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We’re now over 3 full quarters, removed from the Oct. 1st, 2017 shooting, a night witnessed with horror and helplessness as a coward opened fire on concertgoers below attending the Route 91 Harvest Festival. Considering the lives lost, altered and the families permanently impacted, it seems trivial to even think about how the events of October 1 affecte he business, and financial results at Mandalay Bay.
I do, however, think people (myself included) are interested in Mandalay Bay’s recovery as we approach the 1 year anniversary of that terrible night. Is Mandalay Bay’s image improving with travelers? Are people still avoiding the property? Is Mandalay going to need to renovate and re-theme to attract business? Below, we try to explain the data in a way the average person will understand.
As we look at the charts below detailing how the shooting affected Mandalay, keep in mind that October first was the first day of Q4 2017, meaning the entirety of that quarter’s results were affected by the events of that night.
We added MGM Grand’s numbers to the charts below for comparison purposes.
First, we took a look at the Average Daily Rate (ADR) that Mandalay Bay received for room nights sold – essentially their average booking price. The average rate charged for rooms dropped from $213 a night in Q3 2017 pre-tragedy to $195 a night after. Rates have essentially returned to normal in Q2 of 2018 at $211 per night.
Mandalay was also hit hard by a steep drop in occupancy rate, defined as the % of their available room nights they were able to book. Both Mandalay and MGM Grand’s occupancy plummeted following the events of October 1, but Mandalay’s dip was certainly deeper. Mandalay dropped from 94.2% occupancy in Q3 2017 to 80.5% in the following quarter. Rates have normalized since and have bounced back to 93.4% as of Q2 2018 (Summer 2018).
REVPAR or Revenue per Available Room is calculated by taking the total amount of money made from room bookings and dividing that by total rooms available (whether you sold them or not). Because occupancy bottomed out at an anemic 80.5% after the shooting on the first day of Q4 2017, Mandalay’s REVPAR was severely impacted – dropping from $201 to $157 nearly overnight.
Not surprisingly, the sharp decreases in occupancy and spend on property following Oct. 1 caused total revenues at Mandalay to dip in Q4 2017 as people stayed away. The revenue figure takes into account all categories of spending to include rooms, gaming and entertainment. We can see a pretty dramatic recovery however, in the following quarters.
Lastly, Adjusted EBITDA, or profit, the property generated took a massive initial hit, however, has also began to recover recently.
MGM Resorts leadership weighed in on Mandalay’s bounce back on their Q2 2018 earnings call which took place on Aug 2nd, 2018 saying “Mandalay is still recovering as a property and is not fully back yet.” And they are seeing “some softness around the event timing” referencing the 1 year anniversary of the shooting. “The rest of the portfolio is pretty much back and Mandalay is probably 80% back”.
We’re hopeful for the employees that depend on Mandalay Bay for a living, that things continue to improve and that the anchor of the south end of the strip can return to being a destination for Las Vegas travelers.
All revenue, ADR, REVPAR and EBITDA information was taken from MGM Resorts quarterly earnings reports.