MGM Resorts Confirm Bookings Back To Normal In Q3 Financial Report
MGM Resorts International reports the company has rebounded from the drop in bookings and increase in cancellations following the MGM-owned Mandalay Bay shooting which was touted to be the worst mass shooting in US history.
MGM reported its third quarter financial and operating results this week, its first financial report since the October 1 incident, where a gunman openly fired at concertgoers on the Strip from his suite at the Mandalay Bay. The shooting was part of the alarming trend of attackers targeting concerts. Prior to the Las Vegas concert shooting, an attack was made at an Ariana Grande’s concert in Manchester, England and earlier a rock concert in Paris, France.
According to Chief Executive Officer Jim Murren, Mandalay Bay halted all its promotional efforts after the incident. As an aftermath of the shooting, cancellations of earlier bookings doubled. By the middle of October, the company began to resume its marketing efforts and witnessed the booking rate for Mandalay Bay slowly increasing. Now that a month has passed since the shooting, Murren noted that business has rebounded and is now back to normal levels.
Investors responded positively to the good news released by MGM. Company shares went up by as much as 5.1 percent to reach $33.06 in New York Trading on November 8, which is its highest gain since March 2016. The effects of the October 1 incident did not reflect on the third quarter earnings. Murren believes that the month-long decline in bookings at the Mandalay Bay, in addition to the disruption caused by the reconstruction of Monte Carlo to Park MGM, will significantly impact the company’s fourth quarter results.
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In a statement, Murren said,
In the fourth quarter, we expect our Las Vegas Strip revenues to decrease by a low to mid-single digit percentage, with non-hotel elements partially offsetting a 5 percent – 7 percent REVPAR decline. Accordingly, we anticipate our fourth quarter Las Vegas Strip Adjusted Property EBITDA margins to decrease by roughly 100 basis points
Zacks Investment Research said that MGM’s third quarter results have hit Wall Street expectations as MGM reported a 12.3 percent increase in revenue to $2.83 billion, which surpassed Wall Street’s predicted $2.77 billion. Revenue per available room for MGM’s Las Vegas Strip resorts was reported at $156, up 4 percent from 2016’s $150. Also within Street estimates is the company’s earnings, which fell to 26 cents per share, or 33 cents per share after adjustment for non-recurring items.
MGM China Holdings Ltd reported a 21 percent decrease in its adjusted earnings before interest, tax, depreciation, and amortization (EBITDA).