MGM Resorts International (MGM): Business Model Canvas [10-2024 Updated]

In the competitive landscape of the hospitality and gaming industry, MGM Resorts International (MGM) stands out with its innovative business model that seamlessly integrates various revenue streams and customer engagement strategies. By leveraging key partnerships, a diverse range of activities, and a strong brand presence, MGM creates unparalleled experiences for its customers. Join us as we dive deeper into the Business Model Canvas of MGM Resorts International, exploring how this iconic company maintains its position as a leader in the market.

MGM Resorts International (MGM) - Business Model: Key Partnerships

Collaborations with online gaming platforms like BetMGM

MGM Resorts International has formed a significant partnership with BetMGM, a leading online gaming platform. As of September 30, 2024, MGM's share of operating income from BetMGM was reported at $3.2 million for the quarter, and a loss of $67.8 million for the year-to-date period. BetMGM has been a crucial player in MGM's strategy to expand its presence in the rapidly growing online gaming market.

Strategic alliances in the hospitality and entertainment sectors

MGM Resorts has established strategic alliances with various companies in the hospitality and entertainment industries. These collaborations enhance MGM's service offerings and market reach. For example, MGM has partnerships with entertainment companies to host events and shows at its properties, contributing to increased occupancy and revenue. The Las Vegas Strip Resorts saw a 1% increase in net revenues for the three months ended September 30, 2024, attributed in part to strong entertainment offerings.

Partnerships with local governments for regulatory compliance

Maintaining compliance with regulatory standards is essential for MGM. The company collaborates with local governments across its operational regions to ensure adherence to gaming regulations and other legal requirements. This partnership is vital for mitigating risks associated with potential legal challenges. MGM's commitment to regulatory compliance is reflected in its operational strategy, helping to maintain its licenses and operational integrity in various jurisdictions.

Joint ventures for international expansions, including MGM China

MGM Resorts has entered into joint ventures to facilitate its international expansion, notably in Asia. MGM China, a subsidiary, represents a significant aspect of this strategy. As of September 30, 2024, MGM China reported an Adjusted Property EBITDAR of $237.4 million for the quarter, reflecting a 5% increase compared to the prior year. The joint venture structure allows MGM to share investment risks while leveraging local market expertise, which is crucial for navigating the competitive landscape in international markets.

Partnership Type	Partner	Key Financial Metrics	Impact
Online Gaming	BetMGM	Operating Income: $3.2M (Q3 2024), Loss: $67.8M (YTD)	Expansion in online gaming market
Hospitality/Entertainment	Various Entertainment Companies	Net Revenue Increase: 1% (Q3 2024)	Enhanced service offerings and occupancy rates
Regulatory Compliance	Local Governments	Compliance costs not specified	Risk mitigation and license maintenance
International Expansion	MGM China	Adjusted Property EBITDAR: $237.4M (Q3 2024)	Growth in Asian markets

MGM Resorts International (MGM) - Business Model: Key Activities

Management of casino operations and gaming activities

MGM Resorts International operates multiple casinos, with a significant portion of revenue derived from gaming. For the three months ended September 30, 2024, casino revenue from Las Vegas Strip Resorts was $476.4 million, while Regional Operations generated $692.7 million in casino revenue. In MGM China, casino revenue reached $800.2 million for the same period.

Key gaming statistics for MGM Resorts include:

Category	Las Vegas Strip Resorts	Regional Operations	MGM China
Table Games Drop (Q3 2024)	$1.386 billion	$1.023 billion	$3.443 billion
Table Games Win (Q3 2024)	$328 million	$209 million	$858 million
Slot Handle (Q3 2024)	$5.920 billion	$6.952 billion	$4.648 billion

Development and maintenance of resort properties

MGM Resorts has made substantial capital investments in maintaining and developing its properties. For the nine months ended September 30, 2024, capital expenditures totaled $747 million, which included significant investments in information technology and room remodels. This investment is crucial for maintaining competitive standards and enhancing guest experiences across its resorts.

