My first visit to Las Vegas was in the late 1980’s for a business convention. That Vegas is not the Las Vegas of today!
The transformation began in the 1990’s when industry leaders set a new vision and direction that went far beyond gambling, cheap meals and dancing girls. The vision was bold. The first visual experience was blowing-up old resorts and building spectacular architectural mega-resorts. I opened a Las Vegas marketing office in 1994 with a condo at the old Las Vegas Country Club and over the last 20 years, I have personally witnessed the transformation of Las Vegas.
With the new mega-sparkling resort structures, what was planned for inside was just as amazing. The world’s top chefs with first-class restaurants that satisfy any worldly epicurean aficionado were recruited. Today, Las Vegas has more TOP RANKED chefs and restaurants compared to any other city in the world. Mission accomplished. High-end fashion centers were opened at each major resort with the world’s leading brands, incomparable to any other city in the world. World-renowned spas, art exhibits, theatrical & musical venues, as well as outdoor parks, were all brought together in one space. The visionaries of yesterday have made their dream a reality today. Mission accomplished.
So who are the new visionaries and leaders of the Las Vegas dream? I met with the man leading the way, Chairman and CEO of MGM Resorts International, Jim Murren. The following Q&A with Jim tells you the story of how one company evolved as the leader in providing the ultimate Las Vegas experience.
JIM MURREN: CHAIRMAN & CEO, MGM RESORTS
Jim Murren: Among the wonders of Las Vegas is its ability to continually adapt itself to the new and ever changing tastes of consumers. This is how it stays current and vibrant, and why more than 42 million visitors come to Las Vegas for business or personal leisure travel each year. Over the last decade, the average age of a Las Vegas visitor has dropped almost a decade to just under 48 years.
Las Vegas transitioned from a city where gamblers came to vacation, to where all people come to vacation, and maybe gamble. Visitors are seeking engaging activities that create experiences and memories. This is why MGM Resorts, with our 10 major resorts along the Las Vegas Strip, has 15 of the top 100 Michelin-rated restaurants in Las Vegas; as well as more than 3M square feet of conference and convention space, 62 acres in open festival lots for outdoor concerts & festivals, and why we sell more than 7 million tickets a year for entertainment and sporting events.
DREAMS: California residents are a major market for Las Vegas and MGM; do you see this market increasing and what demographics are you targeting?
Murren: On average, each month 40,000-50,000 vehicles arrive with their guests at Las Vegas from Southern California. We expect and work with our colleagues across the industry to have this trend continue.
Las Vegas offers the types of activities and events that resound so strongly with today’s traveler and visitor. With over 120,000 hotel rooms across the city, 40,000 of them at MGM Resorts, Las Vegas is a leading destination. From day clubs, to night clubs, to fine and casual dining to some of the world’s finest hotels and accommodations, and art, Las Vegas has it all, and all within a quick drive from Southern California.
DREAMS: Competition in the gaming industry has evolved with the establishment and expansion of tribal gaming in Southern California. Each of these tribal gaming resorts are expanding their restaurants, entertainment, and customer experience. How does MGM respond to these challenges?
Murren: A decade ago, 60% of MGM Resorts’ revenue came from gaming. Today, on an aggregate basis, 30% of our revenue is from gaming. Our visitors are seeking experiences that create memories. Core to this is the guest experience provided by our 50,000 employees in Las Vegas, all in an integrated resort setting.
Also core is that Las Vegas is the entertainment capital of the world. We host all of the leading sporting and entertainment events the world has to offer. Venues like the new T-Mobile Arena, along with the MGM Grand Arena, and the Mandalay Bay Events Center will keep Las Vegas on that forefront, and a reason that more visitors, from the United States and internationally, will come to enjoy the “Las Vegas experience.”
DREAMS: MGM has expanded its portfolio of resorts in Las Vegas at every level, how would you describe your grouping of resorts? Do you plan on further expansions?
Murren: First, let’s paint the picture of the resorts within MGM’s Las Vegas portfolio to include Bellagio; ARIA, Vdara, and The Shops at Crystals; MGM Grand with SKYLOFTS at MGM Grand and The Signature at MGM Grand; Mandalay Bay with Delano Las Vegas; The Mirage; Monte Carlo; New York-New York; Luxor; Excalibur; and Circus Circus Las Vegas.
The portfolio provides the range of accommodations for every guest category, age, interest and budget. To keep the resorts current, annually we re-invest hundreds of millions of dollars for capital improvements. On expansion, our plans are both domestic and international.
