MGM Brand Heading to Shanghai for Non-Gaming Hotel

Posted on: July 5, 2022, 01:12h. 

Last updated on: July 6, 2022, 02:48h.

Todd Shriber Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

MGM Resorts International is bringing its iconic brand to Shanghai — China’s most populous city — for a new, non-gaming hotel.

MGM Shanghai
A woman takes a photo near the skyscrapers in Shanghai, above. MGM is bringing a non-gaming hotel to the Chinese city. (Image: Bloomberg)

Diaoyutai MGM Hospitality said today it reached an agreement with Shanghai West Bund Development (Group) Co., Ltd. to apply the venerable MGM brand to a hotel in the central activity zone of Shanghai West Bund.

As part of the agreement, MGM will provide the full range of its signature artistic and entertainment experiences, as well as its luxury hospitality capabilities to one of the city’s most famous international cultural landmarks,” according to a statement.

The release makes no mention of casino gaming because that activity is prohibited in mainland China. Macau, the world’s largest casino center, is the only Chinese territory where wagering is permitted. That is a special administrative region (SAR) controlled by China. There, MGM China runs MGM Cotai and MGM Macau. The US-based company owns almost 56% of that entity.

Enhanced China Connection Could Pay Dividends for MGM

The venue in Shanghai will be MGM’s first in mainland China and could prove successful in terms of further building the company’s brand recognition in the world’s largest country.

Mainland China is the largest source of visitors to Macau. Additionally, MGM Resorts International can capitalize on its China visibility to, in normal operating environments, bring wealthy Chinese gamblers to the operator’s Las Vegas Strip venues, such as the Bellagio, Cosmopolitan, and MGM Grand.

“MGM Shanghai West Bund will feature 161 stylish guest rooms and 58 suites, along with an Italian restaurant,” according to the statement. “The hotel’s Chinese fine-dining restaurant will showcase a range of storied Diaoyutai cuisines.”

The hotel’s spa carries a five-star rating from Forbes and is one of the largest in Shanghai.

MGM Leveraging the Brand

Obviously, casino gaming is one of MGM’s core competencies and its bread and butter in the US and Macau. But given the value ascribed to the brand, there can be favorable economics in applying it to non-gaming venues.

For example, the operator is building a hotel in Dubai, where it acknowledges the likelihood of casinos being approved anytime soon is slim. Rival Caesars Entertainment, which controls another one of the industry’s most visible brands, has a non-gaming property in Dubai and licenses its name out to other hotels that don’t feature casinos.

“Diaoyutai MGM Hospitality currently operates five hotels and three branded residences under various brands of Diaoyutai, MGM, Bellagio by MGM, Mhub by MGM, and Diaoyutai MGM Residences in strategic locations throughout China, including Beijing, Shanghai, Chengdu, Hangzhou, Nanjing, Sanya, and Haikou,” according to the statement.

The hospitality entity is a joint venture between Diaoyutai State Guesthouse and MGM Resorts.