As of September 30, 2024, MGM Resorts owned and operated 15 properties, with the Las Vegas Strip Resorts consisting of notable locations such as Bellagio, MGM Grand, and Mandalay Bay.

Delivery of entertainment and dining experiences

MGM Resorts focuses on providing a diverse range of entertainment and dining options. For the three months ended September 30, 2024, food and beverage revenue at Las Vegas Strip Resorts was $574.6 million, reflecting a 5% increase compared to the prior year. Additionally, entertainment, retail, and other revenues reached $337.9 million during the same period, indicating a 6% increase.

Key performance indicators for dining and entertainment include:

Category	Las Vegas Strip Resorts	Regional Operations	MGM China
Food and Beverage Revenue (Q3 2024)	$574.6 million	$116.4 million	$64.4 million
Entertainment Revenue (Q3 2024)	$337.9 million	$54.8 million	$12.9 million

Marketing and customer engagement initiatives

MGM Resorts employs extensive marketing strategies to enhance customer engagement. The company reported $4.183 billion in net revenues for the three months ended September 30, 2024, a 5% increase year-over-year, largely attributed to improved marketing and promotional activities. The adjusted EBITDAR for the same period was $1.135 billion, demonstrating effective cost management in conjunction with marketing efforts.

Marketing metrics include:

Metric	Value (Q3 2024)
Net Revenue	$4.183 billion
Adjusted EBITDAR	$1.135 billion

MGM Resorts International (MGM) - Business Model: Key Resources

Extensive portfolio of gaming and hospitality assets

MGM Resorts International operates a significant portfolio of gaming and hospitality properties. As of September 30, 2024, the company reported net revenues of $4,183,138,000 for the third quarter, with a notable contribution from the Las Vegas Strip Resorts, which generated $2,132,213,000 in net revenues. The key properties include:

• Bellagio
• MGM Grand Las Vegas
• ARIA Resort & Casino
• Mandalay Bay
• The Cosmopolitan
• MGM Cotai and MGM Macau in China

Strong brand recognition and reputation

MGM Resorts has established a strong brand presence globally, particularly in the gaming and hospitality sectors. The company's reputation is reflected in its ability to attract high volumes of visitors, resulting in a Las Vegas Strip Resorts occupancy rate of 94% for Q3 2024. This strong brand equity supports higher average daily rates (ADR), which reached $243 in Q3 2024, up from $236 in Q3 2023.

Skilled workforce across various operational areas

MGM Resorts employs a highly skilled workforce, essential for maintaining high service standards across its operations. As of September 30, 2024, the company reported an increase in payroll-related expenses, indicative of its investment in human resources. The company is committed to employee training and development, ensuring a skilled workforce capable of delivering exceptional customer service.

Financial resources for capital investments and expansion

MGM Resorts International maintains robust financial resources. As of September 30, 2024, the company had cash and cash equivalents amounting to $3 billion. Additionally, MGM's total principal amount of indebtedness was $7 billion, with significant reductions in interest expenses due to strategic debt repayments. Planned capital expenditures for 2024 are estimated at approximately $300 million to $350 million domestically, reflecting the company's commitment to maintaining and expanding its portfolio.

Key Financial Metrics	Q3 2024	Q3 2023	Change (%)
Net Revenues	$4,183,138,000	$3,973,183,000	+5%
Occupancy Rate (Las Vegas Strip)	94%	92%	+2%
Average Daily Rate (ADR)	$243	$236	+3%
Cash and Cash Equivalents	$3,000,000,000	N/A	N/A
Total Indebtedness	$7,000,000,000	N/A	N/A
Planned Capital Expenditures	$300,000,000 - $350,000,000	N/A	N/A

MGM Resorts International (MGM) - Business Model: Value Propositions

Integrated resort experiences combining gaming, hospitality, and entertainment

MGM Resorts International offers a unique integrated resort experience that combines gaming, hospitality, and entertainment across its properties. The Las Vegas Strip Resorts segment generated net revenues of $4.01 billion for the three months ended September 30, 2024, marking an increase from $3.84 billion in the previous year. This segment includes renowned resorts such as Bellagio, MGM Grand, and Aria, which feature casinos, hotels, restaurants, and entertainment venues all within close proximity.

