MGM Resorts International, through its wholly owned subsidiaries, owns and/or operates casino resorts in the United States and China. The company operates through two segments, Domestic Resorts and MGM China. Its casino resorts offer gaming, hotel, convention, dining, entertainment, retail, and other resort amenities. Its casino operations include various slots, table games, and race and sports book wagering. The company operates 14 wholly owned resorts in the United States; and MGM Macau resort and casino in China, as well as develops an integrated casino, hotel, and entertainment resort on the Cotai Strip, Macau. The company also owns and operates Shadow Creek golf course, Primm Valley Golf Club, and Fallen Oak golf course. The company serves premium gaming customers; leisure and wholesale travel customers; business travelers; and group customers, including conventions, trade associations, and small meetings. The company was formerly known as MGM MIRAGE and changed its name to MGM Resorts International in June 2010. MGM Resorts International was founded in 1986 and is based in Las Vegas, Nevada.
Business Analysis of MGM Resorts
The Travel & Leisure Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how MGM Resorts compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by MGM Resorts to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of MGM Resorts with an interactive chart.
- Revenue Growth: MGM Resorts reported a revenue growth of 3.1% year-on-year during 2016. Casino Industry grew at 2.9% in the same period
- COGS share of Revenues: As a percentage of revenue, MGM Resorts spent 53.6% of its total revenues on COGS. Casino industry average (COGS share of revenue) in the same period was 53.3%
- R&D share of Revenues: MGM Resorts R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, MGM Resorts spent 16.5% of its total revenues on Sales, Marketing, and General Administration (SG&A). Casino industry average SG&A spending in the same period was 17.8%
- Inventory share of Revenues: As a percentage of revenue, MGM Resorts spent 1.0% of its total revenues on Inventories. Casino industry average Inventory spending in the same period was 0.8%
- Accounts Payable share of Revenues: As a percentage of revenue, MGM Resorts invested 5.1% of its total revenues on Accounts Payable (A/P) Casino industry average Accounts Payable investment in the same period was 4.9%
- Accounts Receivable share of Revenues: As a percentage of revenue, MGM Resorts invested 5.3% of its total revenues on Accounts Receivable (A/R). Casino industry average Accounts Receivable investment in the same period was 4.8%
- PP&E share of Revenues: As a percentage of revenue, MGM Resorts invested 179.8% of its total revenues on Property, Plants, and Equipments (PP&E). Casino industry average PPE investment in the same period was 152.6%
- Intangibles share of Revenues: As a percentage of revenue, MGM Resorts invested 57.6% of its total revenues on Intangibles. Casino industry average Intangibles investment in the same period was 32.6%
- Net Margins: MGM Resorts Net Margins in the year 2016 were 10.7%. Casino industry average Net Margins in the same period were -0.7%
Sector and Industry Association of MGM Resorts
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.
MGM Resorts is associated with Travel & Leisure Sector and Casino Industry.
Travel & Leisure sector is comprised of the following industries: Airline; Car Rental Services; Casino; Hotels and Resorts; Recreational Services. The definitions for each of the industries is as follows:
- Airline industry includes companies primarily engaged in providing passenger air transport.
- Car Rental Services industry includes companies engaged in providing car rental services.
- Casino industry includes providers of gambling and casino facilities.
- Hotels and Resorts industry includes operators of hotels, motels, lodges, resorts, spas and campgrounds.
- Recreational Services industry includes providers of leisure facilities and services, such as amusement and theme parks, fitness centers, cruise lines, movie theaters, racetracks, and sports teams.
Industry Ranking of MGM Resorts
With $10.2 billion revenues, MGM Resorts ranked number 2 of all the companies in the US Casino industry. There were a total of 17 public companies in the US Casino industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Casino industry by revenues during 2016 were:
- Las Vegas Sands ($11.4 billion)
- MGM Resorts ($10.2 billion)
- Wynn Resorts ($4.5 billion)
- Caesars Entertainment ($3.9 billion)
- Penn National Gaming ($3 billion)
- Pinnacle Entertainment ($2.4 billion)
- Boyd Gaming ($2.2 billion)
- Red Rock Resorts ($1.5 billion)
- Isle of Capri Casinos ($978.6 million)
- Eldorado Resorts ($892.9 million)
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.