MGM Resorts International has been busy improving its position on the Las Vegas Strip this year.
The hotel-casino operator closed its iconic Mirage resort casino on July 17. It will be replaced by a Hard Rock International Guitar Hotel, which the new owners plan to open in 2027.
💸💰 Don't miss the move: Subscribe to TheStreet's free daily newsletter 💰💸
Hard Rock purchased The Mirage from MGM Resorts International in 2022. On the current site of the former Mirage Volcano, Hard Rock plans to build a 600-room, 660-foot-tall Guitar Hotel on the Las Vegas Strip. The rest of the property will be modernized and themed to match the Guitar Hotel.
Related: Las Vegas Strip casino CEO unveils surprising results
MGM Resorts has since then teamed with Marriott International (MAR) to convert the iconic Delano Las Vegas, a non-gaming property on the Mandalay Bay Resort & Casino campus, to a new W Hotel brand on the Strip.
The W Las Vegas, which will be within the Marriott Bonvoy portfolio, will complete its conversion later in 2024 and will continue the MGM/Marriott long-term strategic licensing agreement that the companies sealed in July 2023. Additional plans for the property will be announced in the future, according to an Oct. 21 statement.
Adding the W Las Vegas to the MGM Collection with Marriott Bonvoy now encompasses 12 resorts on the Strip, including Bellagio, Aria Resort & Casino, The Cosmopolitan, and Mandalay Bay. Delano Las Vegas was not part of the MGM Collection with Marriott Bonvoy.
Shutterstock
MGM reports a big drop in Las Vegas casino revenue
MGM Resorts on Oct. 30 reported record third-quarter consolidated net revenues of $4.2 billion for a 5% increase year-over-year, with net income of $185 million compared to $165 million in the same quarter a year earlier.
The company's Las Vegas Strip revenue rose 1% to $2.1 billion in the third quarter ending Sept. 30, compared to the same quarter a year earlier.
It credited a rise in non-gaming revenue for the growth. However, that strength was partially offset by a 13% decrease in Vegas casino revenue to $476 million compared to $546 million in the same month in 2023.
No reason for the gaming revenue decline was given in an Oct. 30 statement or the earnings call, but the company listed year-over-year declines in Las Vegas Strip table games drop and table games win in its statement. Slot handle and slot win, however, had slight increases.
Related: Las Vegas Strip casinos face a growing problem
The closure of The Mirage may have also played a role in a decline in casino revenue.
MGM Resorts' third quarter results may have been solid overall, but not all of the news during its Oct. 30 earnings call was favorable.
More Stocks News:
- Analysts update Meta stock price target with Q3 earnings in focus
- Analyst updates Tesla stock price target ahead of key robotaxi event
- Analysts update outlook for Nvidia's Blackwell chips amid AI boom
Two factors could negatively affect MGM's 2025 earnings
While the company believes it will see growth in overall cash rates in Las Vegas for 2025, MGM Chief Financial Officer Jonathan S. Halkyard highlighted two situations that will negatively impact earnings next year.
Las Vegas hosted the Super Bowl in February 2024, which generated an estimated $60 million to $70 million in revenue for MGM. However, the company won't benefit from such revenue in 2025, as the game will be played in New Orleans.
MGM is also facing a major construction disruption in 2025 with the planned renovation of 4,000 MGM Grand Hotel Las Vegas standard rooms, Halkyard said in the company's earnings call. The company expects this disruption to impact its quarterly and annual results.
The hotel-casino operator will do its best to shift demand for MGM Grand rooms to its other properties in Vegas, he said.
Related: Veteran fund manager sees world of pain coming for stocks
