MGM Resorts is one of the biggest names in global hospitality with properties across Las Vegas, the rest of the United States, and increasingly the world.
We recently caught up with CEO Bill Hornbuckle to discuss what is going on at the business as well as in the wider industry.
Hospitality Investor: MGM Resorts has undergone significant transformation over the years, from its origins in the gaming industry to becoming a global hospitality powerhouse. What factors have driven this evolution, and what is your vision for the company's future direction?
Bill Hornbuckle: Our vision for MGM Resorts is simple: to be the world's premier gaming entertainment company by providing guests with exhilarating experiences at our iconic properties and through our digital platform. To achieve this vision, we are focusing on four key strategies.
First, we are leveraging our strong free cash flow to make disciplined capital investments in premier and developing gaming markets, both here in the US and internationally. Second, we are creating opportunities to capitalize on demographic shifts in key domestic markets toward higher-end consumers, particularly in Las Vegas, where we are seeing a shift toward higher-end offerings and appealing to luxury customers We intend to win their business and their loyalty.
Third, we are driving organic growth by continuing to build our digital platform and expanding the scale and reach the MGM Resorts brand – in both the digital and brick and mortar space worldwide. This has included launching BetMGM internationally, expanding our digital jurisdictional access with the acquisition of Swedish-based online gaming company LeoVegas and seizing new integrated resort opportunities like our development in Japan and in emerging markets like Thailand and the UAE.
Fourth, we are building highly tailored, highly targeted experiences around the desires of our customers. We’re focused on knowing our customers and providing them with experiences they can’t get anywhere else.
We believe this strategy will drive MGM Resorts’ continued evolution and deliver our next wave of growth.
Hospitality Investor: Last year, you announced a significant partnership with Marriott. What was the thinking behind the deal and how has it played out?
Bill Hornbuckle: We view the Marriott deal as a premier partnership that can help us win new customers and develop brand loyalty. Since the March launch, we've already taken in 190,000 direct bookings with customers, on average, coming in at higher rates and spending more at our properties. We’re excited to share that we’ve booked about 75% over our initial expectations.
This represents a significant moment for both our companies – expanding our reach, customer base and opportunity to build on the transformational growth of recent years. Through this partnership, more than 180 million Marriott Bonvoy members have direct access to and benefits with MGM’s more than a dozen Las Vegas Strip resorts, along with our properties throughout the country. It also unleashes opportunities and benefits for MGM customers – opening Marriott’s global portfolio of more than 8,500 properties to more than 40 million MGM Rewards members.
One interesting thing we’re finding is that this partnership is spreading bookings across our Las Vegas and regional destinations. Borgata in Atlantic City is a popular choice, as well as our legacy properties in Las Vegas. And positive feedback from our guests is at an all-time high, which is a tribute to the tens of thousands of MGM employees dedicated to giving each one of our guests the best hospitality experience.
Longer term, we also see this partnership as a pipeline for new group leads. So far, it's working exactly as we'd hoped, and we plan on leveraging this relationship to introduce even more Marriott customers to the MGM Resorts brand and portfolio.
Hospitality Investor: The concept of experiential travel is gaining momentum, with travelers seeking unique and authentic experiences. How does MGM Resorts differentiate its offerings to cater to this demand for memorable experiences?
Bill Hornbuckle: This idea isn’t new for MGM Resorts. But we continuously challenge ourselves to build on this aspect of our brand to deliver even more personalized, targeted and exhilarating experiences for our guests. One such area is sports tourism.
Attending a Formula 1 race or the Super Bowl is a once-in-a-lifetime event – a thrill millions of people would love to experience. Within the next four years or so, both the FIFA World Cup and Summer Olympics will be coming to America and both events will be held in Los Angeles, which will create significant opportunities for Las Vegas. We're working to amplify travel and tourism around sporting events to amplify the US – and especially Las Vegas – as a premier destination.
We're looking to package our world-class hotel, leisure and entertainment offerings with compelling sporting events that can give today's travelers the kind of unique, memorable experiences they're looking for.
Hospitality Investor: You've really expanded on the digital side of things through your BetMGM brand. How does this fit within the broader MGM Resorts business strategy?
