After recently seeing the value of its shares hit a two-year low, global casino operator MGM Resorts International has announced the launch of a new strategy that it hopes will reduce costs and improve efficiencies in order to help drive future growth.
The Las Vegas-headquartered firm used an official Thursday press release to describe its MGM 2020 plan as a ‘company-wide business optimization initiative’ that is set to see it utilize newly-created ‘centers of excellence’ in order to realize annual efficiencies by the end of next year worth around $200 million. It stated that half of these savings are to be achieved via labor facilities with the remainder coming from ongoing improvements in sourcing and revenue optimization.
MGM Resorts International declared that its MGM 2020 project is due to build on its Profit Growth Plan from 2015 while expanding on themes set out via last year’s Investor Day and could moreover see it realize annualized adjusted earnings before interest, tax, depreciation and amortization savings in 2021 worth up to $100 million.
Investing in a digital future:
Responsible for some 28 destination casino resorts including the MGM Grand Detroit, Bellagio Las Vegas and MGM Springfield, the New York-listed operator also detailed that its new scheme is to see it invest in key technologies in order to ‘lay the groundwork’ for an envisioned digital transformation. It proclaimed that this portion of MGM 2020 will permit it to take advantage of fresh pricing, loyalty and data capabilities alongside an improved ‘business mix’ to elevate and innovate guest experiences.
Evolutionary next step:
Jim Murren (pictured), Chairman and Chief Executive Officer for MGM Resorts International, asserted that this second plank of MGM 2020 is expected to see his firm realize up to $100 million in annual savings by the end of 2021 and ‘further transform the way we operate’ by allowing the operator to ‘leverage the most effective operational architecture for our company.’
Murren’s statement read…
“Today, we are taking the next step in our evolution as an organization. We are building on the strong foundation that we have solidified over the past few years to deepen our efficiencies and achieve sustained growth and margin enhancement.”
In Asia, MGM Resorts International is responsible via its Hong Kong-listed MGM China Holdings Limited subsidiary for Macau’s iconic MGM Cotai and MGM Macau venues and is hoping to expand into Japan while Murren pronounced that the operator is confident about the future after posting ‘a solid finish to the year in 2018.’
Murren’s statement read…
“We will enter two attractive markets in New York and Ohio. We will continue to work toward cementing MGM Resorts International as the leader in sports following the milestones achieved in 2018 with GVC Holdings and the professional sports leagues. We remain focused on pursuing an integrated resort opportunity in Japan. MGM 2020 reinforces our commitment to increasing margins and maximizing profitability.”