The panic's over. Las Vegas' gigantic venues will soon be back selling things like concrete and computers at full capacity. Which is why MGM's CEO and president William Hornbuckle is looking further afield for the brand's next chapter.
Las Vegas is back in business, or at least will be by 2022 — but the CEO and president of one of the largest resort operators has other concerns, namely expansion in Asia.
William Hornbuckle has said MGM Resorts’ pending licence renewal in Macau is “critical” to the business, while it waits for news from Japan concerning its bid to open a resort in Osaka.
There are worse problems to have. Hornbuckle told Skift that the past year was not one he’d want to live through again, as Las Vegas didn’t just slow down, it stopped. It was also a year that saw the resort giant lay off 63,000 employees in 12 days.
But off the back of one of the first major events to return to Vegas, World of Concrete, last week, Hornbuckle is confident of recovery, with shows already selling out in minutes for 2022.
‘Nothing Has Changed’
Don’t be fooled by the numbers seems to be the message: World of Concrete typically attracts up to 60,000 visitors, but over June 8-10 it saw just 10,000 people attend. But this was down to the nature of the industry, he claimed.
“The reality is, it’s scheduled every January, it’s coming back next January. And for that particular industry, January is buying season, summer is pouring season. So literally many of the folks were out working,” Hornbuckle told Skift hospitality editor Cameron Sperance at Skift Hospitality and Marketing Summit on Wednesday. “We’re just not concerned.”
MGM’s Mandalay Bay hosts the International Surface Event from June 16-18, which is at 50 percent of usual numbers, but that too returns in January 2022. Overall, Hornbuckle said MGM currently has more room nights booked for 2022 than it did in 2019.
“Major tech companies, corporate America, will show up back in Las Vegas,” he said. His argument is that when you’re selling big things like concrete or technology (think CES), you need those big spaces.
“Fundamentally, nothing has changed. We’re selling out 80, 90 percent weekends, 70 or 80 percent mid-week and growing consistently,” he said. One 18,000-seat show also sold out in 20 minutes. “The last 90 days have literally been on fire.”
Playing the Long Game
With Vegas on the rebound, the next chapter stands to play out over a much longer time frame. To start with, a lot rests on some pivotal decisions coming June next year. This is the month when Macau makes a decision over the renewal of MGM’s licence there, while MGM also hopes to hear back from Osaka around the same time.
MGM has partnered with Orix there and is the “lone standing” candidate in a request for proposal process. “We’ve spent the better part of seven years pursuing an integrated resort at scale in Japan. We love the marketplace,” he said. “It’s hard to believe, although anything is possible, that Osaka won’t end up with a licence that ultimately we can’t get. But it’s a long journey.”
That journey could then rumble on for another five or six years, before the resort would open. But it’s worth the wait for Hornbuckle, as the new venture would be “meaningful” for the MGM brand and as significant as Singapore’s Marina Bay resort expansion to rival Las Vegas Sands.
“It will be probably be this time next year before the national government opines, but we hope to be there, ready and willing to go,” he said.
Expanding the footprint geographically is only part of the plan, as MGM ploughs ahead with online gaming and sports betting. And rather than eat away at rooms, a decisive online shift would be additive, the CEO and president said. “It’s an incremental way to reach and touch customers on a consistent basis and invite them out. I don’t see it as predatory.”
Photo credit: MGM Resorts hopes to open a resort in Osaka, Japan, in the next six or seven years. Juliana Barquero / Unsplash