Las Vegas Weekly

December 2, 2009 · 12:56 PM

Exclusive: An interview with MGM Chairman and CEO Jim Murren

By Robin Leach

Jim Murren, chairman and CEO of MGM, and his wife Heather Murren at the Vanity Fair party for the grand opening of Vdara Hotel & Spa at CityCenter on Dec. 1, 2009.

Photo: Erik Kabik/Retna/www.erikkabikphoto.com

Now that the $8.5 billion CityCenter is opening on the Strip this week -- from Vdara yesterday to Crystals and Eva Longoria Parker’s Beso tomorrow to Mandarin Oriental on Friday -- you’d think that MGM Chairman and CEO Jim Murren could relax just a little. (MGM owns CityCenter with Dubai World).

Not so, as Jim chatted with me about CityCenter, its 12,000 employees, its more than 6,000 rooms and the future that might very well include expanding in the neighborhood.

Robin Leach: So five years, 14 days and 38 hours later, how does it feel?

Jim Murren: I’m incredibly proud, honestly. This was a battle, this was a prizefight, and we were on our knees a couple times and never got knocked out. We are still standing, and now we can deliver this to the community. Employ 12,000 people in this economy. No company is doing that in the country. To be able to create this shot in the arm for a community that has been on its back, I feel incredibly proud.

RL: You raised the ogre of skepticism from around the world. You must be watching these figures of room reservations and conventions bookings. Do you sense the turn? Do you see the turn?

JM: You know we are not out of the woods, there is no doubt, but we have a pretty good barometer of what is going to happen in the future. As you know, we have customers who enjoy Circus Circus, customers who enjoy Bellagio, and pretty much everything in between, and what we see is that business is going to remain soft in the near term and people are still going to come. We reduced rates. No doubt about it, we are creating great value. But we see booking progressively improve starting in April of next year. Importantly, this is the key: Business is getting back to business. Meaning our convention business looks like it’s going to be much stronger in the next half of next year.

Photo: Denise Truscello/WireImage

Sebastian Copeland, MGM Chairman and CEO Jim Murren, Rosario Dawson and Orlando Bloom at the Vanity Fair party for the grand opening of Vdara Hotel & Spa at CityCenter on Dec. 1, 2009.

So, when we look at all of the data, and we have, we have a mountain of it, we see people starting to feel a little better about themselves, they start spending a little more. They are getting off their butts, getting off the couch; they are traveling here, driving here. Vehicular traffic is up from California. Airline traffic, internationally, is improving, and I think we are gradually healing as an economy and as a community. It’s going to be a slow recovery, but we are in that recovery mode.

RL: That’s good to hear. When all of the properties are open, you are 6,000 rooms. I don’t know what 365 nights times 6,000 is, but I’m sure you do. How many people do you need to book into these towers to make this work?

JM: The math is about 35 1/2 million people are going to visit Las Vegas this year in the teeth of this recession. That is down from last year and down from the year before. If visitation grows but 3.6 percent, I know that is kind of a specific number, but in other words, if visitation grows by a million people next year, all the rooms being added will be filled. All of them. I don’t think that’s going to happen. I think visitation is going to be up more like 7 percent next year. I think the economy improving will help, but I think CityCenter as a catalyst will bring incrementally more people here to the whole community for our competitors and us alike. I think that filling the rooms is not the concern I have. The concern I have is delivering on the promise when they get here, the personalized service and something as impressively large as this, and not to the detriment of the other resorts that we own because what would be the point of that.

RL: So are these new customers coming here or are you going to take from what you have and then add new customers to them?

Photo: Denise Truscello/WireImage

Heather Murren, Rosario Dawson and MGM Chairman and CEO Jim Murren at the Vanity Fair party for the grand opening of Vdara Hotel & Spa at CityCenter on Dec. 1, 2009.

JM: I think vast. I think both because we are talking the law of big numbers. The international business, which you follow very closely, that market is so important to us. It’s about 20 percent of MGM Mirage business. It’s growing since America is on sale with the dollar how it is. We cater to them more than anybody. The international customers know about CityCenter. It has been around four or five years. It has been in the global news. Not all of it has been good, and some of it rugged, but it’s been in the news.

RL: Well, it’s only been things financial.

JM: Yes and nothing otherwise. You know I was in the Middle East for the Formula One race and in China the month before, and I am in Europe next week. People have heard of this thing. They know the architects, they know what we are trying to create here, and they are going to visit. I think that visitation internationally to Las Vegas will be up double digits next year. Those people will stay longer and spend more money. Those people are very valuable to us. I think domestically, we will see a slow recovery. Not a great one, but a slow recovery. I think we will be able to lift the tide here for our competitors and ourselves alike. It’s going to be a slow recovery but a steady one, and we will be able to point to the sequential improvement.

RL: Las Vegas was always thought of as the gambling mecca. You have a hotel and another one across the street with no gaming. This is such a direct shift in thinking. Why just hotels in Las Vegas when this is a gambling mecca?

Photo: Raul Morales/Cashman Photography

Jim and Heather Murren at the Nevada Cancer Institute's Rock for the Cure gala at The Mirage on Nov. 12, 2009.

JM: I feel strongly about this. Las Vegas used to be where gamblers went on vacation, but now I feel like its vacationers that may gamble. It’s business travelers, it’s leisure travelers. It’s my mom from Connecticut who doesn’t spend a nickel in a slot machine, but she is a wealthy woman. She loves our restaurants, goes to our shows and shops -- she is a spa girl and loves the treatments. I feel very strongly that if we are going to break out of the shackles of being just a gaming company, we have to do it in a very dramatic way. I feel that this accomplishes that.

I know in my heart that people are going to come here with no interest at all in gambling, and they are going to enjoy it because what we have done here. It’s going to exceed their expectations and be at least comparable or superior to resort environments they have had anywhere in the world because of the energy, the excitement, the quality of the restaurants, and, yes, we have a very important casino, which will be the beating heart of this and which I think will drive a lot of international business.

If we are truly going to evolve as a community, then we have to get out of the mind set of one-way moving sidewalks in The Forum Shops and telling people where they are going to eat and what they are going to do. People are too discerning now. We created a very demanding consumer, and I am glad for that. Not everyone has to win, Robin. This is America. This is a capitalist country. I am a capitalist, and I am all for making money, and I think we will here.

RL: Can you ever top this? Do you ever want to top this?

JM: I don’t think this will ever be topped. I don’t think there is anything that will ever be built to this magnitude in Las Vegas ever again. Secondly, I don’t think there will be a major new development in Las Vegas for maybe five to 10 years. And thirdly, if we do this correctly, we could add to this. We have land all around. We own the neighborhood. So if this is as successful as I believe it to be, we don’t have to … the sum cost is there. Now you add bits and pieces to this to improve.

Photo: John Gurzinski

MGM Chairman and CEO Jim Murren.

RL: I don’t want to misread you on this. That means you could expand to where Monte Carlo sits? You wouldn’t expand to where the Bellagio is?

JM: Well, we also have all of this land behind us, which is for construction offices. We could create a better pedestrian experience from this to say the Mandalay Mile. You know, a better people mover and a better way to get people around.

RL: So those thoughts are ticking already?

JM: Of course. Master planning. One of the things that Las Vegas has failed is putting a smart civic master plan overlay to this. Private developers have ruled the roost. We have gotten some great resorts, but they fight one another. … We can create better circulation, and I think that would improve our business.

Robin Leach has been a journalist for more than 50 years and has spent the past decade giving readers the inside scoop on Las Vegas, the world’s premier platinum playground.

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