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MGM new arena - thoughts

Discussion in 'General Vegas Talk' started by VEGASBJ, Mar 14, 2016.

  1. VEGASBJ

    VEGASBJ
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    So during last weekend's trip, I noticed the following and put down some thoughts regarding the new arena going up (and almost completed) behind NYNY. Please feel free to add / share / add detail to how this may impact the MGM property....................

    So, this past weekend was the Pac-12 conference championships, and the games were being held in the Grand Garden arena. I think 4 days of games, about 3 games per day. The MGM was packed! I mean really packed, like a big fight night weekend! The schools travel well, as there were plenty of fans all dressed in school colors everywhere throughout the weekend. So not only was the foot traffic down the Studio walk / District area packed at all times from people either exiting the arena from one game, and people heading into the arena for the next game, all the restaurants down this aisle were packed at all times! Every table, every restaurant, the bars within the restaurants were busy all weekend. No reservation - no chance of getting in!

    Which got me to thinking...............when the new arena opens up behind NYNY, MGM loses all of this foot traffic and business since next year this tournament is moving to the new arena. It is not only this tournament though, it is every event that will be held at the new arena now instead of at the Grand Garden arena. This is a TON of lost business for the MGM property as all these customers will now not be on site. All of the restaurant traffic, collateral gambling where these people stop to put in a $20 or $100 bill into a slot on the way by, etc. Yes, NYNY may pick up some of this business, but the NYNY layout is different where not all the main restaurants are down a row that you have to walk by to get to the arena like it is at the MGM. IMO, MGM loses a LOT of ancillary business when all the events are moved to the new arena. Mentioned this to some of the pit crew while I was playing, and they don't understand it either. basically taking business from a property with better restaurants that are located more conveniently to the current arena, foot traffic that has to empty out of the arena past gaming tables and slots, and moving the business to an arena that is designed with the idea of immediate / expedited exiting, and foot traffic ramps that empty out to parking garages, and not back into the casino. I know the new arena is fancy and exciting with luxury boxes, just wondering out loud how much extra business will be lost with the move. hard to judge or estimate, but IMO it will be more than they realize or can factor in.
     
  2. DannyOcean

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    It's a fair question. On balance, I love that the arena is going to be there. Some great shows will happen there, and I'm guessing the larger size will help offset some lost casino traffic.

    Perhaps, since many people already will be parked in the garage, they'll hike into the casinos nearby to wait for traffic to die down? I also guess that a lot of people who attend events there will be tourists who will be staying nearby regardless. And MGM probably doesn't care if people are playing at NYNY, Monte Carlo, MGM ... as long as its MLife.

    People will also be milling about along the Park, which is full of shops and restaurants ... they'll be angling to get more of that sunk spend.
     
  3. wigwam_timeshares

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    I don't know much about the arena but I imagine they did some maths and think 20,000 people paying for expensive concert tickets will outweigh the loss of casino revenue.

    That's a complete finger in the air guess though. Is that even the capacity of the arena?
     
  4. VEGASBJ

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    new arena is 20,000 seats, Grand Garden is 18,000 depending on type of event being held
     
  5. Way2fast

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    I think you are right about the impact to MGM. There will be fewer nights of wall to wall people from the garden, down the hallways and into the casino. Knowing how sport stadium proformas are put together, I'm sure their mouths were watering when they saw how much more $$ will be generated in a higher-end, modern facility with upscale food service/nightclubs and especially with all the suites and other "premium" spaces. It isn't just more people and ticket sales, but the overall higher average spend per person. Will that extra offset what will clearly be some lower revenues in MGM? That is the question.
     
  6. VEGASBJ

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    I guess they think it will, or else they are bad at math
     
  7. undathesea

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    Because you indicated the foot-traffic will be lost, I'm assuming you think the arena will be dark during conference tournament play. That seems a little shortsighted, IMHO.

    I'd be willing to bet they think the new arena will allow MGM to host more than a single basketball tournament or more than just a basketball conference tournament in Vegas. Increasing the number of events would increase the foot traffic even more. I haven't heard any plans to close the Grand Garden Arena and there are 32 Division I basketball conferences.

    NYC hosted two this weekend so I don't see why Vegas couldn't do the same.
     
  8. wigwam_timeshares

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    Oh. I thought garden was way lower. My guess is likely to be completely wrong then. Please disregard.
     
  9. DannyOcean

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    I think the PGP definitely pushes the truth in favor of the latter!
     
  10. VEGASBJ

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    No, I am sure that something will be going on in the Grand Garden some of the times, so they are simultaneously hosting events. My main point was the loss of the income derived from dumping the Grand Garden patrons down restaurant row and then into the casino, whereas the new arena is not positioned to necessarily do that. Yes, the patrons "could" walk back through the casino and out to the Strip, but it is not mandatory as it kinda is now, as the new arena is more built to fill and empty quickly to dissipate the crowding of the area traffic wise. The new area being built between NYNY and MC should pick up some of this business, but also at an increased build cost that may take years to recoup just the build investment.
     
    #10 Mar 14, 2016
    Last edited: Mar 14, 2016

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