2 years after Las Vegas shooting, Mandalay Bay regaining footing
When John Harrison made plans to attend the SuperZoo pet retailer convention in Las Vegas in August, he initially booked a room at Luxor. It wasn’t until he saw a price drop at Mandalay Bay that he decided to cancel his reservation and switch to the other property.
Staying at Mandalay Bay made sense; the convention itself was hosted at the property’s convention center, and Harrison said he favors its amenities over Luxor’s.
But it was hard for him to forget about the tragedy that occurred nearly two years earlier. Harrison and his wife had explored the hotel to find the suite where a gunman stationed himself the night of the Oct. 1, 2017, mass shooting at the nearby Route 91 Harvest festival. The wing associated with the shooting remains closed.
This is part of an ongoing series observing the two-year anniversary of the Oct. 1, 2017, shooting at the Route 91 Harvest Festival. See all of our coverage here.
“Unfortunately, this is the world we live in. You just have to keep it in the back of your mind,” Harrison said. “You figure out where the exits are and the back doors, and that’s all you can do.”
Harrison fits into a pattern seen along the Strip. According to experts, visitors seem to be less concerned about the events of two years ago when booking a stay in Las Vegas. In turn, business at Mandalay Bay is close to making a full recovery.
Representatives from MGM Resorts International, the owner and operator of Mandalay Bay, declined to provide comment.
Finding its footing
The first nine months following the shooting, revenue per available room at Mandalay Bay was down about 5 percent, according to Macquarie analyst Chad Beynon. Management reduced the amount of marketing for the property in the immediate aftermath of the shooting, he said, and many leisure travelers were “hesitant” to book a stay there.
It was convention business that helped keep earnings up.
“With the recent 350,000-square-feet convention center expansion, Mandalay is one of the largest convention properties in the world,” Beynon said. “Out of all of MGM’s properties, Mandalay Bay relies the most on convention and nongaming. It did help the property.”
The fact that many of its trade shows are booked years in advance has helped Mandalay Bay keep a solid base of visitors. Beynon said he doesn’t believe there were “too many” convention cancellations at the property.
Some convention attendees, including Ali Stewart, say they don’t have a problem visiting Mandalay Bay. An employee at California pet boutique Dog and Hydrant, she said she’s gone to SuperZoo at the Mandalay Bay Convention Center each of the past two years.
“It’s something that’s not far from your mind, but you’re seeing attacks everywhere now. It’s not isolated to being in a hotel in Las Vegas,” Stewart said at the trade show. “There’s a certain uneasiness about it, but that comes with being anywhere in public.”
Hannah Guild, who works with Stewart at Dog and Hydrant, said she takes comfort in the fact that Mandalay Bay increased security measures after the shooting.
Businesses “take note of where they make mistakes, and hopefully have learned,” Guild said. “You can’t stop living.”
After the initial dip, Beynon said, Mandalay Bay experienced “lingering softness” before business started to pick back up.
“You saw a nice improvement about a year after the shooting,” he said. “Overall, it took about 15 months for the property to find its footing.”
Jefferies analyst David Katz expects that growth to continue. He said the company should perform “relatively well” over the next couple years.
“As tragic as the event was, I think there’s a reasonable level of normalcy that’s restored now,” he said. “MGM is putting their efforts to making that new normal as positive as possible. … You’d have to argue that its future is pretty bright.”
‘Roughly 90 percent back’
The revenue per available room in the third quarter of 2017 was $194. The next quarter — when the shooting took place— that figure dropped to $149. The latest reported numbers, for the second quarter of 2019, show it’s almost fully recovered at $192.
Beynon said Mandalay Bay’s performance failed to meet expectations this year. However, “we believe Mandalay is roughly 90 percent back to where it was from a branding, review, room rate and demand standpoint,” he said.
And with Allegiant Stadium expected to open in time for the 2020 football season, the analysts expect to see another boost in business at Mandalay Bay.
“This will drive additional visitation and demand to the South Strip and to Mandalay,” Beynon said. “MGM believes Mandalay will be a core property for visitors going to that stadium.”