Nongaming ventures part of MGM Resorts’ global strategy

MGM Resorts International is known for its Las Vegas and Macau casino and gaming business.

But since establishing its subsidiary MGM Hospitality in 2007, the company has quietly shifted to emphasizing its global nongaming business.

Its biggest impact to date will be felt in China, where MGM will open hotels in Beijing, Sanya, Tianjin, Chengdu and Shanghai through 2014. The first MGM Grand Sanyan on Hainan Island is to open in September as MGM's first noncasino project.

"We are focused on rebranding the company to focus growth in international markets," Gamal Aziz, president and chief executive officer, told the Las Vegas Review-Journal. "We have taken our upscale brands global and have received a great reception."

The company has signed 18 deals to develop and manage its three luxury brands -- Bellagio, MGM Grand and Skyloft -- from Vietnam to Dubai, United Arab Emirates, and India. MGM Grand Macau, which opened in December 2007, was the company's first overseas venture.

Aziz said the company's foreign growth is driven by demand for "fresh" hotel product.

He said many of the expansion cities already have Ritz-Carltons and other upscale brands, but MGM is an "energy-based destination" offering more than an upscale room experience.

The company's "destination hotels" will offer locals quality restaurants and high-end shopping while also appealing to international travelers who feel at home with the brand, Aziz said.

"Many have been to an MGM property in Las Vegas and want that sophistication in their own backyards," Aziz said.

With 18 properties in development, he said the goal now is to establish the MGM brands in "getaway cities around the world," including Singapore, London, Paris and Hong Kong.

Aziz is not only charged with leveraging the MGM brands, but increasing the company's presence by developing and operating hotels in emerging markets. Gambling is either banned or strictly controlled in many Asian and the Middle Eastern countries, so MGM is looking to countries with a growing middle class able to spend money at Las Vegas-quality resorts.

"There has been tremendous growth in China and India," he said. "In China, its strength is in the economy and its strength is also in the real estate market. Same thing in India."

Because the company doesn't franchise its brands, all the properties will be developed and managed by MGM Hospitality, Aziz said.

The company has nine management agreements signed in China, and recently announced that it is developing MGM Grand hotels in the Indian cities of Mumbai and New Delhi.

Construction in New Delhi is expected to finish in 2014. MGM Hospitality will operate the hotel in partnership with Silver Resort Hotel India Private Ltd. The hotel will feature about 480 rooms, along with suites and apartments.

Southeast Asian markets where the company has properties under construction or in development include Vietnam and Taiwan. The MGM Grand set to open next year in Ho Tram, Vietnam will have gambling. But Egyptian resorts in Sharm el Sheikh and Cairo will not. MGM Hospitality is also developing properties in Amman, Jordan and Doha, Qatar.

"The Middle East is also continuing to see strength in its hotel capacity and strength in real estate," Aziz said. "We have not lost a single project to the (political changes) in the region. In Egypt, construction continued and we were asked to speed up the process."

The MGM Grand in Sharm el Sheikh is scheduled to be completed in 2014; the Cairo hotel in 2015.

Aziz said he also expects the MGM Grand and Bellagio brands take hold in Latin America.

"That may take some time. There is not a lot of demand for inventory in North America and Europe," he said. "The next five years will shape this company."

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.