There has been a lot of concern over the value proposition and overall demand in the Las Vegas market this past summer, but MGM Resorts International executives said they have been able to navigate the present challenges to keep guests happy and coming back.
During the company's third-quarter earnings call, MGM Resorts President and CEO Bill Hornbuckle said that over the past 30 years, the Las Vegas market has evolved and grown at a compound annual growth rate of more than 4%, with growth ebbing and flowing over shorter measurements of time.
“This summer, we heard from some of our guests around value in Las Vegas, and we responded by making adjustments to ensure a rationalized premium value experience across all of our properties,” he said.
In response to an analyst’s question, Hornbuckle said MGM Resorts lost control of the narrative over the summer, but it still listened to what visitors were saying about value.
“When we think about pricing and the things that got everyone’s attention, whether it’s the infamous bottle of water, or a Starbucks coffee at Excalibur that cost $12, shame on us,” he said. “We should have been more sensitive to the overall experience at a place like Excalibur to those customers. You can’t have a $29 room and a $12 coffee.”
As a result, MGM execs have reviewed the organization and they hope and believe they have price corrected, he said.
MGM Resorts also partnered with the Las Vegas Convention and Visitors Authority on the “Fabulous Five-Day Sale,” which resulted in the company selling over 300,000 room nights, nearly double its typical pace, he said.
There are additional factors putting pressure on the current Las Vegas visitation dynamic, including international arrivals — especially from Canada — Southern California drive traffic and the recent Spirit Airlines bankruptcy that has resulted in several canceled routes, he said. Even so, MGM Resorts expects to receive more than 40 million visitors to Las Vegas in 2025.
Data from the Las Vegas Convention and Visitors Authority shows Las Vegas recorded 41.6 million visitors to the market in 2024, and the five years leading up to the pandemic saw more than 42 million visitors each year.
“While we don't expect the dynamic to be changed overnight, we are proactively working to create initiatives and draw incremental visitation,” Hornbuckle said.
MGM Resorts’ Las Vegas Strip properties reported $601 million in earnings before interest, taxes, depreciation, amortization and rental costs, down $130 million year over year, Chief Financial Officer Jonathan Halkyard said.
He gave three main reasons for that shortfall:
- A $27 million decrease in business interruption proceeds along with an increase in insurance expense due to increased reserves.
- $25 million in disruption from the MGM Grand Hotel & Casino rooms renovation project.
- $78 million from the impact on operations primarily related to occupancy and average daily rates.
Roughly half of the impact on operations is attributable to the Luxor Las Vegas and Excalibur Hotel & Casino, and $6 million can be attributed to lower hold year over year, Halkyard said. The balance comes from softer ADRs and a decrease in occupancy, which also affects volumes in food and beverage at some properties.
“This operating environment has provided an opportunity for us to focus on our cost containment efforts, and we've been able to reduce certain costs alongside top line fluctuations,” he said.
Net revenue in Las Vegas declined 7%, but MGM Resorts cut expenses where possible, including full-time employees decreasing by 7%, he said.
The path forward
MGM Resorts expects to see stabilization in Las Vegas during the fourth quarter and growth in 2026 and beyond, Hornbuckle said. Over the long run, there’s a measured supply outlook, a growing local population, expanding entertainment infrastructure and rising demand for live entertainment and luxury.
Groups and conventions are returning in the fourth quarter, and all MGM Resorts’ guestrooms will be upgraded and back online, he said. Formula 1 ticketing presales, especially those for the Bellagio Fountain Club, are pacing ahead of last year.
“All of which puts on a solid footing as we approach 2026,” Hornbuckle said.
More than 90% of MGM Resorts’ target groups and conventions are contracted for next year, he said. The first quarter starts strong with the Conexpo-Con/Agg construction trade show, and more citywide events continue after that.
MGM Resorts has also built up to 900,000 room nights pacing to book through its partnership with Marriott Bonvoy this year.
“October is shaping up to be the strongest room-night month ever for forward bookings originating from the Marriott channel,” he said.
By the numbers
During the third quarter, MGM Resorts reported its Las Vegas Strip properties saw $2 billion in net revenue, down from $2.1 billion in 2024, according to the earnings release. Segment adjusted EBITDAR was $601 million, an 18% year-over-year decrease.
Occupancy for its Las Vegas Strip properties was 89%, down from 94% in the third quarter of 2024. ADR was $236, a 3% year-over-year decrease. RevPAR was $210, a decrease of 8% year over year. Total rooms revenue was $660 million, an 11% decrease compared to 2024.
For the full company, including MGM Resorts' regional properties and two resort casinos in Macau, China, consolidated net revenue was $4.3 billion, a 2% year-over-year increase, primarily due to an increase in net revenue at MGM China. The company had a net loss of $285 million compared to net income of $185 million the year prior. This is due primarily to pre-tax impacts of anon-cash goodwill impairment charge of $256 million for its decision to withdraw its application for a commercial gaming license for Empire City in Yonkers, New York, along with about $93 million in other non-cash write-offs related to Empire City.
As of press time, MGM Resorts' stock was trading at a price of $30.08 per share, down 10.6% year to date. The NYSE Composite Index was up 12.9% for the same period.