MGM Resorts International’s Strip properties posted a second consecutive quarter of year-over-year revenue growth, helped by convention demand, a strong events calendar and higher casino revenue, despite some challenges presented by its lower-priced properties.
The Las Vegas-based gaming company’s financial results came as its board continues to review a potential multibillion-dollar acquisition offer from Barry Diller’s People Inc. MGM said in its earnings release that a special committee of independent directors continues to evaluate the proposal with outside advisers. CEO Bill Hornbuckle said during Wednesday’s earnings call that the company had no additional updates, and that he and Chief Financial Officer Jonathan Halkyard would not answer questions about the offer.
For the three-month quarter ended June 30, MGM’s nine Strip resorts generated $2.2 billion in revenue, up 3 percent from the same period last year, according to public filings.
“April and May were strong. May was exceptionally strong, driven by events and other activity (in the city),” Hornbuckle told analysts and investors on the call. “June was more challenged.”
The Strip results were boosted by casino performance, with gaming revenue increasing 17 percent year over year to $536 million, driven in part by a higher table games win percentage. Table games win rose 27 percent to $451 million, while table games drop declined 2 percent to $1.52 billion. The company’s table games hold was 29.6 percent, compared with 22.9 percent during the same quarter last year.
Slot handle was essentially flat, with roughly $5.9 billion gambled, resulting in a 3 percent YoY win of $566 million and a hold of 9.6 percent.
Hotel performance was softer in the second quarter compared to last year. Room revenue declined 2 percent to $717 million, average daily room rate fell 4 percent to $242 and revenue per available room declined 4 percent to $224. Occupancy remained unchanged at 93 percent.
Executives said the strength of the quarter varied across the Strip portfolio.
“We’re seeing real health in the luxury segment, and then we’re seeing a sort of a continued but relatively stabilized trend at the lower end,” said Ayesha Molino, MGM Resorts’ chief operating officer.
Molino said MGM’s lower-priced properties, specifically Luxor and Excalibur, remain challenged. The company has used its new all-inclusive package as one effort to support those resorts.
MGM said the package has generated more than 30,000 room nights since launching. Hornbuckle said the offering has helped stabilize occupancy and forward bookings at Luxor and Excalibur, while also attracting new customers.
Convention business remained a major driver for the Strip resorts. Hornbuckle said group business accounted for 20 percent of room mix during the quarter, putting MGM on pace for the segment to represent about 20 percent of full-year room mix. The company also recorded its highest second-quarter convention average daily rate and catering and banquet revenue in its history.
MGM executives said the company plans continued investment in its luxury offerings, including renovations at Aria and The Cosmopolitan hotel-casinos and improvements to Bellagio’s convention and public areas. Hornbuckle said the company can complete significant improvements within its existing capital spending levels, though larger expansions would require additional investment.
“It’s worth emphasizing that Las Vegas is stabilizing and growing, as evidenced by this quarter’s improvements in both revenue and EBITDA (earnings before interest, taxes, depreciation, and amortization), and the continued swell of premier sports entertainment events has only reinforced our focus on deploying capital towards our luxury offerings to drive medium to long-term growth,” Hornbuckle said.
Companywide, MGM Resorts reported consolidated revenue of $4.5 billion for the quarter, up 1 percent year over year. Net income attributable to the company was $292 million, compared with $49 million in the prior-year quarter.
Contact David Danzis at ddanzis@reviewjournal.com or 702-383-0378. Follow @AC2Vegas_Danzis on X.
