MGM Resorts: Strength in Marriott Deal, Softness with Formula 1

01.08.2024 - 04:04 / skift.com / Sean Oneill

MGM Resorts International reported record second-quarter revenue on Wednesday, driven by a recovery in Macau and continued strength in Las Vegas. The casino and resort operator noted that a partnership with Marriott International boosted the company but that an upcoming Formula 1 race in Las Vegas isn’t leading to as many bookings as was hoped.

“In Las Vegas, benefits from the Marriott program will only continue to increase, particularly on the group side, unique to MGM,” said MGM Resorts president and CEO William “Bill” Hornbuckle.

MGM Resort said it had seen benefits from a licensing agreement, which launched in mid-March, enabling guests at MGM properties to earn and redeem points through Marriott’s loyalty program.

Last November, Las Vegas hosted an inaugural motor sporting event, the Formula 1 Heineken Silver Las Vegas Grand Prix. It was the biggest event in the history of Las Vegas.

Advance bookings for this year’s race have not been as strong as last year’s.

“Through our room rates, Formula One is showing some softness,” Hornbuckle said. “We are hoping and believing that this rate will continue to pace up. But that presents a potential headwind in the fourth quarter.”

“The real issue with Formula One is it’s off to a soft start as compared to last year where we had a lot of advanced pre-bookings,” the CEO said. “You can see some of our ADRs [average daily rates] are down — if you look at what we’re charging – 50%, give or take.”

It’s important for MGM Resorts to be able to take advantage of peak demand pricing for major events. In the past few years, the company has invested about $1 billion in refurbishing its Las Vegas properties, especially Bellagio. The company has submitted plans to local officials to connect three centrally located resorts: Bellagio, Aria, and Cosmopolitan.

The company saw significant growth in its Macau operations, with net revenues jumping 37% to $1 billion. This surge reflects the continued ramp-up of operations following the removal of pandemic-related travel restrictions earlier this year.

Las Vegas Strip Resorts revenue increased 3% to $2.2 billion, primarily due to higher room rates and increased catering and banquet revenue. The company’s regional operations, including its resorts in Atlantic City, New Jersey, remained flat year-over-year, at $927 million.

The Cosmopolitan of Las Vegas on Wednesday joined MGM Rewards, the group’s loyalty program. This integration lets MGM Rewards members earn and redeem points at The Cosmopolitan.

The Cosmopolitan will maintain its affiliation with Marriott Bonvoy’s Autograph Collection brand as part of the MGM Collection with Marriott Bonvoy.

Hornbuckle declined to say if the Cosmopolitan’s loyalty program, Identity, would