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MGM Mirage Retooling MGM Grand Macau

Last week the folks from MGM Mirage, part owners of MGM Grand Macau, held their quarterly earnings investor call wherein they discussed some of their strategies for improving performance at MGM Grand Macau.

One of the most notable changes is that MGM Mirage has hired Grant Bowie (and the Spiders From Mars?) to replace Bob Moon as President of MGM Grand Macau. Moon will be returning to his prior gig heading up MGM Mirage's international operations. Bowie comes to MGM Grand Macau from neighbor Wynn Macau where he served as President. It's unclear if Bob Moon was pushed out due to MGM Grand Macau's performance or if he was temporary to begin with. Anonymous tips are welcome.

In addition to the exec change, MGM Grand has decided to do some retooling to their property to expand table capacity for potential junket agreement expansion. The 34th and 35th floors of the hotel will be converted from hotel suites to VIP gaming salons, to be completed in August 2009. Initially, they had planned to put some mass market tables in there but have apparently decided to go full steam focusing on junket VIP play.

MGM Grand Macau has also begun to use MGM Mirage's "International Marketing Organization" to help bring in players. It isn't clear what the "IMO" is... could be player development intelligence, could be straight up marketing panache.

Another thing they mentioned in the call is the difficulty MGM Grand Macau is having due to it being surrounded on three sides by construction (One and Mandarin Oriental II to the west, Royal Arc to the east, Encore Tower at Wynn Macau to the north. If anyone can report on foot traffic conditions from StarWorld to MGM, please leave a comment below.

They also noted difficulty accessing the property via taxi - specifically the lack of a right hand turning lane into the property from Avenida Marginal de Baia Nova. Currently, auto traffic to the porte cochere has to drive past the property to the Macau Tower traffic circle, turn around then come back past Nam Van Lake en route the property. They listed a number of reasons why getting a simple turning lane installed is a bureaucratic nightmare. Apparently, all reclaimed land is under the direct jurisdiction of the Chinese government, not the Macau SAR. Widening the road to the south will require usage of reclaimed land to the south, therefore involving the Chinese government in negotiations and whatnot. Getting the turning lane is Grand Bowie's "number one job" when he assumes the position.

Overall MGM execs are reasonably happy with the level of play at MGM Grand Macau but definitely feel they can squeeze a lot more juice out of the lemon in the VIP and mass market sectors by addressing the above issues. With all the juice squeezing they're doing, they should consider renaming the property Tropicana (after the U.S. based orange juice company.)


Comments & Discussion:

What they said about the construction blocking up pedestrian traffic is true - but only if you are with kids.

I walked through the back entrance from Wynn Macau, which is just across a dead-end road to MGM Macau. However, the only entrance they had there led straight to the casino, so my younger brother wasn't able to get in. We could have walked past one side of the MGM complex to get to the main lobby entrance, were it not for a huge construction site blocking our way. As a result, we had to walk around the entire perimeter of the MGM complex to get to the entrance, which was a huge pain.

Also from my trip, I managed to snap a few photos of some of the developments under construction on Cotai. Please follow this link:

Foot traffic from Starworld and Wynn is no problem. However what is really becoming a problem is foot traffic from the other side of the main road where the Lisboa is. Its getting rather dangerous as people cross to get from Lisboa to the Starword/Wynn and on to the MGM. There is an underground tunnel that lets out at the front of Wynn, but to get the Starworld and later points is a chore.

The bus service issue is a bit of canard. Yes to get off at the front of the hotel is a pain, but you could get easily to the back entrance by U-turning on the side street, or simply letting people off on the other side (light traffic down that street, which again is why a U-turn is possible as well). The taxis have no problem with such an arrangement. They could also go through the rotary bordering the Wynn and Lisboa and go around. Of course gamblers would see those properties prominently, unlike the current route.

Expect construction woes to continue. The empty lot across from the MGM and the Arc will be a luxury mall (partially funded by MGM I have heard). So even after the completion of the One/MO and the Arc there will be still be cranes around for a while. The Wynn Encore tower is really a bit of hyperbole on the part of MGM in my opinion. The development is rather pocket sized and well contained.

I have no specifics on the management shake-up, however it was mentioned by a few that the property is very "troubled". Whether that is because of the management change or a reaction to, I do not know.

In my trips there I have never seen a lack of players. However it does lack the energy of the others. Perhaps its not as crowded and therefore not as energetic. I do not know if its related, but the MGM is also making a strong play to be nightlife center for the SAR with the central bar at the Casino hopping more so than others.

The one good thing about MGM is their restaurants and bar, but it is true that it is very hard to reach them. Whenever I go to the place by car, I make the Grand Casino Tour, as I will arrive from the Macau Tower side, then leave via Wynn, old Lisboa, Grand Lisboa, etc. and it has happened frequently that we would be on the “wrong” side of the casino, could not find a parking place and decided to just go elsewhere, as making use of their valet would require another 15 minutes drive. This simply must cost them a fortune. If that were not bad enough, the Americans working there seemed to party every night in the Lion’s Bar reserving the tables for themselves and not offering their best clients a seat!

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