MGM Mirage, Dubai World's joint venture partner in the US$8.5 billion (Dh31.22bn) CityCenter complex in Las Vegas, is anticipating that the resort will provide a much needed boost to the company's bottom line.
Vegas venture a good bet despite losses, MGM says
MGM Mirage, Dubai World's joint venture partner in the US$8.5 billion (Dh31.22bn) CityCenter complex in Las Vegas, is anticipating that the resort will provide a much needed boost to the company's bottom line. Jim Murren, the chief executive of MGM Mirage, made the comments after the gaming operator on Thursday reported a fourth quarter loss of $433.9 million, worse than analysts had expected.
Dubai World, through its subsidiary Infinity World, owns 50 per cent of CityCenter, which opened in December amid slumping revenues, soaring unemployment and foreclosures in the US desert city. Dubai World, which is working on restructuring $22bn of debt, also took a 9.5 per cent stake in MGM Mirage in 2007. "Despite the economic turmoil that we have seen, we remain ever more confident that CityCenter will be not only an extraordinarily profitable enterprise for our company and our partner, but it has forever changed the dynamic here in Las Vegas and the competitiveness of our company," said Mr Murren, who is also the chairman of MGM Mirage, the largest gaming operator on the Las Vegas strip.
CityCenter's showpiece, the 4,004-room Aria gaming resort, which opened on December 16, earned operating income of $7m in its first 15 days of operations, MGM Mirage said. The 27-hectare Las Vegas Strip resort also includes a Cirque du Soleil Elvis show, 2,400 condominiums and luxury non-gaming hotels including Las Vegas's first Mandarin Oriental. There is also a 46,450 square metre retail and entertainment district and a $40m fine art collection featuring works by artists such as Henry Moore.
CityCenter, said to be the largest, single privately funded development in US history, has hired 12,000 staff. Mr Murren described the development as an excellent "marketing tool" for MGM Mirage and Las Vegas. "This is going to have a positive impact on the city and certainly it is going to have a very positive impact on us." MGM expects room revenues and business to pick up in the second half of the year.
"We have seen the worst of the downturn," said Mr Murren. "Make no mistake, we don't expect a rapid recovery here. The environment remains challenging and is going to remain so for some time to come, but we see light at the end of the tunnel." firstname.lastname@example.org