MGM Resorts International CEO Bill Hornbuckle said during the company’s Q3 earnings call on Wednesday that MGM is in the early stages of the process of selling operations for the Mirage.
“I’ve mentioned in the past that we are happy with the amount of exposure we currently have in Las Vegas,” Hornbuckle said. He added that when looking at its portfolio of hotels on the Las Vegas Strip, the Mirage “fell far down the spectrum” in terms of anticipated future capital investment.
On the Strip, MGM operates the Bellagio, Mandalay Bay, Delano Las Vegas, MGM Grand, Signature at MGM Grand, Luxor, Park MGM, NoMad Las Vegas, New York-New York, Excalibur, Aria and Vdara at Aria. It is slated begin operating the Cosmopolitan in 2022.
In a letter to colleagues, Hornbuckle said selling the Mirage was best for the long-term success of the property.
“The Mirage is a world-class, iconic property with unique attractions that is ripe for continued investment and development,” Hornbuckle wrote. “It will be the crown jewel in another operator’s portfolio, which is why we believe a sale makes strategic sense at this time.”
Hornbuckle added that the company currently has no plans for other changes on the Strip.
A landmark hotel on the Strip
The 3,044-room Mirage was built in 1989 by developer Steve Wynn. It was the first major hotel built on the Strip in 16 years. MGM acquired it in 2000.
The Polynesian-themed Mirage was the first of the modern mega-resorts in Las Vegas. Its volcano erupts into a light, fire and water show every evening. The four-minute show fires five times every evening on the hour, according to the Mirage’s website. The resort was the home for legendary entertainers Siegfried & Roy from 1990 to 2003.
The Mirage real estate is owned by MGM Growth Properties, which is being sold to Vici Properties in a 17.2 billion deal announced in August.
Busy year for MGM
The Mirage operations sale is another big move in a busy year for MGM Resorts. The company announced in September it had entered into an agreement to purchase the operations of the Cosmopolitan of Las Vegas for $1.6 billion.
The company also bought out its partner in CityCenter for $2.1 billion before selling the underlying property to the Blackstone Group for roughly $3.9 billion while maintaining an agreement to continue handling operations for the Aria and Vdara hotels.
In 2020, MGM sold the hotel real estate for Mandalay Bay and the MGM Grand to Blackstone Group. It sold the Bellagio real estate to Blackstone in 2019.
MGM’s third-quarter results
MGM Resorts reported consolidated net revenue of $2.7 billion for the third quarter after posting second-quarter consolidated net revenue of $2.3 billion.
Hornbuckle said the delta variant of Covid-19 impacted group business in the third quarter, but that demand from individual travelers was very strong, as was demand for casino games.
“The level of demand, especially on weekends, has simply been incredible,” he said.
The company ended the third quarter reporting a 92% occupancy rate at Las Vegas properties, the highest rate since the hotels reopened from the pandemic. For the entire third quarter, occupancy at Las Vegas properties was 82%, up from 77% in the second quarter and 46% in the first quarter.
Casino revenue at U.S. properties was $720 million for Q3, an increase from $708 million in the second quarter.
Meanwhile, net revenue for MGM China fell from $311 million in Q2 to $289 million in Q3, which Hornbuckle attributed to continuing restrictions on travel and operations in China.
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