennady Golovkin and Canelo Alvarez also had an impact on the slow recovery of the MGM, as the event was set to be one of the biggest grossing Vegas based sports events events prior to its cancellation.  

The results led to the company’s share prices taking a hit and decreasing as much as 10 per cent, in the aftermath of the releasing of the news.

MGM Resorts CEO Jim Murren said in a statement: “For the remainder of the year, we expect continued disruption at Monte Carlo and additional time to recover at Mandalay Bay. Additionally in the second quarter, the cancellation of a major prize fight in May moderates our expectations, particularly at our luxury properties.

“That said, we expect our Las Vegas Strip net revenues to be up slightly and our Las Vegas Strip revpar [revenue per available room] to increase one per cent to three per cent. We also expect similar Las Vegas Strip adjusted property EBITDA margin compression in the second quarter as experienced in the first quarter.”

The company did however report some positive domestic news today, announcing that its $950m property in Springfield Massachusetts will open a month ahead of schedule, on August the 24th, Michael Mathis, president of MGM Springfield, commented: “A testament to a decade of collaboration between the city of Springfield and MGM Resorts, MGM Springfield will pay tribute to the city’s legacy and celebrate its bright future, while introducing a stellar array of hospitality and entertainment experiences that will attract guests from New England and beyond.”

Totally Gaming says: Whilst there are many elements as to why MGM Resorts recorded a poor first quarter of the year, the key factor that lead to a diminishing in both convention attendees and tourists for MGM, was the tragic shooting of last year. The company will be eager to complete the refurbishments of its Monte Carlo Las Vegas Resort and regain its position a leading destination for tourists and convention attendees once again.  

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