The Strip’s largest resort operator said the No. 1 complaint it hears from its Southern California customer base — roughly one-quarter of the company’s overall business — is backups on Interstate 15.
MGM Resorts International CEO Bill Hornbuckle said dedicating just a small portion of the $4 billion to $5 billion the federal government has earmarked for transportation infrastructure improvements throughout the U.S. to fix the portion of the interstate that connects the Strip with Southern California “would go a long way” toward solving the challenges faced by the resort industry’s largest customer base.
A few years ago, Hornbuckle took the drive himself just to experience what MGM’s Southern California guests experience that turn a four-and-a-half-hour commute into an eight-hour slog with backups stretching up to 20 miles.
“I just sat there and thought about what our customers were thinking,” he said. “People are resilient. I’ll give them that.”
Hornbuckle said he has heard similar concerns about I-15 from his fellow Strip operators.
Nevada and other tourism states, except for Hawaii, draw most of their customers by interstate highways. MGM operates nine resorts with more than 37,000 hotel rooms on the Strip.
Fixing Los Angeles to Las Vegas transportation problems is one the reasons Hornbuckle took on the role as chairman two years ago of the U.S. Travel and Tourism Advisory Board, which advises the U.S. Department of Commerce on how government policies and programs affect the industry.
Funds from the infrastructure bill are one way to solve the issue. Dealing with the federal government, Hornbuckle has learned, has its challenges. In his role with the advisory board, Hornbuckle has made the case for trying to free up federal money to give I-15 a much-needed renovation.
“When you looked at what the infrastructure bill provided, there’s substantive money there to improve highways. It’s getting through the process,” Hornbuckle told The Nevada Independent in an interview in his office at the Bellagio last week, just ahead of the July 4 holiday.
During his time on the panel, Hornbuckle has grown close to Commerce Secretary Gina Raimondo, the former governor of Rhode Island, which is also considered a tourism state.
“We kind of speak the same language,” Hornbuckle said.
One of the challenges in fixing I-15 is that most of the problems are on the California side.
In December 2021, then-Gov. Steve Sisolak and California Gov. Gavin Newsom held a Sunday morning press briefing at the state line near Primm where they made a commitment to help loosen a 5-mile stretch of I-15 by adding a third travel lane in each direction on the California side.
Newsom committed $12 million to the effort.
Hornbuckle said California has not held up its end of the deal on the project, which Sisolak predicted at the press conference would be finished in the summer of 2022.
“I think Nevada has done a good job with what it could do with the first 30 miles of I-15 on our side,” he said. “Their side has been tied up with an environmental study. It supposedly will be done by January and put into play next spring. But it just demonstrates how hard and how long some of this stuff takes.”
Hornbuckle said another 100 miles of I-15 on the California side also requires some attention, such as adding a third travel lane.
“Depending on how you want to approach it, right, a billion dollars or less makes that a sufficiently different experience,” he said.
The other issue with I-15 is that it serves as an important connection for interstate commerce, which often adds to the traffic woes.
“There’s $100 billion a year of commerce that comes out of I-15,” Hornbuckle said. “So, God forbid it breaks or there’s a challenge, you have interstate commerce transit sitting in that same line. So it’s an important issue to them and it’s important to tourism.”
Hornbuckle has made the case to Raimondo and Secretary of Transportation Secretary Pete Buttigieg, who said he plans to appoint a director in his agency to deal with tourism issues.
Other ways to get here
Transportation for Las Vegas visitation has additional challenges.
Passenger volume at Harry Reid International Airport has increased almost 19 percent in the first five months of 2023 compared to a year ago. In 2022, the facility saw a single-year record of 52.6 million travelers.
Hornbuckle said Reid Airport is nearing a ceiling in passenger figures.
“55 million, that’s basically the breaking point right now,” Hornbuckle said. “It’s not going to happen overnight, but at some point, we’ll have to deal with it.”
Any airport expansion plans, he added, “is a 10-year story,” which includes an environmental study before the Clark County Department of Aviation could develop a second airport — one has been discussed conceptually for the Ivanpah Valley near Primm.