Domestically, our current portfolio includes Gold Strike Tunica and Beau Rivage in Mississippi and MGM Grand Detroit. Under construction are MGM National Harbor, Maryland on the shores of the Potomac River at National Harbor and about 10 miles south of the National Mall that will open later this year. To the north, in New England, MGM Springfield in Massachusetts is due to open in 2018.
Internationally, we will expand our presence in Macau, where we have operated MGM Macau since 2007, with the opening next year of MGM Grand Cotai. On the mainland, we are developing luxury, non-gaming resorts with Diaoyutai State House China that currently includes MGM Grand Sanya.
DREAMS: Southern Californians flock to Las Vegas for entertainment escapes and not necessarily gaming experiences. What are some of the unique features and experiences that MGM is offering this clientele?
Murren: A prime example of providing our guests with new and exciting venues is The Park at NY-NY- an urban setting park stretching five acres along the Las Vegas Strip that will provide an environment of a central gathering space for people to relax, dine and be entertained.
There is also the 20,000 seat T-Mobile Arena, fronted by Toshiba Plaza, and the under-construction 5,000-seat theater at Monte Carlo that will allow us to host residency performances. We call these exciting new venues, “The Neighborhood”.
We co-developed T-Mobile Arena with AEG to deliver the best-in-class arena experience. It will expand the ability of Las Vegas to host multitudes of large-scale events, including collegiate and potential pro sports teams. While many cities have arenas, Las Vegas provides the unique environment to offer numerous “add on” experiences to enhance and complement the arena experience and to extend the event beyond just an evening or day, with the multitude of other shows and experiences.
LOS ANGELES ASIAN MARKET
DREAMS: With the significant increase of the Asian population in the San Gabriel Valley, how does MGM differentiate itself from the other Vegas resorts?
Murren: It’s very important to MGM Resorts that when we look at our Far East customers, we are not looking at just customers that are coming from Asia, but Asian customers from the US.
MGM Resorts has had a strong presence in the San Gabriel Valley since the early 1990s when we established a marketing office with the purpose of engaging with the community and providing booking and customer service options or to learn about or book reservations at our MGM Resorts properties.
The office serves local Asian customers, as well as establishing relationships with our Far East customers and guests. The staff makes countless trips a year to meet and spend time with our valued guests. We also hold many types of events in the Southern California area, such as small dinner parties or large banquet galas with a plethora of Asian entertainment.
Our objective is to give the best types of experiences to all types of guests. Our approach to entertainment, service, and events is not focused on either an Asian or an American mentality, but rather a blend. We truly believe in an “East meets West” philosophy which we believe gives our customers a truly satisfactory experience.
For example, in 2015, we were honored to host a Kabuki Spectacle on the Bellagio lake with the backdrop of the Bellagio Fountains. We replicated that in early May at MGM Grand Las Vegas. This spring, we also turned the Bellagio Conservatory into a Japanese Spring Celebration that is breathtaking.
DREAMS: As you know, the 2 million+ population in the San Gabriel Valley is now majority Asian population. These new affluent residents come from Taiwan, Hong Kong, mainland China, and Korea. Many drive to Las Vegas. Do you believe the XpressWest high-speed rail will have a major impact on business in Las Vegas?
Murren: We have expressed our thoughts in support of increased transportation infrastructure. We believe any additional offering to give travel access from Southern California to Las Vegas benefits customers from Southern California. With the growing Asian population, we expect greater numbers of visitors to whom we will continue to provide amazing guest service, experiences and memories.
DREAMS: During your interview with CNBC in February, you mentioned revenue was down on The Strip due to a decline in Asian gamblers. Were you addressing Asian tourist gamblers from foreign countries, or the exploding LA Asian market?
Murren: Although we do typically see some of the largest customers come out of Asia, it’s quite different when you compare it to the local Asian communities that support and frequent our resorts in Las Vegas. Travel time can sometimes be daunting to some individuals living overseas compared to the numerous ways for people living in Southern California to get to Las Vegas. This is why our approach to Asian marketing encompasses the people rather than the country. We continue to see growth from the Southern California market and we look forward to continuing to cater to our existing customers as well as introducing a whole new group to the many amenities and experiences that MGM Resorts has to offer.
DREAMS: The development of CityCenter in the latter half of the 2000s and the myriad of hotels, architecture, art, and amenities, was a major strategic move for your company. It appears that CityCenter is no longer the brand, but rather the individual resorts within CityCenter. What was the rationale for this change in brand marketing?
