“Soft demand” amid the coronavirus pandemic has MGM Resorts International (MGM:NYSE) contemplating the partial closure of some of its properties on the Las Vegas Strip, according to local news agencies.
During a quarterly earnings call on Thursday, Chief Executive Officer for MGM, Bill Hornbuckle reportedly said…
“We’re going through an exercise, we’re doing it now, about what do we keep open and what do we close. There are certain amenities, certain towers, certain brands potentially that could face closure from mid-November — give or take — through the holiday season, as reported by the Las Vegas Sun.
Low visitation:
According to the source, in an email received after the call a spokesman for MGM said that rather than “full property closures,” any closures would probably be “limited to midweek operations.”
Hornbuckle’s comments addressing the potential partial, mid-week-closures were reportedly made after he was asked if the Las Vegas-based company that is responsible for 10 Strip properties was considering following rival operator’s such as Wynn Resorts Limited (NASDAQ: WYNN), which have scaled back some of their operations due to low visitation amid the COVID-19 pandemic.
“We’re keeping a close eye on it as we go forward,” the CEO said.
Earlier this month, Wynn Resorts announced that from October 19, it was reducing hours (Thursdays through Mondays) at Encore Las Vegas due to a lack of foot traffic on The Strip and that the new schedule will continue “indefinitely until consumer demand for Las Vegas increases.” In addition to a reduction in hours, Encore’s 28-table poker room was temporarily moved to the Wynn casino, adjacent to Allegro and the Race and Sportsbook, where it will reportedly operate 24/7.
Revenue declines:
Citing the Las Vegas Convention and Visitors Authority, according to the Las Vegas Sun, in “Sin City”, September midweek hotel occupancy was 39 percent, a 47 percent drop from the same month a year prior, while weekend occupancy was 66 percent, a 30 percent decrease from September 2019.
Furthermore, MGM reported net revenues of $1.1 billion for Q3 ending on September 30, 2020, a staggering 66 percent plunge from the same time the previous year. The company’s 2020 third-quarter net loss was $535 million, while for the same period in 2019, it [MGM] reported a net loss of approximately $37 million.
Net revenues at the global hospitality and entertainment company’s Strip properties were $481 million for Q3, a 68 percent plummet from the same period in 2019. The huge decline was, for the most part, attributed to the effects of the coronavirus pandemic, which as of November 1, 2020, has claimed 1,192,644 deaths according to the World Health Organization (WHO).
Nevada has reported 1,779 total coronavirus deaths as of November 1st, with the state surpassing 100, 000 COVID-19 cases on November 31.