MGM Resorts International (MGM.N) posted higher-than-expected third-quarter profits and revenues on Wednesday. The iconic gambling operator, which operates a range of properties worldwide, including the MGM Grand in Las Vegas, has been boosted by the easing of travel restrictions in China and Macau, two key markets for the global hospitality brand.
The company highlighted a 16% increase in consolidated net revenues to $4.0 billion, primarily due to a rise in revenue at MGM China. “MGM China is performing exceptionally well,” said the company’s chief executive, Bill Hornbuckle.
Net revenues for MGM China’s properties rose by 829% compared to the previous year, representing an increase of 10% compared to the third quarter of 2019. This surge was attributed to the lifting of COVID-19-related travel restrictions and a boost in visitation.
MGM operates four properties in mainland China and two in Macau. In mainland China, MGM operates the Bellagio Shanghai, MGM Grand in Sanya, and Diaoyutai Hotels in Chengdu and Hangzhou. Each of these is a joint venture between MGM Resorts and Diaoyutai State Guesthouse.
Its Macau properties include a 35-story, 600-room casino resort in Sé, Macau, which opened in 2007, and MGM Cotai, which finished construction in February 2018 at a cost of $3.4 billion. Both are owned as a 50/50 joint venture between the company and Pansy Ho, the daughter of Stanley Ho, whose SJM Holdings operated 19 casinos in the city.
Its gains in China were partly offset by decreases at Las Vegas Strip Resorts and Regional Operations following the sale of The Mirage and Gold Strike Tunica and the cybersecurity incident in October.
Net revenues for MGM’s Las Vegas Strip properties declined by 8% during this period, partly explained by the sale of the Mirage to the Seminole Tribe’s Hard Rock International in December 2022.
Regional Operations also faced a 5% revenue decline, again partly due to the sale of the Gold Strike Tunica to Cherokee Nation Entertainment Gaming Holdings in June 2022. However, same-store figures in its regional operations showed resilience with a slight increase. For Las Vegas Strip properties, despite the setbacks, same-store net revenues only saw a marginal decrease.
Hornbuckle stated in a press release that despite these difficulties, the company had shown strength to rebound.
“We started the quarter with great momentum across our businesses. While we were faced with a difficult cybersecurity issue in September, our employees rose to the occasion with incredible resilience and determination. With the incident now behind us, we are a stronger company, having been through the challenge,” said the MGM Chief Executive.
The report also showed that Adjusted Earnings Per Share (EPS) had improved from a loss in the same quarter of the previous year to a gain.