Murren: What we came to appreciate soon after opening CityCenter in late 2009, was that the major components of this 67-acre mixed-use development between Bellagio and Monte Carlo resorts – ARIA, a 61-story, 4,004-room gaming resort; luxury non-gaming hotels including Las Vegas’ first Mandarin Oriental and Vdara Hotel & Spa; Veer Towers, the development’s only strictly residential buildings; and The Shops at Crystals, a 500,000 square foot shopping and dining experience – each had their own unique identity.
We are honored, and proud, that collectively the ARIA, Vdara resort campus is one of the largest sustainable developments in the world, with six Gold LEED certifications from the U.S. Green Building Council. Almost daily, we have visitors from around the world visiting to learn about some of the latest strategies in sustainability, and Corporate Social Responsibility, which is a core competency of our company.
Demand for convention and meeting space at ARIA is so strong, we are adding another 200,000 square feet of technologically advanced, flexible meeting space across four stories, highlighted by stunning indoor/open-air spaces and a glass-enclosed venue with dramatic views of The Park and the new T-Mobile Arena. When it is done, ARIA will feature more than 500,000 square feet of superior meeting space for luxury clientele. On top of that, the enclave has approximately 10,000 employees. It is a small city unto its own, and a prime example of Las Vegas continually evolving.
DREAMS: It cannot be denied that CityCenter is an artistic masterpiece; what influence did your Art History and Urban Studies degree have on the design process?
Murren: Art is one of the cornerstones of the sensory experience at our resorts. It helps to define the setting by creating environments that are interesting, exciting and distinct.
A core value for MGM Resorts is diversity and inclusion. Art in many ways is a universal language that brings people and ideas together. At a recent forum in fact, a public official in Las Vegas noted MGM’s commitment to public art, and thanked us for our leadership. I was appreciative of and humbled by his comments. One of the newest art experiences for guests will be along the I-15 from California. Starting in May in the Jean Dry Lake bed, will be the colorful and engaging “Seven Magic Mountains” – vibrantly colorful stacked boulders. Designed by Ugo Rondinone, a Swiss artist, they will provide a welcome gateway to Las Vegas.
So while I was an Art History major, our commitment to public art contributes to our business success in so many ways.
DREAMS: High-end, upscale clientele not only from Southern California, but also nationally and globally come to Las Vegas for the shopping experience of the world’s most renowned luxury brands. The Shops at Crystals is the epitome of a world-class shopping destination; what has been the result of this luxury brand destination mall?
Murren: The Shops at Crystals is one of the most successful retail centers in Las Vegas and North America. It combines fine retail, with fine and casual dining in an embracing environment. Retail is another example of the consumer trend for a full experience.
DREAMS: As a publicly traded company, MGM Resorts saw its stock value decline from all-time highs before the 2008 recession to what now appears to be a sound recovery; where do you see your revenue growth in the next five years?
Murren: We have taken a strategic review of the company with a focus on diversifying revenue streams in response to consumer demands to drive continual innovation and operational improvements to both the top and bottom line.
We’re especially excited about the creation of MGM Growth Properties, which is a uniquely constructed triple net lease Real Estate Investment Trust (REIT) that we announced at the end of 2015. It will allow increased investment opportunities in MGM, and in which MGM Resorts will be a majority shareholder.
Additional growth will come in the opening of MGM National Harbor, MGM Cotai and MGM Springfield.
DREAMS: You spent 14 years on Wall Street. In what ways has that experience aided in the revival of MGM’s stock value and set it up for growth in the coming years?
Murren: My experience on Wall Street, and now in an executive position, has taught me to take the long view, and the importance of relationships and how they matter. Becoming Chairman & CEO at the precipice of the Great Recession taught me some other lessons as well, including that reputation and integrity are supreme; to never give up and never give in; and to always be a leader.
However, some of my best lessons came from Kirk Kerkorian, the founder of MGM Resorts International, who passed away last June.
Mr. Kerkorian was a great friend, a great mentor, and a great coach. He combined brilliant business insight with steadfast integrity to become one of the most reputable and influential entertainment and hospitality leaders of our time.
During the darkest of dark days of the Great Recession, we would talk almost daily. Sometimes we would talk business, but not always. He would always ask me how I was doing, was I taking care of myself, was I exercising, how was my family, how were the employees? He always cared about others.
Until the end, he was one of the most contemporary thinkers I knew. He taught me the importance of looking forward about 85% of the time, and to not look back, not to second guess, but to understand how things could be done better.
On further reflection since his passing, this approach to life, and business, was natural for him because he started his life as an aviator. He was also a superb boxer. In both cases he had to have the discipline to look forward to the horizon and to the next milestone as a pilot, and to the next jab as a boxer.