The Short Take:
- The average daily rate decreased year-over-year for all but two of MGM’s Las Vegas hotels
- ADR for the company’s Las Vegas Strip hotels declined 1.9% from $160 last year to $157 this year
- The worst performing hotel based on the percentage change in YOY ADR was New York-New York which saw its ADR decline this quarter by 6.1%
The average daily rate (ADR) at all but two of MGM’s Las Vegas hotels decreased in the third quarter of 2018 compared to the third quarter of 2017. The sole exceptions were at the Park MGM, but that is a special circumstance because the property has been under construction during its conversion from the Monte Carlo. The MGM Grand’s ADR was flat year-over-year.
The drop in ADR is most likely a contributing factor to the 1.2% decrease in the Rooms revenue segment for Q3 2018 which we discussed in an earlier article.
At the end of this article we provide two charts which show the Q3 2018 average daily rate for each of the company’s hotels as well as the year-over-year percentage change in the ADR. In the meantime, we’d like to point out a few of the standout ADR numbers.
Looking at all of the Las Vegas strip hotels combined, the ADR for Q3 was $157. It’s important to remember that this number includes a wide range of properties, from the high-end Bellagio and Mandalay Bay all the way down to Circus Circus and the Excalibur.
Back in the third quarter of 2017, the company’s Las Vegas strip hotels had an ADR of $160. While this year’s ADR was just $3 below last year’s, that represents a decrease of 1.9%. When you take into account that the MGM’s strip hotels account for over 40,000 rooms that small drop in ADR adds up to big money.
The MGM hotel with the largest year-over-year drop in ADR for the quarter on percentage terms was New Your-New York. NYNY’s ADR fell 6.1%, from $148 last year to $141 this year. Close behind NYNY was the City Center hotel Vdara which saw its ADR decline from $210 to $199, or a 5.2% YOY slide.
Putting aside the Park MGM due to the construction issue we discussed earlier, the “best” performing hotel on an ADR growth basis was the company’s namesake MGM Grand. The Grand’s ADR was flat at $181. Also performing better than average was the Aria which had an ADR this quarter of $248, just a dollar less than the same quarter last year, or a 0.4% drop.
Finally, here are the two charts that show each MGM hotel’s Q3 2018 ADR as well as the year-over-year change:
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