Updated: 2012-07-27 07:34
By Lu Chang (China Daily)
Jim Mrha says different types of entertainment levels in Las Vegas have to be localized in Sanya. Lu Chang / China Daily
Hotel and gaming giant places its bets on china - without the gambling
When news of MGM's plans to set foot in Sanya first hit the headlines, rumors began flying that the company in the United States known for its Las Vegas casino may be bringing its gambling business to China.
But Jim Mrha, general manager of MGM Grand Sanya, says the company has much more to offer and its first non-gambling hotel on the beach resort in China's southern Hainan Island marks a new global strategy that focuses on its non-casino-related business.
"MGM is more than just gaming," Mrha says. "Actually in Las Vegas 60 percent of our revenue is non-gaming-related and it mainly comes from guest rooms, meetings and other entertainment activities.
"Here in China we want to be the destination within the marketplace through our entertainment components."
Mrha, who helped expand Marriott International's reach in Asia between 2002 and 2005, was appointed as senior vice-president and chief financial officer of MGM Hospitality, the company's luxury hotel division, to help operate non-gambling resorts in emerging markets such as India, China and North Africa.
With the company raising its bet on China through aggressive expansion plans of luxury hotels, the hotel veteran was appointed as general manager of the luxury hotel in Sanya, a popular honeymoon destination.
Mrha says the demand for fresh hotel products is driving the company's overseas growth. While Ritz-Carlton, Hilton and other hotel giants have already made their presence in Sanya and other big cities, MGM is an "entertainment, energy and excitement-based destination" that can offer more than just an upscale room experience.
"What a guest is looking for is more than a guest room and a great dining experience," he says.
"We are going to provide them a massive entertainment experience with our night clubs, live concerts and a number of performances such as stilt-walking and bubble shows in the lobby.
"Because entertainment is in our DNA, people who had been in MGM Las Vegas certainly want that experience back home."
For any hotel, the first year is when it finds its feet, but MGM Grand Sanya is making rapid strides. The hotel, which has 675 rooms, 73 suites and six exclusive villas, says it had 70 percent occupancy over the May Day holiday.
"We had more rooms sold compared to other hotels around in the peak days," he says.
With his experience in Marriott International, Mrha knows the Chinese market well. He says it is not so easy to transplant all types of entertainment levels in MGM Las Vegas here, so they have to be localized.
In China, many parents put their children in private schools to learn English, so Mrha plans to market a series of summer holiday packages - around the concept that education can be entertaining - for the second half of this year.
"It's just some English classes for the kids, but it can be done on the beaches, in a restaurant or different locations. At the same time, we are going to have a wine school and cooking classes for parents."
Being eager to tap the increasing demand for luxury travel in China, the entertainment and hospitality giant also plans to open about 10 hotels in Beijing, Shanghai, Chengdu and Hangzhou through a joint-venture between Diaoyutai State Guesthouse and MGM Resorts International over the next three to four years.
Mrha believes the Diaoyutai and MGM combination will carve out a bigger niche in China amid the cut-throat competition in the hotel sector. In China, the Diaoyutai State House is known as a venue for diplomatic activities linked to heads of state as well as senior government officials and celebrities.
"The strong partnership with Diaoyutai is very beneficial in terms of relationship and expertise in the local market, and has brought special insight into local customers' tastes," he says.
The company now has 12 management agreements in place in China, and recently announced that it is developing a 200-room luxury hotel under the Bellagio brand in Shanghai.
The Bellagio Shanghai hotel is due to be completed in 2015 and will be built for the Suning Real Estate Group.
Similarly, MGM Grand Chengdu and the Skylofts under MGM Grand are due to break ground later this year. The move has been described as the company's largest "world-class, mixed-use development project".
Another Chengdu Diaoyutai Hotel will be located in the city's popular tourist destination Broad and Narrow Alley, which has a classy array of Qing Dynasty (1644-1911) residences as its selling point.
Adding to the already impressive line-up is an urban resort bearing the Diaoyutai brand, opening near the Lama Temple in Beijing next year.
Mrha says there has been tremendous growth in China and its strength is not only in the broader economy but also in real estate.
The rise of China's middle management and affluent families is the reason why MGM chose to expand hotels with selected services, he says.
According to a report by Credit Agricole's CLSA, the demand for luxury goods and travel in China is likely to rise by 25 percent, accounting for 44 percent of the world's total, by 2020.
In the meantime, Mrha will be in Sanya and be busy with the management and operations of his hotel. But he is not complaining, especially when he can enjoy the beautiful beach view every day.
"It's hard to call it work when you are doing something that you are really passionate about," he says.
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