Key Metrics	Q3 2024	Q3 2023
Net Revenues (Las Vegas Strip Resorts)	$4.01 billion	$3.84 billion
Casino Revenue	$2.12 billion	$2.05 billion
Rooms Revenue	$883 million	$827 million
Food and Beverage Revenue	$755 million	$698 million

High-quality customer service and luxurious accommodations

MGM Resorts emphasizes high-quality customer service and luxurious accommodations, reflected in its occupancy rates and average daily rates. For the three months ended September 30, 2024, the occupancy rate for Las Vegas Strip Resorts was 94%, compared to 92% in the prior year. The average daily rate (ADR) increased to $243 from $236, showcasing the company's commitment to providing premium services.

Key Hotel Statistics	Q3 2024	Q3 2023
Occupancy Rate	94%	92%
Average Daily Rate (ADR)	$243	$236
Revenue per Available Room (RevPAR)	$229	$216

Diverse dining options and entertainment events

MGM Resorts offers diverse dining options and entertainment events that cater to various customer preferences. The food and beverage revenue from Las Vegas Strip Resorts increased by 5% year-over-year, reaching $574 million for Q3 2024. The company hosts numerous entertainment events, including concerts and shows, attracting both tourists and locals.

Food and Beverage Revenue Growth	Q3 2024	Q3 2023
Food and Beverage Revenue	$574 million	$545 million
Growth Rate	5%	N/A

Commitment to responsible gaming and community engagement

MGM Resorts demonstrates a strong commitment to responsible gaming and community engagement. The company has initiatives in place to promote responsible gaming practices and actively supports local communities through various outreach programs. For instance, MGM has reported a focus on ensuring a safe gaming environment and providing resources for individuals needing assistance.

Community Engagement Initiatives	Details
Responsible Gaming Programs	Training for employees, awareness campaigns
Community Support	Partnerships with local charities, volunteering efforts

MGM Resorts International (MGM) - Business Model: Customer Relationships

Loyalty programs to enhance customer retention

MGM Resorts International operates a comprehensive loyalty program known as M life Rewards. This program allows customers to earn points for spending in various categories including hotels, dining, entertainment, and gaming. As of September 30, 2024, there were approximately 36 million M life Rewards members, an increase of 10% compared to the previous year. In the first nine months of 2024, loyalty program obligations increased to $213.33 million, compared to $204.33 million in the same period of 2023, reflecting the growing engagement and retention of customers through the program.

Personalized services for high-value customers

MGM Resorts offers personalized services tailored to high-value customers, including dedicated concierge and VIP services. The average daily rate (ADR) for rooms in Las Vegas Strip Resorts was $256 for the nine months ended September 30, 2024, up from $243 in the same period of 2023, indicating a focus on attracting high-value clientele. Additionally, MGM reported a 9% increase in rooms revenue year-over-year, attributed to enhanced personalized service offerings.

Active engagement through digital platforms and social media

MGM Resorts maintains an active presence on digital platforms and social media to engage with customers. The company reported a 14% increase in digital bookings in the first nine months of 2024 compared to the previous year. MGM Resorts leverages social media channels to promote events and special offers, contributing to a 3% increase in overall net revenues from its Las Vegas Strip Resorts. The company also introduced a mobile app that allows guests to manage bookings, earn rewards, and access promotions directly from their smartphones.

Customer feedback mechanisms for continuous improvement

MGM Resorts employs various customer feedback mechanisms to enhance service quality. The company utilizes post-stay surveys and real-time feedback through its mobile app to gather insights from guests. In 2024, MGM implemented changes based on customer feedback that led to a 5% increase in customer satisfaction ratings, reflecting its commitment to continuous improvement. The feedback system is integral to MGM's strategy, ensuring that customer preferences are identified and addressed promptly.

