MGM Resorts financial reveals impact of 1 October

LAS VEGAS - It pales in comparison to the loss of life, but the loss of revenue connected to 1 October is something Las Vegas Strip properties are dealing with.

Wednesday morning, MGM Resorts International reported its quarterly income which includes a clearer picture of the impact the tragedy had on its properties. While the company focused on numbers, it also went out of its way to acknowledge the tragedy of October 1.

In between paying respects and thanking first responders, MGM painted a spotty short-term financial forecast. In his conference call with investors, MGM Resorts International CEO Jim Murren acknowledged the obvious.

"The events of October 1st had an impact on the 4th quarter," Murren said.

For an hour, Murren outlined a very strong 3rd quarter. More than 4 percent growth in room revenue in Las Vegas.

The Bellagio reported its best quarter ever. 

But it's the months to come investors were curious about. And MGM was honest as it described what the tragic shooting did to the bottom line.

MGM says there was a spike in cancellations after the shooting in non-group rooms. Half were in October, and 20 percent of that came from Mandalay Bay.

"These cancellations gradually subsided. By mid-October, and our booking pace returned to normalized levels immediately thereafter," Murren said.

The same was true for large group business.

"They would not let evil win. They're going to host the convention, they're going to honor our community and do the work," Murren said.

The tragedy was only one reason MGM suggested its next earnings report would be less promising. First, the company acknowledged it "underestimated" the effect of renovating the Monte Carlo. It expects that to equal a $200 million impact in the 4th quarter. It also expects a drop from convention business.

All market factors MGM is confident it can overcome.

"Despite the tragedy, Las Vegas continues to move forward," Murren said. 

The final analysis of how 1 October impacted MGM and other resorts on the Strip won't really come until the end of the 4th quarter which is in early 2018.


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