One solution could be the Brightline West 218-mile-long high-speed rail project between Victorville, California, and Las Vegas. Brightline is seeking $3.75 billion to help develop the system.
Last week, the Department of Transportation awarded $25 million to the San Bernardino County Transportation Authority, in conjunction with developer Brightline, for two stations on the proposed line in Hesperia and Apple Valley, California.
Brightline wants to build a station in Las Vegas on the southern end of Las Vegas Boulevard.
Hornbuckle said the high-speed train could conceivably “take 15 percent of the tourist traffic off I-15 and it could be helpful to the airport.”
Even with the Nevada congressional delegation supportive of the project, he said the train was “still a 10-year build-out.”
A challenge from Oak View
In addition to his views on the infrastructure issues, Hornbuckle provided some thoughts on potential competition in Las Vegas and the company’s growth plans in New York and internationally.
When MGM Resorts and AEG opened T-Mobile Arena in 2016, the 18,000-seat venue was built with NBA specifications if the league were to expand or relocate a franchise to Las Vegas. Now, with respected arena developer Tim Leiweke’s Oak View Group planning a 20,000-seat venue at Las Vegas Boulevard and Blue Diamond Road, MGM could have competition should the NBA expand.
Hornbuckle said it’s unclear if the NBA will expand but he said MGM and AEG are prepared to make an additional investment into T-Mobile, which was built for $360 million without any public financing.
“We think T-Mobile is ideally situated,” Hornbuckle said. “Do we think we need another arena in town? The answer’s no. But they’re entitled to take their shot.”
Waiting on New York
Most analysts believe MGM will earn one of three New York City-area casino licenses because the company has operated a slot machinelike video lottery terminal casino in Yonkers since 2019. MGM wants to convert the 4,500-game Empire City casino into a Las Vegas-style resort with slot machines and table games.
Hornbuckle said the MGM has the support of government officials and Yonkers residents for the casino.
“They’re pretty excited about what we have proposed,” Hornbuckle said.
However, New York is also considering a casino for Times Square, Long Island or near the Javits convention complex. The state may push the selection into 2024.
“Obviously I’d like to see its process sped up,” Hornbuckle said.
Macau bounces back
MGM’s two casinos in Macau have experienced an economic rebound along with the rest of the Chinese gaming after nearly three years of stops and starts due to the pandemic. Macau casino revenue is 205 percent higher than it was in 2022.
“We’re back to 2019 economic levels on 60 percent of the visitors,” Hornbuckle said of some Macau customers’ continued reluctance to travel after numerous travel restrictions and China’s now-abandoned zero COVID policies.
An offshoot from that is international travel to Las Vegas is still about 80 percent of what the market saw prior to the pandemic.
“What hasn’t happened yet, in particular, are the Chinese venturing all the way back to America at any scale,” Hornbuckle said. “We’re still focused on working on that.”
From Japan to Dubai
Hornbuckle was bullish MGM Resorts’ international expansion effort in Japan and the United Arab Emirates.
In Osaka, after some 12 years of stops and starts, he said the company “may be the only Japanese gaming license to get to the finish line” in 2029 with its $10 billion integrated resort complex in Osaka. Hornbuckle said the company expects to sign a land lease and area development plan with the government and its Osaka-based partner by the end of the year and begin construction sometime in 2024.
In addition to gaming, the complex will offer a sprawling selection of nongaming attractions, including 2,500 hotel rooms, more than 700,000 square feet of conference and exhibition facilities, retail shopping, a variety of food and beverage offerings and other resort and entertainment activities.
“As long as Tokyo and Yokohama do not want to participate, Osaka is the only other place that can provide the scale that this requires based on the requirement the government put forward,” Hornbuckle said.
In Dubai, MGM has begun work on a nongaming resort that is being built with a space set aside for a casino should the emirate legalize gaming. Hornbuckle said the 1,200-room development is “focused on the hospitality play” with a resort complex that will include hotels under the Aria, MGM and Bellagio brands.
