(Detroit Free Press – McClatchy-Tribune Information Services via COMTEX) – The luxurious MGM Grand Detroit is laying off workers just six months after opening its permanent casino, hotel and entertainment complex.
MGM Grand Detroit spokesman Scott Grigg said „under 100“ employees had been laid off starting March 7.
Most of the layoffs were limited to food and beverage operations, though some are tied to the hotel, said Grigg, who declined to give more specifics.
He also said the casino operations, which have reported growing revenue every month, were largely untouched by the layoffs.
Layoffs include a combination of salaried and hourly workers, most of whom were hired in the last six months, Grigg said.
„We fine-tuned staffing levels to meet our business volumes,“ Grigg said.
The Free Press reported in December that bookings for the 400-room MGM Grand Detroit hotel — which charges an average of USD 300 a night — were running below the metro Detroit average of about 55% occupancy.
MGM does not discuss hotel occupancy numbers, Grigg said, but he added, „They’re right on par with what we expected. We are in Detroit.“ MGM will not lower hotel rates, he said.
SaltWater restaurant and some lounges have reduced hours. The Ignite Lounge, for example, was open every night and is now closed Monday and Tuesday.
„We’re not claiming that we’re not doing well, merely that our staffing levels must reflect the business volume at the property as a whole,“ he added.
MGM Grand Detroit hired more than 1,000 additional employees for its permanent complex, which opened to great fanfare in October. It still employs more than 3,000 people.
The USD 800-million property features 1 million square feet of hotel, spa, lounges, nightclubs, gambling areas and celebrity restaurants.
MGM was the first of Detroit’s three casinos to open a permanent complex that includes a hotel.
„The convention hotel business is built two years out,“ Grigg said. „It’s more of a reflection of the economy than anything else, but groups are coming in. Bookings are happening now for next year.“
Greektown spokesman Brian Brown said Greektown did not expect layoffs. That casino’s hotel is expected to open next year.
MotorCity casino spokeswoman Jacci Woods could not be reached for comment. Many of MotorCity casino’s permanent facilities, including the gambling area, hotel and fine-dining restaurant opened this year.
MGM reported casino revenues of USD 47 million for February, the most of the three casinos, and up 27.9% from the same month in 2007.
Casino revenues reported to the gaming control board every month reflect just casino operations and do not include other areas, such as food and beverage, or the hotel.
„We had no way of knowing what our final business volumes would be since no one has opened a property like this before in Detroit,“ Grigg said. „We have a higher cost of operation than we did last year at this time and we have a much larger operation. We have to take in a corresponding greater percentage of revenue.“
Lansing gambling analyst Jacob L. Miklojcik said high vacancy rates affect operations.
„They have pretty high price points for Detroit, about USD 300 or more,“ he said. „If the place is filled, they go and gamble.“
„Any new operation has some filling-out period on the right staffing,“ he added. „It’s not unusual for a casino to have some adjustments before the 90-day period.“
The decision on the layoffs occurred before the March 24 arrival of Lorenzo Creighton, the property’s new chief operating officer, Grigg said. Creighton last served as president and chief operating officer of New York-New York Hotel & Casino in Las Vegas.
Salaried workers will receive severance packages and money for health care, based on tenure.
The UAW, which represents some casino workers, did not return a call for comment.