Casino revenues down at MGM Mirage
5th August, 2008
MGM Mirage sees a 69 percent decline in profit for the second quarter as the United States struggles with an economic downturn that isn’t leaving any business type unaffected.
This fall in profit seems to be the nature of the industry as of late because Las Vegas as a whole has seen a decline in customer spending across the board. People are still going to Las Vegas, they’re just not spending as much.
“MGM is half of the Las Vegas Strip, so it’s hard to avoid,” said Dennis Forst, KeyBank Capital Markets analyst. “Although the main Vegas numbers were dreadful, MGM is probably the barometer that everyone should be using.”
MGM’s net income was $360.2 million a year ago, but has dropped to $113.1 million. In addition, net revenue went from $1.94 billion to $1.9 billion, which is a decline of 2.1 percent.
The casino has had to provide its customers with exceptional deals to get customers to come, but once they are there they have been spending less than usual, which adds to the mounting problems.
“Guests continued to visit the company’s resort in high numbers, but at lower room rates, and current economic conditions led to lower visitor spending,” MGM said. “Gaming revenues were impacted slightly more than non-gaming revenues.”
After all the deals, MGM saw a drop in revenue per room in its hotel, and a fall in all around profits.
