Mandalay Has Lighter Convention Load
Staff -- Tradeshow Week, 9/20/2004
Fewer tradeshows were held at the Mandalay Bay Convention Center early this summer, a factor that caused a decline in the occupancy level at the adjoining hotel.
Despite the occupancy level at the Mandalay Bay Resort & Casino dropping to about 85 percent, from 94 percent in the year-ago quarter, Mandalay Resort Group still managed to boost overall revenue to $713.8 million, from $644.8 million in the second quarter of 2003. And the resort group's overall profit rose to $58.2 million, from $42.3 million in the year-ago quarter.
President and CFO Glenn Schaeffer blamed the absence of a 2003 tradeshow that attracted 11,000 delegates for the lower occupancy rates and a nearly $4-million revenue shortfall. "It's hard to make up for in a transition month like June," said Schaeffer, who assured analysts during the group's conference call that "the convention calendar will be ahead for the remainder of the year."
The 1 million square foot Mandalay Bay Convention Center, which opened in January 2003, reported a 20-percent occupancy level during the resort group's second quarter, which ended July 31. The venue is expected to hit 30-percent occupancy this year and ultimately reach 50 percent. "We'll get there," Schaeffer told the analysts.
Schaeffer chalked up the lighter load to less convention business citywide. "This is the summer quarter," he said.
However, according to projections by the Las Vegas Convention & Visitors Authority, eight tradeshows held between July and September will together draw 309,000 attendees, nearly 15 percent more than last year.
Of those, only two — Cosmoprof North America and The WSA Show — will be held at Mandalay Bay. Five will be held at the Las Vegas Convention Center and the eighth at the Sands Expo & Convention Center.
When MGM Mirage made its $7.8-billion cash offer for Mandalay Resort Group in June, officials called the convention center "a major growth factor in Las Vegas." During the resort group's recent conference call, Schaeffer didn't comment on the timing for the merger, which must still undergo antitrust scrutiny. He did express optimism about the resort group's future performance, saying, "Our friends at MGM Mirage are poised to acquire a winner."
