Casino operators across the United States have suffered massive losses due to the shutdown of casino properties brought about by the coronavirus. While multiple states considering slowly lifting the shutdown, casinos will have to wait it out as they are prime places for crowds to gather and spread the virus. MGM Resorts one of the biggest casino operators in the country is planning a strategic reopening process.
MGM Resorts like all casino operators have witnessed a decline in gaming revenues. The company recently released its first-quarter financial report and things are not looking good. According to the data, all of the company’s earnings were down and it would be facing even bigger losses if not for the sale of its two Vegas properties back in January.
MGM’s new CEO Jim Hornbuckle is not taking all of this lying down as he has a strategic plan in place to get things up and running at the earliest. Hornbuckle says that MGM first plans to reopen its New York casino first. Since it only has around 2,000 rooms compared to the company’s other holdings, it is one of the easiest to operate. Hornbuckle also says that they plan to open the Bellagio to get back all of their the high-end customers.
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Hornbuckle acknowledges that MGM properties will continue to be hit hard after the pandemic. Most of the Las Vegas properties that MGM owns need around 30 to 50 percent occupancy to be able to earn a profit. These operations need to be able to draw a lot of people when they reopen again. MGM is hoping that leaning into drive-in traffic from other states will help ease the situation.
Drive In Traffic
Hornbuckle points out that MGM’s Vegas operations mainly depend on people driving in from surrounding states. Considering Nevada borders some of the most populous states in the country, this appears to be a good strategy.
According to MGM, 50 percent of group bookings were canceled when the pandemic started heating up. But the company has recovered 50 percent of those bookings as they have been rescheduled for the next three months. However, the company is facing a change in offerings. It has already limited its non-gambling offerings to only small-scale affairs. No more big concerts for some time.
As for other MGM properties, Hornbuckle is thinking of using the same drive-in strategy once the respective states remove the lockdown. It appears that Mississippi and Maryland will most likely be the next states to relaunch operations.