MGM Resorts International CEO Bill Hornbuckle recently acknowledged that high prices contributed to a negative perception of Las Vegas during a challenging summer travel period. The company's third-quarter 2025 earnings report showed a 7% decline in net revenue compared to the previous year, highlighting the impact of these pricing issues on the city's tourism industry.
Key Takeaways
- MGM Resorts saw a 7% drop in Q3 2025 net revenue.
- CEO Bill Hornbuckle admitted high prices hurt Las Vegas's image.
- Budget-conscious properties like Excalibur and Luxor were most affected.
- MGM has implemented price corrections, including a 'Fabulous Five-Day Sale'.
- Group and convention business remains strong, signaling future growth.
Summer Slump Impacts Revenue
MGM Resorts reported net revenue of $2 billion for the third quarter of 2025, covering July, August, and September. This figure represents a 7% decrease compared to the same period in the previous year. The decline was attributed to several factors, including reduced room revenue, lower food and beverage sales, and a decrease in table game winnings. Additionally, a significant hotel room remodel at the MGM Grand contributed to the revenue dip.
Hornbuckle stated, "We lost control of the narrative over the summer." He emphasized that the company should have been more vigilant about pricing, especially at its more budget-friendly properties.
Q3 2025 Revenue Snapshot
- Net Revenue: $2 billion
- Change from Q3 2024: Down 7%
- Contributing Factors: Lower room revenue, reduced food/beverage sales, decreased table game wins, MGM Grand remodel.
Pricing Strategy Under Scrutiny
The CEO specifically pointed to instances of exorbitant pricing at properties designed for more budget-conscious travelers. While luxury resorts such as the Bellagio and ARIA maintained strong performance, properties like Excalibur and Luxor faced significant struggles during the quarter. This disparity highlighted a disconnect between perceived value and actual cost for certain segments of visitors.
"When we think about pricing and things that got everyone's attention, whether it was the infamous bottle of water or a Starbucks coffee at Excalibur that cost $12, shame on us," Hornbuckle told analysts. "We should have been more sensitive to the overall experience at a place like Excalibur, to those customers. You can't have a $29 room and a $12 coffee."
This candid admission underscores the importance of aligning pricing with guest expectations, particularly across different tiers of resorts. The company now aims to ensure that value is consistent across all its offerings.
Corrective Measures and Promotions
In response to these challenges, MGM Resorts has implemented price corrections. Hornbuckle highlighted the success of the "Fabulous Five-Day Sale," a promotional event organized by the Las Vegas Convention and Visitors Authority (LVCVA). This sale generated bookings for over 300,000 rooms, which is double the typical booking pace. This initiative demonstrated a commitment to restoring value for visitors.
Understanding the LVCVA
The Las Vegas Convention and Visitors Authority (LVCVA) is the official destination marketing organization for Las Vegas and Southern Nevada. It is responsible for attracting visitors to the area, overseeing the Las Vegas Convention Center, and promoting the city as a premier travel destination for leisure and business.
Hornbuckle affirmed that the community-wide sale, with MGM's meaningful participation, showed that Las Vegas understands value. He emphasized that the city will always maintain its reputation for offering diverse experiences at various price points.
Broader Industry Headwinds
Beyond internal pricing issues, Hornbuckle also noted several external factors affecting Las Vegas tourism. These include Spirit Airlines canceling routes due to bankruptcy proceedings, which reduced air travel capacity to the city. Additionally, there has been a noticeable drop in visitation from Canadian tourists, further impacting overall numbers.
Despite these challenges, the outlook for Las Vegas remains positive, particularly concerning group and convention business. Like Caesars Entertainment CEO Tom Reeg, Hornbuckle expressed a "very bullish" stance on the city's future. The return of conferences and large events is expected to provide a significant boost.
Future Outlook and Growth
MGM Resorts anticipates stabilization in the fourth quarter of the current year. The company projects renewed growth in 2026 and beyond. This optimism is largely driven by the strong return of the convention market, which consistently brings high-spending visitors to the city.
The commitment to correcting pricing strategies, coupled with the inherent appeal of Las Vegas as a global entertainment and business hub, positions the city for a rebound. Focusing on a balanced approach to pricing and value across all resort segments will be crucial for sustained success.
