MGM Resorts continues to face headwinds in Las Vegas while China profits outperform
MGM Resorts continues to face headwinds in Las Vegas while China profits outperform
'All-inclusive' deal brings in new Sin City visitors
The Luxor Hotel and Casino, pictured between the W Hotel and Mandalay Bay Resort and Casino on the Las Vegas Strip, was one of two of MGM's resorts to offer an all-inclusive package in the first quarter. (Photo by Kevin Carter/Getty Images) (Getty Images)
https://www.costar.com/article/2134943749/mgm-resorts-continues-to-face-headwinds-in-las-vegas-while-china-profits-outperform
For the first time in over a year, MGM Resorts International's Las Vegas Strip resorts delivered comparable period quarterly top-line growth despite a strong leisure comparative, said Bill Hornbuckle, president and CEO of MGM Resorts, on the company's first-quarter earnings call.
"MGM Resorts, once again, delivered consolidated net revenue growth in the first quarter, driven by strengths in digital and China," Hornbuckle said. "We achieve this with solid group and convention business in the first quarter, and we expect this to carry into the second quarter."
Despite the earnings call's optimism for Las Vegas, MGM reported an 8% decline of segment adjusted earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs. The first quarter of 2026 reported an EBITDAR of $749 million compared to $811 million in the same period last year.
Hornbuckle pointed to opportunities in professional sports — such as the 2029 Super Bowl — on the horizon that will drive demand in Las Vegas. He added that at MGM's Las Vegas properties, the company is committed to new technology as well as delivering value for its guests.
"As the city evolves, we're making sure we are leaders in innovation," Hornbuckle said. "The MGM gaming streaming lounge, which opened at Park MGM, and received all regulatory approvals during the quarter, is another exciting step."
Last month, MGM launched an all-inclusive package at its Luxor and Excalibur resorts. The value-focused deal offered a two nights' stay, meals, parking and more for guests.
Hornbuckle noted that a third of the guests booking the all-inclusive package are first-time visitors to Las Vegas, and the MGM team expects this new influx of visitors to benefit the business.
"We're also seeing a significant portion of those customers as net new customers, which we believe is a positive trend line," said Ayesha Molino, chief operating officer of MGM Resorts. "We're going to continue to evaluate [the offering], understand customer response, understand whether there are new strategies we could deploy alongside it, and whether it needs to be scaled or should be scaled to other properties."
Another boon to the quarter was MGM finalizing the sale of MGM Northfield Park for $546 million.
"With the transaction now closed and the proceeds received, we have increased flexibility to redeploy capital, including re-accelerating share repurchases at our current valuation levels," said Jonathan Halkyard, chief financial officer.
MGM's properties in China raked in $23 million more in fees this quarter compared to the first quarter of 2025. The increase reflects a new long term branding agreement between MGM and MGM China, which increased fees from 1.75% to 3.5%.
Kenneth Feng, CEO of MGM China, recognized that MGM Macau is underserved when it comes to suites, but that's something MGM is already planning to rectify.
"We are in the designing stage about 100 suites at the MGM Macau side," Feng said on the call. "Also some kind of gaming spaces, F&B outlets. We want to spend money wisely to really to reflect the purpose, to serve the purpose of the customers, why they are in Macau."
By the numbers
During the first quarter, MGM Resorts reported its Las Vegas Strip properties saw $2.2 billion in net revenue, a slight increase from the first quarter of 2025, according to the earnings release. Segment adjusted EBITDAR was $749 million in the first quarter compared to $811 million in the same period last year, representing a decrease of 8%.
Occupancy for its Las Vegas Strip properties was 92%, down from 94% in the first quarter of 2025. ADR was $257, the same as last year's first quarter, and RevPAR was $238, a decrease of 2% year over year. Total rooms revenue was $751 million, an increase compared to $750 million in the first quarter of 2025.
For the full company, including MGM Resorts' regional properties and two resort casinos in Macau, consolidated net revenue was $4.5 billion, a 4% year-over-year increase. Net income attributable to MGM Resorts was $125 million in the current quarter compared to $149 million in the prior year's first quarter.
