Why MGM Resorts Is Upgrading Monte Carlo

Why MGM Resorts Is Upgrading Monte Carlo
User Rating: 0 (0 votes)

The Las Vegas Strip is getting another face-lift now that MGM Resorts (NYSE:MGM) is spending $450 million to turn the Monte Carlo into Park MGM. It’s a needed upgrade for an aging property and one of MGM’s weakest performers, and key to attracting more high-end customers to the south side of the Strip.

MGM Resorts should be able to generate millions in additional revenue, as well as more spending at restaurants, bars, and shops around the resort.

In the first nine months of 2017, Monte Carlo’s revenue per available room was $120 for the resort’s 2,600 rooms. That’s better than neighboring Luxor and Excalibur at $114 and $98, respectively, but much lower than New York-New York and MGM Grand at a respective $144 and $180 per night. To Monte Carlo’s north, Aria and Bellagio led the field, with revenue of $242 and $268 per room, respectively.

These comparisons are important because Monte Carlo is right in the middle of MGM’s resorts and across the street from T-Mobile Arena. If Park MGM can increase revenue per available room to $180 or more, it would add at least $57 million in revenue annually to MGM.

MGM doesn’t breakdown Monte Carlo’s revenue by segment, but overall the combination of food and beverage and entertainment are 108% of the revenue from rooms alone. If we estimate that room revenue will rise $57 million from an increased average room rate of $180, then we can approximate that food, beverage, and entertainment revenue will rise about $62 million.

 

read more at fool.com

Started working in the Casino Industry in 1985, just never managed to leave as yet. Visited 99% of all UK Casinos, seen them all,

Leave a Reply

Optimization WordPress Plugins & Solutions by W3 EDGE