MGM eyes management agreement in Caribbean
On the heels of a strong third quarter, MGM Resorts International is now eyeing opportunities for growth in the Caribbean, Guardian Business can reveal, as
the major resort and casino company seeks to expand its market.
Attending the Caribbean Hotel Investment Conference and Operations Summit last week, Deborah Negrel Smith, the vice president of Caribbean & Latin America Development, said MGM International was seeking “management agreements” with investors in the region.
“Although we’re concentrated in Las Vegas, we continue to expand,” she added, pointing to ongoing projects in the Middle East, India and China.
“We are interested in using the model of management agreements for those looking to invest, whereby we lend the brand, consultation services and things of that nature.”
As part of the newly-formed Caribbean & Latin America division, Smith said the event at Atlantis last weekend was their first conference as they court interested parties.
In particular, she attended the Outward Chinese Investment to the Caribbean seminar and expressed interest in foreign collaboration.
Smith, who worked in China for MGM Hospitality for two years, is no stranger to Asian investment.
She said there are several collaborative efforts now in operation in China, which includes the formation of MGM China Holdings Limited – with shares listed on the Hong Kong Stock Exchange.
The MGM Macau property represents the company’s biggest project in China to date.
In April 2011, MGM Macau announced its first Initial Public Offering (IPO). MGM Resorts holds 51 percent and the public receives 20 percent.
More than $1.5 billion was raised from the IPO on the Hong Kong Stock Exchange.
MGM International has continued to experience improved growth.
According to MGM Resorts International’s third quarter results, U.S. operating resorts had revenue increases of 3 percent. Consolidated net revenue was $2.2 billion compared to $1.6 billion in the prior third quarter.
MGM Macau had adjusted cash flow of $150 million, up 80 percent year-over-year. VIP volumes grew to $23.1 billion in the quarter, according to company data, representing a 80 percent rise.
By the end of the quarter, MGM China had an approximate cash balance of $494 million and an outstanding debt balance of $551 million.