Convention Center Drives Revenue for Mandalay Group

The Mandalay Resort Group posted sharply higher revenue and profit last year, the first that its new convention center has been in operation.

The company, which also operates four casinos and an all-suites hotel on the Las Vegas Strip, reported $149.9 million net income on revenue of nearly $2.5 billion in its fiscal year ending Jan. 31, compared with net income of $115.6 million on revenue of about $2.4 billion in the fiscal year ending Jan. 31, 2003.

Glenn Schaeffer, the resort group's president and CFO, told analysts during a conference call, "Our convention center continued to perform above our initial expectations and was a prime factor in our year-over-year results." The 1 million square foot Mandalay Bay Convention Center opened in January 2003. Schaeffer said occupancy there during the fourth quarter of 2003 was about 33 percent. Occupancy this year is forecast to rise to 50 percent and to 80 percent in 2005. "We're on a run here," he said.

Schaeffer indicated that door-opening deals are a thing of the past. "Last year, as you know, we rebated for people who signed up with multiyear commitments with guaranteed room blocks," he told analysts, adding that the convention center this year should generate $12 million in revenue per quarter, compared with about $2 million per quarter last year.

THEhotel, the new 1,117-suite tower, recorded 80-percent occupancy and average room rates of $250 in January, its first full month of operation.