12.12.07
At MGM, many gamble, but fewer stay overnight
BY JOHN GALLAGHER and HEATHER NEWMAN
FREE PRESS STAFF WRITERS
Is there too much room at the inns?
Since the MGM Grand Detroit hotel opened in early October, bookings have been running below the metro Detroit average of about 55% occupancy, raising fears whether all of downtown's new hotels will find enough customers.
George Boyer, president and chief operating officer of MGM Grand Detroit, reported the soft hotel occupancy results during an otherwise upbeat report Tuesday to the Michigan Gaming Control Board.
MGM's casino revenues for November were up $6 million, or nearly 15%, from the same month in 2006, when the MGM was in a temporary location. The take of $46.8 million was down from MGM Grand's debut month of October, when the celebratory opening resulted in $54.9 million in revenue, but that was expected.
Boyer did not give an exact figure for MGM Grand's hotel occupancy. Occupancy figures for the new MotorCity Casino hotel, which opened late last month, were not available, either.
Robin Boyle, a professor of urban planning at Wayne State University and co-chair of the Urban Land Institute, a real estate education association, said he wasn't surprised at the soft occupancy levels.
"To get momentum for the new hotels is going to take quite a lot of concerted efforts from all the different players, and I think that is coming together," he said. "The trouble is, these things take time, and perhaps the delivery of hotel rooms is a little bit ahead of getting this message out."
Downtown Detroit is in the process of nearly doubling its inventory of hotel rooms, with the MGM Grand and MotorCity Casino hotels and the old Hotel Pontchartrain having reopened as a Sheraton.
Also, the renovated Westin Book Cadillac, the Doubletree Fort Shelby, and the Greektown Casino hotel are all expected to open in fall 2008 or shortly after. The six hotels together offer about 2,000 rooms to the downtown market.
Leaders of the Detroit Metro Convention & Visitors Bureau say the new hotel rooms are key to fulfilling the city's hopes of growing its convention business.
"When you basically double the inventory of hotel rooms anywhere, it's going to take a little bit of time to balance things out," Michael O'Callaghan, executive vice president of the convention bureau, said Tuesday. "You have to create a new customer base. But I'm confident that all three casino hotels have all done their due diligence. They know that in the long run they'll all do just fine."
Some of the new hotels may be doing better than others. Scott Stinebaugh, director of marketing for the Westin Book Cadillac, said his hotel, which is to open in October 2008, already is fully booked for the January 2009 North American International Auto Show.
In other casino news, MotorCity and Greektown casinos reported revenue increases in November. Greektown's $2.5-million revenue jump followed the recent opening of its mammoth new parking garage.
MotorCity had $38.3 million in November revenues. That was up from October's $37.7 million, before it moved to its new location.
The total take for the three casinos in November declined to $113.2 million, down about $5 million from October's record combined take.
But the figure was up from the November 2006 take of $108.3 million.
Contact JOHN GALLAGHER at 313-222-5173 or gallagher@freepress.com.
Find this article at:
http://www.freep.com/apps/pbcs.dll/article?AID=/20071212/BUSINESS06/712120316/1019
BY JOHN GALLAGHER and HEATHER NEWMAN
FREE PRESS STAFF WRITERS
Is there too much room at the inns?
Since the MGM Grand Detroit hotel opened in early October, bookings have been running below the metro Detroit average of about 55% occupancy, raising fears whether all of downtown's new hotels will find enough customers.
George Boyer, president and chief operating officer of MGM Grand Detroit, reported the soft hotel occupancy results during an otherwise upbeat report Tuesday to the Michigan Gaming Control Board.
MGM's casino revenues for November were up $6 million, or nearly 15%, from the same month in 2006, when the MGM was in a temporary location. The take of $46.8 million was down from MGM Grand's debut month of October, when the celebratory opening resulted in $54.9 million in revenue, but that was expected.
Boyer did not give an exact figure for MGM Grand's hotel occupancy. Occupancy figures for the new MotorCity Casino hotel, which opened late last month, were not available, either.
Robin Boyle, a professor of urban planning at Wayne State University and co-chair of the Urban Land Institute, a real estate education association, said he wasn't surprised at the soft occupancy levels.
"To get momentum for the new hotels is going to take quite a lot of concerted efforts from all the different players, and I think that is coming together," he said. "The trouble is, these things take time, and perhaps the delivery of hotel rooms is a little bit ahead of getting this message out."
Downtown Detroit is in the process of nearly doubling its inventory of hotel rooms, with the MGM Grand and MotorCity Casino hotels and the old Hotel Pontchartrain having reopened as a Sheraton.
Also, the renovated Westin Book Cadillac, the Doubletree Fort Shelby, and the Greektown Casino hotel are all expected to open in fall 2008 or shortly after. The six hotels together offer about 2,000 rooms to the downtown market.
Leaders of the Detroit Metro Convention & Visitors Bureau say the new hotel rooms are key to fulfilling the city's hopes of growing its convention business.
"When you basically double the inventory of hotel rooms anywhere, it's going to take a little bit of time to balance things out," Michael O'Callaghan, executive vice president of the convention bureau, said Tuesday. "You have to create a new customer base. But I'm confident that all three casino hotels have all done their due diligence. They know that in the long run they'll all do just fine."
Some of the new hotels may be doing better than others. Scott Stinebaugh, director of marketing for the Westin Book Cadillac, said his hotel, which is to open in October 2008, already is fully booked for the January 2009 North American International Auto Show.
In other casino news, MotorCity and Greektown casinos reported revenue increases in November. Greektown's $2.5-million revenue jump followed the recent opening of its mammoth new parking garage.
MotorCity had $38.3 million in November revenues. That was up from October's $37.7 million, before it moved to its new location.
The total take for the three casinos in November declined to $113.2 million, down about $5 million from October's record combined take.
But the figure was up from the November 2006 take of $108.3 million.
Contact JOHN GALLAGHER at 313-222-5173 or gallagher@freepress.com.
Find this article at:
http://www.freep.com/apps/pbcs.dll/article?AID=/20071212/BUSINESS06/712120316/1019
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