As of press time, MGM Resorts' stock was trading at a price of $39.27 per share, up 24.83% year over year. The NYSE Composite Index was up 19.03% for the same period.
Fed holds rates steady as new chairman prepares for confirmation
Outgoing Jerome Powell signals he'll stay on board as governor amid legal attacks
Jerome Powell, chairman of the U.S. Federal Reserve, during a news conference on Wednesday. (Daniel Heuer/Bloomberg via Getty Images)
https://www.costar.com/article/2060937569/fed-holds-rates-steady-as-new-chairman-prepares-for-confirmation?
Federal Reserve policymakers held interest rates steady for their third consecutive meeting of 2026, as they prepare for a change in leadership.
The meeting on Wednesday likely marked Fed Chairman Jerome Powell's last session as chair. The Senate is moving forward to confirm Kevin Warsh as his replacement, and Warsh would assume the seat of current Fed governor Stephen Miran. In a rare move, Powell said he intends to remain on the board as a governor for a period of time due to coming under legal fire from the Trump Administration.
The decision to hold rates steady passed by an 8-4 vote. Miran dissented, favoring a 25-basis-point cut, as he has at every meeting since joining the Fed last September. Beth Hammack, Neel Kashkari and Lorie Logan also dissented but for a different reason. They support holding the target range for the federal funds rate steady but opposed including language in the policy statement that suggested rates could ease.
The vote leaves the benchmark rate at 3.5% to 3.75%, with persistent inflation and uncertainty over the conflict’s economic toll cited as reasons to stay put.
Higher oil prices and supply chain disruptions linked to the Iran war have added pressure on policymakers still trying to bring inflation back to the Fed’s 2% target.
The national average gasoline price stood at $4.21 a gallon as of April 27, according to the U.S. Energy Information Administration. That's down slightly from an early‑April peak but still roughly a dollar higher than before the war began.
Speaking at his final press conference as chair, Powell said, “People are not saying that we need to hike now,” adding that monetary policy is “pretty close to the neutral rate,” or a level that neither stimulates nor restricts the economy.
He said some colleagues’ view policy as closer to the upper end of neutral estimates, leaving room for a rate cut, while he has long placed the neutral rate between 3% and 4%.
Inflation data underscore that tension. The consumer price index rose 3.3% in March, the highest since April 2024, driven by a nearly 19% spike in gasoline prices. Core inflation, which strips out food and energy, rose 2.6% year over year.
Powell said the labor market is not currently a source of inflation, adding that those risks were more pronounced when the job market was overheating during the pandemic.
Asked whether higher oil prices could bleed into core inflation in the coming months, Powell said, “those prospects are real,” and that the Fed would have to “wait and see.”
Powell also said the number of officials favoring more neutral language in the policy statement has “increased,” describing the discussions as “vigorous,” though still short of a majority.
Elsewhere, the Bank of Canada on Wednesday kept its policy interest rate unchanged at 2.25% and signaled it is in no rush to move rates so long the economy performs as expected.
Commercial real estate watchers await a cut
As the Fed patiently sifts through the noise and signals of energy shocks, tariffs and other economic uncertainties, commercial real estate experts said they were unsurprised by the central bank standing pat.
"While this stage of the cycle can feel as though the recovery is moving in slo-mo, we are witnessing a trend of capital migrating into core and core-plus strategies,” Marion Jones, a principal and executive managing director of U.S. Capital Markets with Avison Young, said in a statement. “Should rate cuts materialize later this year, they would accelerate deal flow, particularly in multifamily and help reignite transaction volume across sectors.”
While some told CoStar News the commercial real estate finance sector had mostly already factored in the current rate levels, others emphasized a flat rate environment alone does not unlock the capital markets.
“For [commercial real estate], a hold is better than a surprise hike, but it is not the same as relief,” Cary Goldman, the founder and managing partner of Chicago-based private equity firm Timber Hill Group, said in a statement. “The industry still faces a cost of capital that is meaningfully higher than the low-rate period many assets were acquired under. That continues to affect refinancing proceeds, lender sizing, debt yields, [debt-service coverage ratio] tests, and cap rate assumptions,” he continued.
