Casino operator MGM Resorts has revealed that it will mainly rely on ‘drive-in traffic’ once restrictions relating to the Covid-19 outbreak have been relaxed.
The casino giant released its first quarter financial report earlier this week, and it made for startling reading.
Revenue was revealed to be down 30%, while earnings had had a massive 60% chunk cut from them.
Two major Las Vegas property deals that were concluded in January kept the company from making a major net loss.
New York, New York to be among the first to open
MGM’s new CEO Jim Hornbuckle stated that the New York, New York casino on the Strip would be one of the first places to open once restrictions were lifted.
This is because it is a relatively simple venue to run, with 2000 rooms. High-end casino the Bellagio is also towards the top of the list when it comes to casinos that will be opened up quickly.
Nevada governor Steve Sisolak indicated earlier this week that casinos were likely to stay closed for the entire month of May.
Apart from those two named venues, though, Hornbuckle was more reticent about other places opening, and that MGM would “go slow” and “look to the economics of opening.”
MGM’s Strip casinos need to be generating between 30 and 50% of their usual occupancy rates in order to generate meaningful amounts of cash, according to Hornbuckle.
With air travel severely curtailed right now, MGM will be relying on people driving to Nevada from surrounding states to keep the cash flowing in their casinos.
Summer numbers could see more venues open up
This ‘drive-in traffic’ usually peaks during the summer months. If that happens this year then MGM may consider opening other properties up too.
The Covid 19 pandemic has caused MGM’s group bookings t drop by around 50%, though about half of the lost bookings have been rebooked over the last month or so.
The non-gaming entertainment offered in MGM properties is likely to be relatively small-scale at first too.
Hornbuckle said: “The idea that we’re going to get 15,000 people in T-Mobile [arena] for a concert anytime this year is probably a stretch.”
MGM will also be relying on drive-in traffic for its other properties in states other than Nevada.
That means that the casinos in Mississippi and Maryland should also generate respectable revenue once those states’ governors have given them the go-ahead to open up again.