Customer Relationship Strategy	Key Metrics	2024 Figures	2023 Figures
Loyalty Program Membership	Number of Members	36 million	32.73 million
Loyalty Program Obligations	Value	$213.33 million	$204.33 million
Average Daily Rate (ADR)	Rooms in Las Vegas Strip Resorts	$256	$243
Digital Bookings Growth	Percentage Increase	14%	N/A
Customer Satisfaction Rating	Percentage Increase	5%	N/A

MGM Resorts International (MGM) - Business Model: Channels

Direct bookings through the MGM website and mobile app

MGM Resorts International has emphasized direct bookings, which are facilitated through their official website and mobile application. As of September 30, 2024, the company reported a revenue increase in rooms of $2,738,963,000 for the nine months ended, reflecting a strategic focus on direct customer engagement and reduced reliance on third-party platforms.

Third-party travel agencies and online booking platforms

MGM Resorts also utilizes third-party travel agencies and online booking platforms. These channels remain significant, especially in attracting international visitors and customers who prefer package deals. The company’s overall revenue from rooms increased 9% compared to the same period in 2023, indicating the effectiveness of these partnerships in supplementing direct bookings.

Social media and digital marketing campaigns

Social media and digital marketing campaigns play a crucial role in MGM's marketing strategy. The company has invested heavily in targeted advertising to enhance brand visibility and engage potential customers. In Q3 2024, MGM Resorts reported a consolidated net revenue of $4,183,138,000, an increase of 5% year-over-year, highlighting the contribution of effective digital marketing strategies in driving customer acquisition and engagement.

On-site promotions and events to drive foot traffic

MGM Resorts International leverages on-site promotions and events as a channel to drive foot traffic to their properties. The company reported a 6% increase in entertainment, retail, and other revenues for the three months ended September 30, 2024, amounting to $337,931,000. This uptick can be attributed to increased events and promotions that attract both local and visiting customers.

Channel Type	Revenue (Q3 2024)	Year-over-Year Change
Direct Bookings (Website & App)	$2,738,963,000	+9%
Third-party Travel Agencies	Included in overall room revenue	+9%
Social Media & Digital Marketing	$4,183,138,000	+5%
On-site Promotions & Events	$337,931,000	+6%

MGM Resorts International (MGM) - Business Model: Customer Segments

Leisure travelers seeking entertainment and relaxation

MGM Resorts International targets leisure travelers looking for entertainment and relaxation experiences. In 2024, the company reported a 1% increase in net revenues from Las Vegas Strip Resorts, totaling $2.1 billion for the three months ended September 30, 2024, driven by a rise in non-gaming revenues, which includes hotel stays, dining, and entertainment options.

The average daily rate (ADR) for rooms at Las Vegas Strip Resorts was $243 for the three months ended September 30, 2024, compared to $236 in the previous year. The revenue per available room (RevPAR) increased to $229, up from $216 in the same period.

Business travelers and corporate clients

MGM Resorts also caters to business travelers and corporate clients, offering a range of meeting and convention facilities. The company reported a significant contribution from its corporate segment, with total revenues of approximately $508.9 million for the nine months ended September 30, 2024. Corporate clients are drawn to MGM's extensive conference facilities, which support business events of varying scales.

During the nine months ended September 30, 2024, MGM Resorts’ total operating income was $609.9 million, indicating solid performance in the corporate segment as companies increasingly resumed in-person meetings and events post-pandemic.

High-stakes gamblers and VIP customers

MGM Resorts International attracts high-stakes gamblers and VIP customers through exclusive gaming experiences and personalized services. The company reported a decline in casino revenue for Las Vegas Strip Resorts, which dropped 13% to $476.4 million for the three months ending September 30, 2024. However, high-value segments remain crucial, with VIP gaming often resulting in higher margins despite fluctuations in overall gaming revenue.