The base case remains one to two cuts this year, but the timeline is becoming more uneven and less predictable, according to Ryan Severino the chief economist and head of research at investment group BGO. Others, however, predicted another outcome. J.P. Morgan Global Research said in a blog post the Fed is slated to likely continue holding rates steady for the rest of 2026, before hiking 25 basis points in the third quarter of 2027.
Sentiment shows moderated optimism
A report released earlier this month by the commercial real estate development association NAIOP found the commercial real estate industry expects slightly improving conditions over the next 12 months, but many in it are less optimistic than they were back in the fall.
According to the survey, which had a total of 266 respondents from 237 distinct companies participate, developers and building owners continue to rank local economic conditions and interest rates as the two most important factors influencing development decisions. However, favorability scores for both conditions declined meaningfully from September 2025.
The answers were collected in March.
“The impact of AI on office occupancy is my biggest concern along with interest rates not coming down and construction prices continuing to go up slightly. Rent is not keeping up,” an unnamed survey participant said.
Most respondents said they expect to be most active in either industrial or multifamily real estate during the next 12 months.
Powell said at the press conference there is an "insatiable demand for data centers" and that there is "a lot of business investment going into building data centers, and every reason to think that continues."
Housing recovery on hold
There are signs any recovery in the housing market may be delayed. Brad Case, chief residential economist at Homes.com, said the spring home buying season is being tested by the volatility in mortgage rates and heightened uncertainty stemming from the Iran war.
“The homes market is in the middle of its spring buying season, but the big jump in mortgage rates during March has put it in some danger,” Case said, adding that many buyers and sellers are choosing to delay decisions rather than commit amid uncertainty.
While the Fed doesn’t set mortgage rates directly, it controls short-term rates that banks charge each other. Its policy signals can influence longer-term borrowing costs and buyer psychology.
Wednesday’s decision to hold interest rates unchanged “shouldn't have any significant effect on the homes market,” Case said. “At most, that could prompt homebuyers to become slightly more aggressive in their incentives, to reduce their own uncertainty by getting inventory off their books. But I don't think the Fed's decision is likely to affect mortgage rates.”
Powell stays on as board governor
Powell made it clear that he plans to stay on the board for now, a position he can hold through January 2028. He cited concerns for what he described a “series of legal attacks” on the Fed.
“I worry that these attacks are battering the institution and putting at risk the thing that really matters to the public, which is the ability to conduct monetary policy without taking into consideration political factors,” Powell said
He added that he felt that he has “no choice” but to stay. It's not unprecedented. After Fed chair Marriner Eccles — who gives his name to the Fed’s building in Washington, D.C. — resigned as chairman in 1948, he remained on the board as a member until 1951. Past Fed chairs have typically left the board when their terms ended.
Powell had previously indicated he would remain at the Fed until the Justice Department finished its investigation, a milestone reached last week. His four‑year term as chair expires May 15, with Warsh, a former Fed governor nominated by President Trump, expected to be confirmed ahead of the Fed’s June meeting.
The Justice Department probe focused on the Fed’s $2.5 billion renovation of its Washington headquarters, after cost estimates rose from $1.9 billion. A federal judge later ruled the investigation was an improper attempt to pressure the central bank. U.S. Attorney Jeanine Pirro last week dropped the probe and referred the matter to the Fed’s inspector general, which had previously found no wrongdoing.
Powell said, "I will leave when I think it is appropriate to do so,” making clear that his decision is tied to concerns about the Fed’s independence from political pressure. He reiterated he wants certainty the investigation is “well and truly over.”
He said his intention in remaining on the board is not to interfere with his successor, suggesting that he plans to keep a low profile as a governor. “There’s only ever one chair of the Federal Reserve Board."
Powell congratulated Warsh on advancing out of the Senate Banking Committee vote Wednesday. He said he expects Warsh to be confirmed and sworn in, then elected by his colleagues to serve as chair of the Federal Open Market Committee. “This is an important step forward, and I wish him well as that process continues,” Powell said.
He added that Warsh has the “capabilities and skills” to build consensus, something Powell described as essential for a Fed chair given how decision‑making is shared across the central bank.
