Buoyed by the strong return of gaming revenue and continuing robust leisure demand, MGM Resorts International strongly closed 2021, posting margins in some areas that exceeded pre-pandemic figures.
Revenue at the company’s Las Vegas properties increased from the fourth quarters of 2019 and 2020. The numbers were boosted by the first quarter of operating 100% of the Aria and Vdara hotels. MGM had previously owned 50% of the hotels, but now controls all operations after buying out former partner Infinity World Development Corp. last September.
Still, revenue at other Las Vegas Strip properties increased 5% from the final quarter of 2019.
“We had a very strong end to a great year,” MGM CEO Bill Hornbuckle said during the company’s fourth-quarter earnings call Wednesday. “Our Strip and regional margins remained very strong in the fourth quarter.”
Net revenue in the fourth quarter grew to $3.1 billion, surpassing the $2.7 billion in net revenue during the third quarter and $2.3 billion in the second quarter of 2021.
Q4 net income was $131 million, compared with a net loss of $448 million in the fourth quarter of 2020.
Nevada casinos enjoyed a record gaming year in 2021, with revenue exceeding $1 billion for the 10th consecutive month in December. MGM’s gaming revenue for the fourth quarter hit $541 million, an increase from $201 million in Q4 2020.
Meanwhile, net revenue from MGM China operations in the fourth quarter was $315 million, 57% below 2019 figures. Hornbuckle said pandemic-related travel and entry restrictions in Macau continue to hold back recovery.
In Las Vegas, Hornbuckle said the impacts of omicron were seen more in January, when there was an increase in cancellations and postponements of group bookings. Those rates have already begun to rebound, as January saw the most bookings for future dates the company has recorded since March 2021.
Big transaction closings are upcoming
MGM expects to complete its $1.6 billion acquisition of the Cosmopolitan of Las Vegas operations by the end of the second quarter and close to the $1.075 billion sale of the Mirage operations to Hard Rock International in the second half of the year.
The company will also continue to invest heavily in its online sports wagering platform BetMGM, with plans to pump $450 million into the mobile application.
On Feb. 1, the company relaunched loyalty program MGM Rewards. The program will provide more benefits for nongaming spenders. Also, the company plans to better integrate MGM Rewards with BetMGM.
“Frankly, it’s a little clunky,” Hornbuckle said of the current integration between MGM Rewards and BetMGM.
The company would like to enable online gamblers to easily use their online rewards toward a brick-and-mortar hotel if they so choose.
