By Beth Jinks - Sep 30, 2010
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MGM Resorts International, the biggest casino operator on the Las Vegas Strip, projects a “very solid” October as conventions return and vacationers help fill the city with last-minute bookings.
“The convention business looks very healthy, the consumer, based on rooms booked in that 30-day window, looks like he and she wants to come out here and have a little fun,” Chairman and Chief Executive Officer Jim Murren said in an interview.
The durability remains to be seen, Murren said. Year-to- date travel through the Las Vegas airport is down 2.4 percent as of August, the Clark County Department of Aviation said yesterday. While international visitors are increasing, spending by U.S. tourists is still weak, Murren said.
“We all are frustrated about the degree of the recovery and the very slow pace,” Murren said.
“It’s yet to be seen,” Murren said when asked about his confidence in the forecast. “We haven’t finished the year yet, I think the trend is in that direction,” led by stronger rates at higher-end resorts like Bellagio.
Resorts in the largest U.S. casino and conference market are struggling to raise prices after slashing rates during a record two-year slump.
MGM Resorts added almost 6,000 rooms when it opened CityCenter’s three hotels in December.
The CityCenter venture with Dubai World became profitable in the third quarter after losses for the first six months, Murren said. That’s in line with prior predictions of second- half profitability.
Occupancy at the $8.5 billion hotel, condominium and mall development, which pushed
MGM Resorts to the brink of insolvency last year, exceeded 80 percent in the third quarter with help from conventions, Murren said. The partners had to contribute more money to CityCenter last quarter, when it was assigned an equity book value of $2.65 billion.
“CityCenter’s profitable now, it’s been profitable all quarter,” Murren said. “We didn’t do as well as I hoped we would do when we first opened.”
“We’re winning more than our fair share, and our market share has moved up,” Murren said. Convention room rates for 2011 are “absolutely higher” than this year, he said.
MGM Resorts added 13 cents to $11.36 at 10:41 a.m. in New York Stock Exchange composite trading. Shares of the company, in which Kirk Kerkorian holds a 37 percent stake, have gained 23 percent this year before today.