MGM Resorts International executives say the company's partnership to list Las Vegas Strip properties on Marriott International's Bonvoy loyalty app is providing better-than-expected results. The third quarter also saw MGM's casino resorts in China post record results.
Speaking during the company's third-quarter earnings call, Chief Financial Officer Jonathan Halkyard said the MGM partnership "continues to exceed our expectations" and MGM hopes to forge deeper ties with Marriott.
"Bonvoy guests are driving higher spend to our properties, and we also announced last week plans to rebrand our Delano Tower at Mandalay Bay to a W resort, which has significant brand recognition," he said.
Halkyard said the W conversion will take place "by the beginning of the year" and is likely to drive better hotel performance.
"We think there's some upside on the [average daily rates] and the occupancy at that property," he said.
MGM Resorts Chief Operating Officer Corey Sanders said the partnership has been key to driving new demand streams to MGM's properties outside of its more traditional casino guests, whom he described as "pretty consistent .. throughout the last few years."
"As we look at Marriott, it's a really a transient play, and hopefully moving out some package business," he said. "That will be our strategy for next year, also."
Results in China
MGM China saw record net revenue and adjusted property earnings before interest, taxes, depreciation, amortization and rent expenses for the third quarter.
The lifting of entry restrictions in Macau in early 2023 have continued to boost performance of MGM's Macau and Cotai resorts, and the third quarter saw consolidated net revenues of $929 million, compared to $813 million a year prior. Adjusted EBITDAR was $237 million, up 5% year over year.
Hubert Wang, president and chief operating officer of MGM China, said MGM's two Macau properties would likely see long-term benefits if the Chinese government keeps up its cadence of stimulus efforts to boost their overall economy.
"We will see," he said. "Stimulus matters definitely, and we'll all benefit in the long run."
Third-quarter results
MGM's consolidated net revenues rose 5% year over year to $4.2 billion in the third quarter. That improvement was largely attributed to improved performance in Macau.
MGM's Las Vegas resorts recorded $2.1 billion in net revenues for the quarter, up 1% year over year, as increasing non-gaming revenues were offset in a drop in casino revenue.
Adjusted property EBITDAR was up 2% for Las Vegas resorts to $731 million, including $37 million from business interruption insurance tied to the company's widespread cybersecurity issues in late 2023.
As of press time, MGM's stock was trading at $37.55 a share, down 15.9% year to date. The NYSE composite was up 14.8% for the same period.