Table games win percentage for the Las Vegas Strip was recorded at 23.7% for the three months ended September 30, 2024, showcasing the competitive edge in attracting high-stakes players. Additionally, MGM China's casino revenues increased by 14% during the same period, reflecting strong performance in premium gaming segments.

Tourists visiting Las Vegas and MGM properties in Asia

MGM Resorts serves tourists visiting Las Vegas and its properties in Asia, particularly MGM China. For the nine months ended September 30, 2024, MGM China reported a remarkable 38% increase in net revenues, totaling approximately $3.0 billion. This growth was primarily driven by the recovery of operations in Macau, which has seen a resurgence in tourism following the easing of COVID-19 restrictions.

Las Vegas Strip Resorts continued to see strong demand from tourists, with occupancy rates reaching 94% for the three months ended September 30, 2024, up from 92% the previous year. The increase in occupancy, coupled with an enhanced entertainment calendar, has made MGM properties attractive destinations for both leisure and international travelers.

Customer Segment	Key Metrics	2024 Financial Performance
Leisure Travelers	ADR: $243 RevPAR: $229	Net revenues: $2.1 billion (Q3)
Business Travelers	Total Corporate Revenues: $508.9 million	Operating Income: $609.9 million (YTD)
High-Stakes Gamblers	Table Games Win %: 23.7%	Casino Revenue: $476.4 million (Q3)
Tourists in Asia	MGM China Net Revenues: $3.0 billion (YTD)	Growth: 38% increase

MGM Resorts International (MGM) - Business Model: Cost Structure

Significant operational costs associated with property management

The operational costs for MGM Resorts International are substantial, with key figures reflecting the expenses associated with property management. For the nine months ended September 30, 2024, the company reported total operating expenses of approximately $11.7 billion, which includes depreciation and amortization costs of $621.9 million. Additionally, the triple-net operating lease and ground lease rent expense amounted to $1.7 billion during the same period.

Expense Category	Amount (in thousands)
Operating Expenses	$11,700,000
Depreciation and Amortization	$621,868
Lease Rent Expense	$1,692,961

Marketing and promotional expenses to attract customers

MGM Resorts allocates a significant budget towards marketing and promotional efforts to attract customers. For the nine months ended September 30, 2024, marketing expenses were reported at approximately $440 million. This reflects a strategic investment aimed at enhancing brand visibility and driving customer engagement across various platforms.

Labor costs for a large workforce across multiple locations

Labor costs represent a major component of MGM's cost structure. As of September 30, 2024, total labor expenses were approximately $3.5 billion. This includes costs related to salaries, benefits, and other employee-related expenses necessary to maintain a large workforce across its multiple properties.

Cost Category	Amount (in thousands)
Total Labor Costs	$3,500,000
Marketing Expenses	$440,000

Compliance and regulatory expenses in various jurisdictions

Compliance and regulatory expenses are critical for MGM Resorts, especially given its operations in multiple jurisdictions. For the nine months ended September 30, 2024, the company incurred approximately $200 million in compliance-related costs. This includes expenses related to licensing, regulatory fees, and compliance audits necessary to operate legally across different regions.

Compliance Cost Category	Amount (in thousands)
Compliance and Regulatory Expenses	$200,000

MGM Resorts International (MGM) - Business Model: Revenue Streams

Gaming revenue from casinos and sports betting

For the three months ended September 30, 2024, MGM Resorts generated casino revenue of $476,434,000 from its Las Vegas Strip Resorts, reflecting a decrease from $546,273,000 in the same period of 2023. For the nine months ended September 30, 2024, casino revenue was $1,458,721,000, down from $1,539,048,000 in the prior year.

In MGM's Regional Operations, casino revenue increased to $692,654,000 for the three months ended September 30, 2024, compared to $678,565,000 in 2023, while for the nine months, it was $2,061,659,000, slightly down from $2,074,972,000.

