Historic Quarterly Profits Peak for MGM China
MGM China's Record-Breaking Growth in 2022
MGM China, a leading player in Macau's gaming and hospitality industry, has reported its best-ever quarterly results, marking a significant milestone in its journey. The company's impressive growth can be attributed to several key factors.
Firstly, the expansion of premium room inventory in Macau has directly boosted revenue. The increase in main-floor table gaming volume by 7% is a testament to this strategy's success. The introduction of new high-end offerings, such as the Alpha Club and the 28 Alpha Villas at MGM Macau, has further enhanced the luxury experience, attracting affluent clientele.
MGM China's strong market share growth is another significant contributor to its success. Reaching an all-time high of 16.6% in Macau indicates effective competitive positioning. The company's prudent expenditure and disciplined player reinvestment have also played a crucial role in its sustainable success, with EBITDA margins rising to 28.9%.
The robust overall business momentum, with increased transaction volumes across all segments in Macau, has contributed to the highest-ever adjusted EBITDA for MGM China. Moreover, the geographic diversification within MGM Resorts has enabled the offset of slower performance in other regions and leveraged regional strengths like Macau for growth.
The growth in digital gaming and sports betting operations globally, although still in investment phases, has bolstered operating income. BetMGM, for instance, turned a profit, reflecting MGM's broader strategic growth that complements its Macau operations.
MGM China's properties daily gross gaming revenue is now higher than pre-pandemic levels, and the net revenue stands 172% above pre-pandemic levels in 2019. The company's net revenue for the quarter was HK$8.7 billion (US$1.1 billion), a 8.4% jump from the previous quarter.
Occupancy at MGM properties remains high at 94.5%, and the daily number of visitor arrivals reached 102,812 in the second quarter, a 19% rise compared to 2021 and 94% of the pre-pandemic figures. The daily gross gaming revenue of MGM China properties went up to MOP111.2 million (US$13.7 million).
Kenneth Feng, President and executive director of MGM China, credited the company's growth to its ability to anticipate and adapt to customer trends. MGM reiterated their commitment to bringing unique and quality experiences to their visitors while matching the Macau Government's vision for turning the city into a full destination for global tourists.
In addition to its financial success, MGM China has also been active in hosting notable events such as the MGM x RR1HK Culinary Masters Macau and the Artistic Swimming Elite Extravaganza. Zhang Yimou's residency show Macau 2049 celebrated its 100th performance and drew 30% of its audience from overseas visitors.
MGM Cotai is currently converting rooms into 60 new suites, aimed at luxury travelers. The 28 Alpha Villas at MGM Macau are now fully operational and well-received by high-end guests.
In conclusion, MGM China's record revenue and EBITDAR achievements in 2022 and beyond are a result of both product offering enhancements that attract high-value customers and disciplined operational management ensuring profitability.
- The expansion of premium room inventory in Macau's gaming and hospitality industry, as seen with MGM China, directly boosts revenue and has led to the introduction of new high-end offerings like the Alpha Club and the 28 Alpha Villas at MGM Macau.
- The casino and gambling sector is not limited to Macau, as MGM Resorts' geographic diversification has enabled the offset of slower performance in other regions and leveraged regional strengths like Macau for growth, with digital gaming and sports betting operations also contributing to operating income globally.
- The growth in Las Vegas, known for its casino-games, can also provide insights, as MGM China reiterated its commitment to bringing unique and quality experiences to their visitors, similar to the vision for turning Las Vegas into a full destination for global tourists.