Asked whether he believes Warsh would stand up to political pressure from the administration, Powell pointed to Warsh’s testimony at his Senate hearing last week and said he’ll “take him at his word.”
U.S. Demands Access to Europeans’ Private Data or Say Goodbye to Visa-Free Travel
LangPhoto/iStock
https://www.fodors.com/news/news/u-s-demands-access-to-europeans-private-data-or-say-goodbye-to-visa-free-travel
The EU is negotiating a deal with Washington.
Citizens of the European Union do not need to apply for a visa to visit the U.S. The two sides have a visa waiver program in place. Now, however, the U.S. is adding a condition: If the EU wants to continue to enjoy visa-free travel, it needs to give American authorities access to its database.
The U.S. has asked all countries that are part of its visa waiver program to sign bilateral agreements—called the Enhanced Border Security Partnership (EBSP)—with the Department of Homeland Security. Australia and New Zealand are also negotiating with the U.S. These deals need to be finalized by December 2026 if countries want to keep travel visa-free with the U.S. Participating countries will need to provide access to personal and biometric data for border control and anti-terrorism efforts.
This is a highly controversial move in Europe. The EU’s General Data Protection Regulation (GDPR) offers strong protections to residents regarding their data. Businesses must comply with rules about data collection and processing of EU residents. They need to be clear and transparent about data use, and residents have the right to deny or withdraw consent at any time. The U.S., however, does not have such protections in place, and experts are concerned this could lead to mass surveillance.
The European Data Protection Supervisor (EDPS) noted this would be the first time large-scale data would be shared with a third country, so data processing needs to remain transparent and uncontroversial. However, critics worry that there is no way for the EU to guarantee safeguards. They also question how data would be used once transferred, and what the consequences would be. Countries may have information not only on criminals, but also suspects or asylum seekers, so the scope might differ in each country.
A member of the European Parliament, Hermida-van der Walle, criticized the proposal, calling it blackmail. “The pressure which the United States is exerting on our member states, the threats that if you don’t agree with this, we will cancel your access to the visa waiver program, that is an element of blackmail that we cannot let go.” Leaders have also written to EU President Ursula von der Leyen, urging reconsideration. “Looking at the current geopolitical context, we consider it undesirable for the European Commission to start or continue such negotiations,” it said.
In recent years, the U.S. has used various surveillance methods to track individuals. The Department of Homeland Security’s Immigration and Customs Enforcement (ICE) is using artificial intelligence to monitor Americans, relying on biometric data and facial recognition. These efforts have raised concerns about civil rights, as the agency taps into a network of federal, state, phone location, and social media databases to identify and surveil people. In February, a woman who participated in protests against ICE lost access to Global Entry and TSA PreCheck. Others have reported ICE agents using phones to deploy facial recognition software to identify them.
Most travelers from the EU do not need to apply for a visa to visit the U.S. for less than 90 days, except those from Bulgaria, Cyprus, and Romania. As part of the visa waiver program, the U.S. requires an Electronic System for Travel Authorization (ESTA) application to be filled out before travel. Last year, the Trump administration proposed stricter visitor vetting, now requiring five years of social media history, all emails used in the last decade, and more family details. Nonimmigrant and immigrant visa applicants have had to share this information for years, but the policy now expands to millions who travel visa-free, including citizens of the EU, Australia, Qatar, and the U.K.
It is possible that criticizing the government or its policies could get travelers barred from entering the country—it allegedly happened to a Norwegian after immigration officers found a JD Vance meme on his phone. Travelers, wary of the same treatment, might censor themselves, which would be a blow to free speech. Worse yet, experts warn this could create a chilling effect among travelers, who might take their tourist dollars elsewhere.
Luxury leads Hyatt performance in first quarter
https://hotelsmag.com/news/luxury-leads-hyatt-performance-in-first-quarter/?
by David Eisen
Hyatt Hotels Corp. leaned on luxury to generate first-quarter RevPAR growth of 5.4% compared to the same time a year ago.
