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MGM Mirage CEO Optimistic About Company, Las Vegas (MGM)

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MGM Mirage CEO Optimistic About Company, Las Vegas MGM

MGM Mirage (NYSE: MGM) CEO Jim Murren was on CNBC's Squawk on the Street to discuss the repackaging of its debt this morning. The company borrowed an immense amount of money during the days of easy credit, and now has to repackage $14 billion in debt to finance upgrades and expansions in Asia.

Citing downturns in tourism and the convention business, the Las Vegas economy has seen a progressive decline since 2008.

Discussing CityCenter, MGM Mirage's $8.5 billion complex in Vegas, Murren talked about occupancy growing from 60% in December to 80% today and increasing demand for convention space. Despite the slower than expected opening, MGM is now seeing tens of thousands of visitors coming through its doors daily to visit its various business components.

While bookings may be up, prices have fallen 30% lower than they were just 2 years ago. But, Murren said, prices have leveled off, and called Las Vegas "an incredibly affordable place to go." RevPAR is down year over year, but has shrunken to single digit losses. Murren believes prices will rebound, and prices per room will be higher in the second half of this year than they were in the second half of 2009.

He also discussed selling units in their high-end condominiums at the Mandarin Oriental. At this point, MGM has closed deals on 15 of its 200 units, with the rest projected to be sold by the middle of 2011. This, of course, with significant rate decreases.

MGM is up $0.22 today to $10.90 a share, well above their close of $2.62 per share a year ago today.

Posted-In: CNBC Jim MurrenNews Travel Economics

 

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