Bill Hornbuckle: We see sports betting as an opportunity to introduce millions of sports fans to the MGM Resorts brand and continue building brand loyalty and our customer base. Fans who love BetMGM are potential customers at our iconic properties in Las Vegas or at exciting MGM destinations across America.
Our goal is to offer the world's best entertainment experiences – whether physically or digitally – in ways that introduce and win customers to MGM.
BetMGM is also building a reputation as a credible and trusted oddsmaker, with its recent agreement to be the official sports odds provider to The Associated Press.
Hospitality Investor: Do you see any particular markets as being attractive for expansion overseas?
Bill Hornbuckle: We see Japan as a huge opportunity, and we're on track to start construction later this year on what will be an amazing $10 billion integrated resort in the great city of Osaka. Frankly, we're honored that Japan chose MGM Resorts to develop what will be one of the great tourist destinations in the country. It's taken years of hard work and partnership, but we believe it's a huge step forward in fulfilling our vision to make MGM Resorts the world's premier gaming entertainment company.
We're also working closely with officials and partners in the UAE to bring a world-class resort to Dubai. Additionally, we're exploring exciting new markets such as Thailand, where many public and business leaders see gaming resorts as an opportunity to boost tourism and economic growth.
Hospitality Investor: Bill, over a several decades-long career, you’ve had a ringside seat to the expansion of Las Vegas as a destination. Is the city still as exciting as it once was and where do you see growth opportunities?
Bill Hornbuckle: What’s so compelling about Las Vegas is that it’s always reinventing itself – and with each new iteration, it becomes something we never before imagined. Right now, we're in the midst of a groundbreaking new era – the transformation of Las Vegas into the most sophisticated, mainstream sports and entertainment capital of the world.
Think about it. Just a few short years ago, Las Vegas had no professional sports presence. Now this desert oasis is one of the NHL's most passionate hockey towns – we had to shut down the Las Vegas Strip as 200,000 fans celebrated the Golden Knights' Stanley Cup parade!
And, at a time when Caitlin Clark has elevated the status of the WNBA to new heights, we're home to the WNBA world champion Las Vegas Aces, in addition to the NFL's Las Vegas Raiders, and in a few years, a Major League Baseball team.
Within the past 12 months, we've hosted both the Super Bowl and a Formula 1 race, drawing hundreds of millions of fans to Las Vegas. We see these events as huge trip makers – growth opportunities that introduce more and more people to the world-class entertainment experiences only Las Vegas provides. And, it’s important to note that only MGM Resorts has the footprint that allows our guests the opportunity to fully maximize all these experiences.
Our entertainment choices have also taken it to a new level recently. Our city hosted Taylor Swift, U2 and Beyonce in the same year. And we’re proud to host legends like Bruce Springsteen and Pearl Jam at our very own arenas in just the last few months. We’re truly a world-class destination for A-list entertainers.
Hospitality Investor: You're a key member of the U.S. Travel and the head of the US Department of Commerce Travel and Tourism Advisory Board (TTAB). What would you say are the biggest challenges affecting the US travel market at the moment?
Bill Hornbuckle: I see two big challenges that we're facing right now.
First, delivering a more modern, seamless and secure travel experience. Solving that challenge requires upgrading our infrastructure and roadways, improving connections between all means of travel – from airports to mass transit – to create a smoother journey for travelers, enhancing air travel through airport modernization, high-tech air traffic control systems and more air traffic controllers, and cutting down on visa wait times, which are one of the top deterrents for many international visitors.
Second, the US must pursue a recoupling strategy when it comes to travel with China. Travel from China – one of the most lucrative overseas markets – is running at just 38% of pre-pandemic levels. That's a problem not just for the travel industry, but for millions of small businesses across America that benefit from traveler spending.
We need a coordinated approach across government and industry stakeholders to revive international travel, especially from China. That means reducing visa wait times, as I noted. If we don't, the US risks losing 39 million visitors and $150 billion in spending over the next decade. We also need to increase the number of flights between China and the US, which are running at a fraction of pre-pandemic levels.
Finally, America needs to up its game when it comes to competing for Chinese travelers. Countries like Thailand and Dubai are working aggressively to draw Chinese visitors who once would have come to the U.S. This is a competition we need to win.
The travel industry is already a huge driver of America's economy, and we have a lot of room for growth. We need a coordinated approach by all government and industry stakeholders to unlock travel's full potential.