Less than half of MGM workers back

Second-quarter revenue down by 91 percent

MGM Resorts International has scaled back its workforce and certain amenities, such as buffets, since reopening its properties. Some of these cuts may be permanent.

The cost reductions come as MGM and other operators face less foot traffic on the Strip. MGM said occupancy percentages are in the 30s midweek and 50s on weekends.

On Thursday, newly appointed CEO and president Bill Hornbuckle said the company can reduce its domestic operating and corporate costs by $450 million compared with 2019 levels.

“We believe that when demand returns, we’ll be a much stronger company,” Hornbuckle said. “I accepted the role as CEO believing our long-term outlook remains positive and that our future is strong.”

The company reported $290 million in revenue during the second quarter, down 91 percent from the year prior. Consolidated operating loss was $1 billion, compared with $371 million in operating income in 2019.

CFO Corey Sanders said payroll is the company’s biggest expense; furloughs and layoffs have allowed the company to reduce costs significantly.

“We’re really comfortable where our labor components are. We have brought back less than 50 percent of our employees,” he said. “I’m not sure we’ll see a change in that any time in the near future.”

According to company regulatory filings, MGM had roughly 70,000 full-time and part-time domestic employees as of Dec. 31.

Certain amenities also could be on the chopping block.

The company is looking at whether every property needs a buffet or full room service and whether certain

casino floors can be downsized.

Hornbuckle said the company’s strong liquidity will allow it to continue pursuing long-term growth opportunities amid the pandemic, including an integrated resort opportunity in Osaka, Japan, expanded operations in Macao and continued growth with its sports betting and igaming brand, BETMGM.

Demand in Las Vegas was said to be better than expected, and high-quality customers and higher-than-normal table game hold helped all reopened properties, aside from Mandalay Bay, report positive cash flow.

‘Answering to demand’

The company was quick to reopen its Strip properties: Bellagio, New York-new York and MGM

Grand reopened on June 4, followed by Excalibur, Luxor, Mandalay Bay and Aria later that month. Vdara reopened July 16.

Hornbuckle said the properties’ performances back up the company’s reopening strategy.

“We were answering to demand,” he said. “We believe we can — and we’ve proven it today — continue to make a profit (with the reopened properties). … Frankly, we thought it was important to keep the brand alive and keep people motivated and excited to come to Las Vegas.”

Two properties have yet to reopen: The Mirage and Park MGM, which includes the Nomad hotel. Hornbuckle said the company’s not sure yet when they will return but said “we might take a look at Nomad first.”

“I can’t imagine, though it could be … an environment where they’re closed for the balance of the year,” he said.

Reopening plans will be based

largely on the state’s reaction to the pandemic because there tends to be more reservation cancellations when COVID-19 cases spike.

The success of MGM’S Las Vegas properties also depends on the return of entertainment, conventions and air travel.

Hornbuckle said smaller shows, such as those of comedians, probably will be the first to return. The city probably will have to wait for a full recovery before artists can perform in front of a sold-out T-mobile Arena.

As for conventions, MGM has lost some the first quarter of 2021 but lost only two “groups of substance” beyond that.

“Fundamentally, (conventions) want to come back,” Hornbuckle said. “Short term, it’s going to be challenging.”

Contact Bailey Schulz at bschulz@ reviewjournal.com or 702-383-0233. Follow @bailey_schulz on Twitter.