MGM Resorts hopes for bright future amid Vegas crisis
MGM Resorts International has implied that it is working on the company’s goals for the long-term which include driving digital growth, as the firm states that demand for leisure is increasing and results in Vegas seem to be heading in the right direction.
The company has maintained that the “future is bright” as it lauded its iGaming and sports betting venture, which was a joint venture with Entain, and praised the work it has put into bringing back entertainment in Las Vegas. These comments came alongside the report for the group’s Q1 performance, as its revenue decreased by 27% down to $1.64 billion.
2020 was majorly impacted by the shutting down of properties for a good majority of the year, and MGM has stated that 2021 has seen some closures as well, alongside lower business volumes and lesser travel activities all caused by the coronavirus pandemic. Out of all of its operations, its resorts in the Las Vegas Strip were most affected.
Its venues located on the Vegas Strip amassed net revenue valued at $544.9 million, which is a shocking 52% drop from $1.13 billion, but this has all been due to the ongoing crash of various industries in Vegas as the city battles COVID-19 aftershocks. Adjusted property EBITDAR was reported to be $108 million, which represents a 60% decrease from 2020.
MGM’s regional properties witnessed a decrease in revenue of 2%, down from $725.6 million in 2020 to $711.3 million, mainly caused by the COVID-19 restrictions, as the adjusted property EBITDAR increased by 59% up to $242 million from $152 million in 2020, and this was brought on by the rise in casino revenues. MGM China’s net revenue increased by 9% up to $296 million, as last year’s quarter was massively impacted by the nationwide lockdown because of the COVID-19 pandemic in the region. Adjusted property EBITDAR ended up at $5 million.
MGM Resorts International chief executive officer and president, Bill Hornbuckle, said:
“We are pleased with the meaningful progress we’ve made on multiple fronts this quarter. Consumer demand strengthened at our domestic properties, and the significant changes we’ve made to our operating model have positioned us to capitalise on the recovery. Our regional properties achieved record first quarter adjusted property EBITDAR and adjusted property EBITDAR margins. Las Vegas operating results improved sequentially, leisure demand is improving, and we now have a tangible path to bring conventions and entertainment back at scale.
MGM China continued to outperform the broader Macau market’s gradual pace of recovery. We are also deeply focused on our long-term goals including investing in digital to drive deeper customer engagement and BetMGM, our US sports betting and igaming venture, which continues to impress as the leading operator in US igaming and the top three operator in US online sports betting. Our future is bright.”
MGM Resorts chief financial officer, Jonathan Halkyard, also noted:
“Our robust liquidity position provides us with significant flexibility amid an improving operational backdrop. As such, we have begun to return capital to shareholders through share repurchases during the first quarter. Going forward, we will be disciplined in allocating our capital by maintaining a strong balance sheet, pursuing targeted growth opportunities and returning cash to shareholders.”