MGM Q2 Earnings: Resort Fees Affect Bottomline?

MGM recently reported earnings. Did their policy of charging Resort Fees negatively affect their bottom line? MGM Resorts International recently (August 8th, 2011) reported Q2 earnings. As a whole, the company beat the street’s earnings expectations. In Las Vegas, MGM is the updisputed leader in charging resort fees, as fees are tacked on at each […]

MGM recently reported earnings. Did their policy of charging Resort Fees negatively affect their bottom line?

MGM Resorts International recently (August 8th, 2011) reported Q2 earnings. As a whole, the company beat the street’s earnings expectations.

In Las Vegas, MGM is the updisputed leader in charging resort fees, as fees are tacked on at each & every MGM owned resort.

There is a large, vocal community that is vehamitley against resort fees. But does the general public either:

A) know about these fees in advance?

B) care enough to switch hotel brands?

As the saying goes, money talks (avoiding MGM chained resorts) and bullshit (bookings) walks.

Within the spectrum of Resort Fees, it appears that BS wins. MGM’s Vegas properties continued to grow in the second quarter. Here are is a selection of Vegas related quotes from the companies latest investors conference call:

Bobby Baldwin – CEO of City Center, Chief Desgin for MGM Resorts International

Re: Aria – Operating results were driven by a 90% hotel occupancy

Vdara has increased rate and occupancy in the quarter

Jim Murren – CEO of MGM Resorts International

Back here in Las Vegas, I recall that on our last call we talked about a guidance of Strip RevPAR we thought would be up in the mid-single digits in the second quarter. We actually surpassed that goal and reported RevPAR up 10% due to a nice increase in short-term bookings and really strong demand across our portfolio.

It appears that Resort Fee’s are not a negative impact on MGM’s bottom line. In-fact, previous earnings reports point to the Fees as being revenue drivers.

While a number of upset patrons oppose these Fees, on the whole travelers continue to flock to Las Vegas based MGM Casino’s & Resorts.

3 comments

  1. Bill Fisher

    Tell MGM International that I visit Las Vegas four times each year and since the resort fee began, I avoid all their properties.

  2. Doug Willis

    Resort fees what a con
    No matter how the idiots at the top dress this up
    We the guests are being ripped off.
    Looks like a new mafia is in town!!
    Vegas needs to take a good hard look at it’s self
    As it is not the only gaming resort in the world..

  3. Pingback:Resort Fees Rising Faster Than Gas Prices | Resort Fees.com

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