Food and beverage
MGM Resorts‘ (MGM) wholly-owned domestic resorts derive over half of the net revenues from non-gaming operations including hotel, food and beverage, entertainment, and other non-gaming amenities. Casino companies, like Las Vegas Sands (LVS) and Wynn Resorts (WYNN), derive ~23% and 28%, respectively, from non-gaming operations.
Food and beverage revenues decreased by 3.9% quarter-over-quarter to $396 million. The revenues increased by ~9% year-over-year (or YoY) for the three months ending September 30, 2014. This was due to increased convention and banquet revenues. Also, several new outlets opened.
Key takeaways from the third quarter earnings call
Sarah Rogers, vice president of investor relations at MGM Resorts, said, “Food and beverage revenues were up 9% in the quarter and a lot of that was driven by catering business due to strong convention calendar. So, we should continue to see that grow, especially as corporate customers as a percentage of our convention customers grows and they now represent over 60% of our future bookings.”
In the next part of this series, we’ll discuss why MGM’s property earnings before interest, tax, depreciation, and amortization (or EBITDA) was driven by its Macau operations—despite uncertainties.