“RevPAR growth in the U.S. was ahead of expectations, and we saw strong growth across most international markets,” said Hyatt President and CEO Mark Hoplamazian. Leisure demand from Hyatt’s premium customers was exceptionally strong in the quarter, Hoplamazian added, increasing approximately 7% compared to last year. “If there’s any sign of weakness in terms of the high-end customer, we have not seen it,” said Hoplamazian.
Net rooms growth for the trailing 12 months was 5%, and its pipeline of executed management or franchise contracts was approximately 151,000 rooms, an increase of 9.4%, compared to the first quarter of 2025.
Hyatt opened 3,996 rooms in Q1, with notable openings including Andaz Lisbon, Andaz Shanghai ITC, and The Livingston in Brooklyn, part of its JDV collection, the first Hyatt-branded hotel in the New York borough. Hoplamazian underscored Hyatt’s Essential brands, inclusive of Caption by Hyatt, Unscripted by Hyatt, and Hyatt Place, to name three of the seven. Those brands entered seven new markets during the quarter. “These brands are an important driver of our growth strategy, allowing us to expand our brand footprint in markets where we have significant white space, while also offering attractive economic returns to owners,” Hoplamazian said.
For the full year, Hyatt guided RevPAR growth of between 2% and 4%, compared to full-year 2025, with an expected 2% to 3% growth in the U.S. in the second quarter. Hyatt expects net room growth of between 6% and 7% for the full year.
“Our strong first quarter results reflect the continued strength of our core fee business and the resilience of our differentiated portfolio of high-quality brands. As we look to the balance of the year and beyond, we are focused on further elevating Hyatt by strengthening the performance of our brands, our talent, and our technology to enhance how we operate and build on our competitive advantages. We believe this foundation, combined with our high-end customer base, robust pipeline with significant opportunities for expansion, and rapidly growing loyalty program, positions us to drive sustained growth and create long-term value for shareholders,” Hoplamazian offered in a prepared statement.
Hyatt said it had terminated the sale of Andaz London Liverpool Street.
World of Hyatt, the company’s loyalty program, ended the first quarter with approximately 66 million members, an increase of 18% compared to the first quarter of last year. Members, Hoplamazian said, accounted for nearly half of total occupied rooms globally. “When our members stay with us, they spend nearly twice as much compared to a non member, highlighting the engagement from our premium customer base,” Hoplamazian said.
Hyatt continues to follow its asset-light strategy by divesting assets in order to focus on a fee-based business. Hoplamazian said the company is continuing to make progress on the sale of Hyatt Grand Central New York, “and could be in a position to close that transaction in the fourth quarter of 2026,” he said.
Meanwhile, Hyatt elected to terminate the purchase-and-sale agreement for the sale Andaz London Liverpool Street; separately, it is no longer under contract for two other properties that were previously signed. “Our decisions not to move forward were specific to the individual transactions and reflect our continued discipline around pricing and terms,” Hoplamazian said. As it pertains to Andaz London, Liverpool Street, Hoplamazian said that complications in the sale are partly due to its location above rail lines that are part Network Rail, UK’s national rail system, and approvals that are necessary from it that were not issued. “We don’t believe the the opportunity is dead,” Hoplamazian said, but it doesn’t have the authorities needed yet to move forward. “Our broader plans for additional asset sales and our confidence in the transactions market remain unchanged,” he added.
Hyatt said there will be a higher impact to its business in the Middle East in the second quarter, but expects improvement in the second half of the year. The one region that has been exceptionally strong is China, said Hyatt CFO Joan Bottarini, with RevPAR in Q1 exceeding double digits year-over-year. “China looks like a region that we can continue to rely on for growth for the remainder of the year,” she said.
In Europe, Hoplamazian pointed to a bifurcation based, he said, on economic fragility around the escalation of energy prices. “This is an example where there’s going to be a difference between how economy and midscale perform versus full-service and luxury,” he said.
Hoplamazian said he was bullish over World Cup pace despite reports of softness in bookings. “The pace that we’re seeing in the cities that are hosting the World Cup is very strong,” he said, especially for New York, which will host the finals in July. He added that Hyatt is seeing significant group business, also pacing well ahead in host cities.
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