Slot play, rising occupancy rates help fuel MGM Resorts’ Q2 results

The company’s occupancy rate for the second quarter of 2021 was 77 percent, with weekends proving much more full at 94 percent, MGM Resorts Chief Financial Officer Jonathan Halkyard said during a quarterly earnings call Wednesday. In the month of June, when virtually all COVID-19 restrictions had been dropped, the occupancy rate jumped to 83 percent, and 96 percent on weekends, Halkyard added.

And that trend continued into the first part of the third quarter as well, with occupancy rates in July ticking up to 86 percent. Even as leisure travel stabilizes once the pent-up demand fades, the company believes the return of group business and convention travel will offset those numbers.

The company brought in $2.27 billion in revenues for the quarter ending on June 30, with $90 million in net income. The compares with $290 million in revenue and $940 million in operating losses during the same period in 2020, when casinos and many other businesses were forced to close their doors as the COVID-19 pandemic surged.

Part of that rebound was due to very strong performance in slot play, with MGM Resorts’ Strip properties seeing a 23 percent increase in slot handle compared with the same period in 2019, before the pandemic hit.

And the company is finally starting to draw back some of its older customers, as well, Halkyard said.

“For the first time since being impacted by COVID, we are now attracting the older 65-plus demographic to our Strip properties at levels commensurate with what we were seeing pre-pandemic,” he said.

The company highlighted the news that Vici Properties is acquiring the MGM Resorts spin-off MGM Growth Properties for $17.2 billion, a deal that is expected to close in the first half of 2022 and one that would send roughly $4.4 billion in cash to MGM Resorts.

Bill Hornbuckle, president and CEO of MGM Resorts, said Wednesday that the move gives the company more financial flexibility that will allow them to “intensify our focus on maximizing growth in our core business.”

MGM is betting big on mobile wagering and igaming as part of that growth.

Hornbuckle said said the company’s associated betting app, BetMGM, ranks as No. 2 in the mobile sports betting and igaming space. The company forecasts that BetMGM will generate more than $1 billion in net revenues in 2022.

MGM shares, traded on the New York Stock Exchange, closed Wednesday at $37.27 per share, up 32 cents, or .87 percent.

Contact Colton Lochhead at clochhead@reviewjournal.com. Follow @ColtonLochhead on Twitter.