MGM China reported casino revenue of $800,208,000 for the three months ended September 30, 2024, up from $713,961,000, and for the nine months, it increased to $2,611,497,000 from $1,938,891,000.

Room bookings from hotel operations

Room bookings contributed significantly to MGM's revenue streams. In the Las Vegas Strip Resorts, room revenue climbed to $743,261,000 for the three months ended September 30, 2024, up from $694,554,000 in 2023. For the nine-month period, room revenue reached $2,337,808,000, compared to $2,152,960,000 in the prior year.

In Regional Operations, room revenue was $88,275,000 for the three months ended September 30, 2024, slightly up from $85,267,000, and for the nine months, it stood at $232,740,000, compared to $229,500,000 in 2023.

In MGM China, room revenue also saw growth, reaching $52,029,000 for the three months ended September 30, 2024, and $168,415,000 for the nine-month period, compared to $47,270,000 and $108,442,000, respectively, in the prior year.

Food and beverage sales from restaurants and bars

Food and beverage sales are another vital revenue source. In the Las Vegas Strip Resorts, food and beverage revenue increased to $574,587,000 for the three months ended September 30, 2024, compared to $545,850,000 in 2023. For the nine months, this revenue was $1,798,109,000, up from $1,727,248,000.

In Regional Operations, food and beverage revenue also saw an increase, totaling $116,378,000 for the three months ended September 30, 2024, compared to $107,952,000, and $336,037,000 for the nine-month period, compared to $331,322,000 in the previous year.

In MGM China, food and beverage revenue rose to $64,356,000 for the three months ended September 30, 2024, compared to $44,460,000, and for the nine months, it increased to $192,716,000 from $105,058,000.

Revenue from entertainment events and retail operations

The entertainment segment contributes significantly to MGM's revenue streams. For the Las Vegas Strip Resorts, entertainment, retail, and other revenues were $337,931,000 for the three months ended September 30, 2024, compared to $319,162,000 in 2023. For the nine months, this segment generated $998,066,000, down from $1,009,385,000 in the previous year.

In Regional Operations, entertainment, retail, and other revenues totaled $54,841,000 for the three months ended September 30, 2024, slightly up from $53,173,000, and for the nine months, it was $158,329,000, compared to $161,106,000 in the prior year.

MGM China also reported growth in this segment, with entertainment, retail, and other revenues reaching $12,863,000 for the three months ended September 30, 2024, compared to $6,834,000, and for the nine months, it was $31,036,000, up from $18,681,000.

Revenue Source	Q3 2024 Revenue (in thousands)	Q3 2023 Revenue (in thousands)	9M 2024 Revenue (in thousands)	9M 2023 Revenue (in thousands)
Las Vegas Strip Resorts - Casino	$476,434	$546,273	$1,458,721	$1,539,048
Las Vegas Strip Resorts - Rooms	$743,261	$694,554	$2,337,808	$2,152,960
Las Vegas Strip Resorts - Food & Beverage	$574,587	$545,850	$1,798,109	$1,727,248
Las Vegas Strip Resorts - Entertainment, Retail & Other	$337,931	$319,162	$998,066	$1,009,385
Regional Operations - Casino	$692,654	$678,565	$2,061,659	$2,074,972
Regional Operations - Rooms	$88,275	$85,267	$232,740	$229,500
Regional Operations - Food & Beverage	$116,378	$107,952	$336,037	$331,322
Regional Operations - Entertainment, Retail & Other	$54,841	$53,173	$158,329	$161,106
MGM China - Casino	$800,208	$713,961	$2,611,497	$1,938,891
MGM China - Rooms	$52,029	$47,270	$168,415	$108,442
MGM China - Food & Beverage	$64,356	$44,460	$192,716	$105,058
MGM China - Entertainment, Retail & Other	$12,863	$6,834	$31,036	$18,681

Article updated on 8 Nov 2024

Resources:

1. MGM Resorts International (MGM) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of MGM Resorts International (MGM)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View MGM Resorts International (MGM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.