T-Mobile Arena nearing competion
While gambling is still king on the Las Vegas Strip, revenues derived from large-scale events gradually are growing in size and importance, as the percentage of revenues derived from gaming continue a steady decline.
Recognizing a shift away from gaming-dominated revenues and toward events-driven revenues, MGM Resorts International is poised to open its $365 million T-Mobile Arena alongside the complementary ‘The Park’, which offers shopping, dining and entertainment, during the first week in April. MGM is putting the finishing touches on the arena and has formal opening ceremonies scheduled for each during the first week of April.
A formal opening of MGM’s The Park is scheduled on Monday, April 4 with morning media tours and interviews scheduled, followed by the first lighting of the 40-foot-tall Bliss Dance sculpture that evening. Among invited guests for the formal opening of The Park are MGM Resorts International CEO Jim Murren, Nevada Governor Brian Sandoval, and others.
Two days later, on April 6, MGM unveils the privately funded T-Mobile Arena which is a collaboration between MGM and AEG Worldwide.T-mobile is paying approximately $6 million per year for the naming rights.
MGM has a media tour and press conference slated in the morning and afternoon followed by opening night activites, leading up to the T-Mobile Arena Opening Celebration Concert headlined by recording artist Nicki Minaj and special guest Ariana Grande.
The most convenient parking for The Park and T-Mobile Arena is at the parking structures for the Monte Carlo and New York-New York casinos, which are owned by MGM and among its many properties that start charging fees April 1.
Thirty years ago, such a project would be unlikely, as gambling remained the king of the Strip. Revenues derived from events, entertainment, and rent from retail operations largely were afterthoughts.
In 1984, properties on the Las Vegas Strip generated $1.27 billion, or 58.63 percent of its total revenue, from gaming according to the UNLV Center for Gaming Research. Rooms – 16.1 percent, food – 11.41 percent, beverage – 7.71 percent, and other revenue sources – 6.14 percent, rounded out remaining revenue sources. Total revenues on the Las Vegas Strip topped $2.16 billion in 1984.
Fast forward more than three decades and gaming, despite a total revenue of $5.84 billion, has declined to just 34.9 percent of total revenues in 2015. Room revenues grew to 26.7 percent and $4.47 billion followed by food – 15.86 percent and $2.66 billion, beverage – 7.43 percent and $1.24 billion, and other revenues sources at 15.13 percent and 2.53 billion. Total revenues on the Strip topped $16.74 billion last year.
Before the Great Recession, new construction projects along the Las Vegas Strip generally consisted of new casinos and more hotel rooms to accommodate more gamblers.
But since the Great Recession, projects largely have consisted of events-based expansions, rather than increased gaming space. Aside from the 2010 opening of the CityCenter project, which began before the Great Recession, new projects largely have gone in other directions than gaming.
Nearby Toshiba Plaza
Caesars Entertainment used its prime Las Vegas Strip real estate to create the Linq which is anchored by the High Roller observation wheel and is modeled after Main Street, USA.
MGM Resorts just expanded its convention center at Mandalay Bay and Las Vegas Sands recently undertook an expansion and upgrade of the Sands Expo and Convention Center. Even the Las Vegas Convention Center is undergoing a $2.3 billion upgrade through 2020, which promises to help keep average daily occupancy above 90 percent at Las Vegas Strip hotels.
A record 42.9 million people visited Las Vegas in 2015, and more are expected to come this year. Many of them won’t arrive for gambling and won’t spend much, if any time, at slot machines or gaming tables.
Instead, they will spend money on food, beverage, entertainment, and lodging, plus take in some retail shopping. And that has Las Vegas Strip operators diversifying their business models and once again reshaping Sin City’s skyline, while looking to host the next big event.
