LUXOR? MIRAGE? CIRCUS CIRCUS? NEXT PROJECT UNCLEAR FOR MGM

couple new restaurants (and) the room product as it’s being unveiled to the customers have been extraordinarily highly received. The returns on capital on Monte Carlo, I would say, would be some of the highest we’ve ever committed over the last five years, well in excess of any new build.”

As a result, Murren said, “that’s the kind of project that I think you should look toward the future for us.”

Which MGM property would be chosen next for a remodel? At first glance, it would seem that some of the older ones, such as Circus Circus, would be likely candidates.

The family-themed property on the north Strip has expanded over the decades but has never undergone a major refurbishing. The only problem with that theory is that customers seem to like Circus Circus just the way it is.

“Circus Circus is doing really well from a cash-flow perspective,” gaming analyst John Decree said. “It’s firing on all cylinders.”

Decree said the Monte Carlo made sense because it activated a new area of the Park. And for that same reason, New York-new York might also be a candidate, if only because it’s also next to the Park and T-mobile Arena. Still, he said, New York-new York’s facade was redone recently, so that might take it off the list.

Anthony F. Lucas, a professor of gaming at UNLV’S William F. Harrah College of Hotel Administration, said if the deciding factor was what rooms were most in need of a reboot, the Luxor would be a good candidate.

In April 2016, Murren told a Sun reporter that MGM had longterm plans to remodel both the Luxor and Excalibur.

“Excalibur is going to get a tremendous amount of investment, and Luxor itself also will,” Murren said at the time. “My feeling there is that it is a great name — Luxor — and I doubt very much we’d ever change the name. We’ll keep Excalibur, as well. But there are some long-range plans to invest in both of those properties.”

But these decisions are often less about what hotels are in need of upgrades and more about what changes will bring the most return for the company’s investment, said Lucas, who has worked for Harvey’s Resort, Harrah’s, MGM Grand and Palace Station.

If, for example, there’s more potential to make money from redoing the Mirage, it could be the next project.

“If you look at the broader market, let’s say, and call it the Strip, you also have to look at the submarkets, like south Strip or center Strip,” he said. “Maybe investing in the center Strip might get a better return on your money, so that’s where you invest first. The Mirage may have more potential in terms of a return on investment.”

Once companies settle on a geographic location, Lucas said, they then evaluate the competition in terms of market segments.

Once they do that, Lucas said, they might see more potential in the midmarket area or more potential in creating a premium-market Strip property.

“If I were going to do it, that’s what I’m doing,” he said. “I’m looking at all my properties and doing a needs assessment and then looking at the broader market and who are the direct competitors in each of submarkets.”

That’s similar to how Murren described the reasoning behind the Monte Carlo’s refresh during the earnings call.

“(We’re) taking a property that is well-positioned geographically but poorly positioned in the market to a property that is right at the center of the Strip and with extremely high brand recognition, and that’s driving a lot of revenue,” he said. thomas.moore@gmgvegas. com / 702-513-2612 / @thdomo