When a J.P. Morgan gaming analyst recently held court with MGM Resorts investors, it was a real party atmosphere. So upbeat, in fact, the Hakkassan nightclub in MGM’s Las Vegas flagship Grand property might have been just the spot to hold the cavalcade. That’s because Hakkassan – a $100 million nightclub extravaganza featuring an outdoor balcony overlooking the Las Vegas Strip – has been pulling its weight with an impressive 18 to 20 percent visitation level to the MGM Grand casino hotel. Build it, and they will come, apparently held true with this party place on steroids.
CityCenter Pulling Its Weight As Well
But Hakkassan doesn’t get to hog all the glory for MGM Resorts rather rosy investment picture these days; somewhat surprisingly, CityCenter, a 67-acre development in the heart of the Strip, is now also getting its due after opening to a rocky start back in 2009 during the peak of the recession.
Owned in a brave new world partnership with Dubai World, MGM’s CityCenter showcases the swank, 4,000+ room Aria at its center, and the heart is beating strong: Aria’s overall net revenues grew 32 percent during January through March 2013, while its per room revenues shot up 5 percent. Picture an MGM executive mass happy dance at this news.
Going in the Right Direction
Okay, make it more of a low-key foot tap, but still, it’s movement in the right direction. “[We] believe MGM can grind higher from here, given its exposure to Macau’s growth and its leverage in an admittedly modestly improving Las Vegas Strip market,” said J.P. Morgan gaming analyst Joe Greff at the investor gathering.
“Modest” isn’t half bad when it comes to the Las Vegas Strip, mind you; after all, with ten properties under their command there, it “can translate into attractive growth given MGM’s tight cost controls and more efficient marketing,” added Greff.
We don’t know so much about the “tight cost controls”; MGM Resorts is looking to spend close to $350 million on hotel room upgrades and amenities at a few of their Strip properties, as well as on a new outdoor entertainment and retail district that will traverse the area between New York-New York and the Monte Carlo, both MGM hotel casinos. All that will ultimately lead to a planned 20,000-seat arena that is slated to go in behind both resorts.
Maybe it’s time to revisit the old Emerald City/Oz theme that was the MGM Grand’s original hallmark. You are definitely not in Kansas anymore when you arrive.