Profit at the casino operator is up 34% post its merger with Mandalay Resort Group. Developing...
Profits Up at MGM MIRAGE
Technorati Tags: bellagio, las vegas, lasvegas, mgm grand, mgm mirage, mirage, treasure island, vegas
Categories: Business of Gaming, MGM Resorts International
MGM's releases show contributions by property including the Mandalay casinos.
Now, the big question to me is what kind of results will Wynn report. I've heard it may be August 10 before he releases the 2nd quarter and that Steve will not have a conference call for Wall Street. Steve just wishes he didn't need any public investors.
I just listened to MGM's conference call which can be accessed at the company's website:
Terry Lanni, Jim Murren and executive management were very informative. A couple comments I found interesting:
The Residences at MGM Grand, the condo/hotel towers, are selling fast. The first two towers, which will open in 2006, are sold out. Construction on the third tower will begin this fall. What amazed me is that sales are averaging $1,000 a sq ft. Studios are 600 sq ft, 1-bedrooms are 900 sq ft and 2-bedrooms are 1,500 sq ft. $1.5 million for what amounts to two joined hotel rooms? Wow! I've looked at the models MGM has on the Studio Walk, and they are nice, but for those prices, I'd rather be in a dedicated condo building. Murren said the buyers are "well-heeled" and are buying them as 2nd, 3rd or 4th homes. The buyers want the connection to the hotel with its restaurants and entertainment. One analyst tried to pin them down on how profitable the Residences would be to MGM, but all Murren would say was, "very."
In talking about Mandalay Bay, Murren said MGM totally rebuilt and repositioned MGM Grand with room renovations, new restaurants and bars and the Cirque "Ka" show, all of which have boosted revenues. He said Mandalay Bay will undergo similar enhancements, but he said details will have to wait until next quarter's conference call.
Someone asked about the effect Wynn has had on MGM Mirage's high-end business. They said it's better than ever and that Wynn has expanded the market. Murren said a lot of Bellagio customers who have checked out Wynn have come back to Bellagio. He didn't give any support for that comment. He did say visitors usually check out two or three other properties on a visit, and MGM's goal is that all those properties be in the MGM Mirage family.
Bellagio slot revenue was up with the opening of the Spa Tower.
Another interesting statistic was that the Players Club data base has 35 million names in it. That's amazing to me as well. It will be more than a year before all the former Mandalay casinos are rolled into the Players Club.
CityCenter construction is already under way in that Bellagio is building a $90 million employee parking structure to free up the land where CityCenter construction will begin next summer. $90 million seems like a lot for a garage. I wonder if it will also serve part of the CityCenter development when it opens.
Conventions are very strong as are room rates.
The call is worth listening to.
My understanding is that the Bellagio garage is going to be VERY large with several subterranean levels.
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