Las Vegas tourism decline narrative continues as resorts’ costs make headlines — CDC Gaming

The decline in Las Vegas tourism this summer season has garnered worldwide headlines and can solely speed up after final week when June’s visitation report confirmed sharp drops within the variety of guests and resort occupancy.

That solely accentuates the notion, additionally the topic of a lot media consideration, that Las Vegas is overpriced as an enormous a part of the explanation for the decline. Longtime Las Vegas observers, nonetheless, consider that the downturn is extra a mirrored image of shopper confidence and other people’s monetary state of affairs. Those potential guests most impacted are staying nearer to dwelling quite than touring.

Las Vegas visitation fell 11.3% in June from June 2024, and is down 7.3% for the yr. Hotel occupancy fell to 78.7% in June, down from 85.2% a yr in the past.

“If you have less discretionary income you’re not going to take that trip to Las Vegas,” stated on line casino guide Oliver Lovat, CEO of the Denstone Group. “Vegas relies on that. The only factor that correlates with Las Vegas visitation is consumer confidence, and that’s down. When consumer confidence goes up, visitation will go up again. I don’t think anyone should panic that only 19.5 million people have visited Las Vegas in the first six months of the year compared to the 21 million last year. It may be a drop in visitation, but it’s still strong historically. So let’s not overreact.”

Industry consensus is that Las Vegas will bounce again quickly sufficient with a heavy occasion calendar and anticipated robust conference enterprise later this fall and into 2026. That was the message from MGM Resorts International and Caesars Entertainment executives in reporting their second quarter earnings that noticed dips in Las Vegas affecting the businesses’ backside strains.

MGM CEO Bill Hornbuckle stated historical past offers him confidence in a rebound, and that bookings have elevated after a nine-week decline beginning in May.

Steve Hill, CEO of the Las Vegas Convention and Visitors Authority, stated the highest of the market in Las Vegas isn’t having any problem. People’s considerations about jobs and their monetary state of affairs is inflicting many potential guests to hesitate for now, he stated.

“We are not seeing any problem at the top of the market,” Hill stated. “I don’t know how deep that goes but it’s probably the top third. There are some concerns in the middle third and some action on the part of the customers… The drop in visitation is at the lower end of the financial spectrum. If you look at occupancy, for example, and between the higher-end properties on the Strip, they are still way into the 90s% (in occupancy) and it’s down in the spectrum and off the Strip they have been in the 70s% and so we’ve haven’t seen it in the city’s numbers until recently.”

Hill stated the tourism company’s promoting message to shoppers is that Las Vegas presents one thing at each worth level: “You can come here on any budget and have a great time.”

While Las Vegas is dear, guide Lovat provides, different elements are at work contributing to this yr’s downturn. The financial system and the present geopolitical state of affairs are principally out of Las Vegas’s management.

“There’s the reticence of Canadians to come to the U.S.,” Lovat stated of worldwide air passenger numbers down almost 10% to Las Vegas in June. “There’s a perception of the U.S. as less friendly to international tourists than it was 12 months ago. There’s a lot of global instability at the moment, and that has to factor into the visitation numbers.”

Jan Freitag, nationwide director of hospitality analytics for the CoStar Group that tracks journey throughout the nation, stated the shortage of worldwide guests has harm Las Vegas as a result of these guests have a tendency to remain longer and pay larger room charges. As for the the U.S. financial system and home journey, with inflation and lots of now having to begin repaying scholar loans, discretionary spending is affected, he famous.

“Consumers aren’t feeling confident and that doesn’t bode well for the remainder of 2025,” Freitag stated. “Las Vegas is a market where people use their discretionary income. The U.S. hotel industry isn’t doing great and occupancy is down for the first six months of the year. Looking ahead, we’re not sure international travel is going to change. You see warnings from the UK and Germany, and Canadians have stayed home a lot more. It will be interesting when winter comes to Canada. Will the U.S. be a flyover country for snowbirds who go to Mexico and the Caribbean instead?”

Caesars Entertainment CEO Tom Reeg stated Las Vegas began leaking as a market in June and expects the third quarter to stay gentle. He stated that can change within the fourth quarter and first half of 2026 primarily based on robust superior bookings.

“We think this is a temporary phenomenon for Vegas but make no mistake – the summer is soft in Vegas,” Reeg stated. “I would expect something in the third quarter that looks like the second quarter on a comparative basis.”

Lovat agreed that prospects are brilliant for Las Vegas within the months forward with a robust occasion calendar of musical acts that features Paul McCartney, New Kids on the Block, Backstreet Boys and others. Wrestlemania will return in 2026, and the World Cup held within the U.S. subsequent summer season will convey guests to Las Vegas. F1 returns in November.

“There are a lot of international visitors saving up to come to the U.S. for the World Cup next summer,” Lovat stated. “I am less alarmist about the figures than other people are. Vegas still provides a huge range of entertainment and programming. The value proposition is as strong as anywhere else in the world.”

Lovat stated a few of what’s occurring needs to be seen as Las Vegas altering. Some 15 to twenty years in the past it was about getting occupancy ranges excessive and promoting as many rooms as potential. Many resorts at present are key metrics equivalent to being keen to function with decrease occupancy with the precise individuals within the constructing.

“It’s about people who will spend on gaming or non-gaming,” Lovat stated. “Granted visitation was down 11% in June but gaming revenue was up in the same month with less people,” Lovat stated.

Swissman stated the basics of the business are “still ok. They’re not great or we would be talking about them up year-over-year for June, but I don’t think it’s anything to panic about yet.” When factoring in considerations in regards to the financial system and drop in worldwide visitation, notably from Canada, that may exacerbate what’s occurring he stated.

“The biggest indicator you can look at as to how far this softness exists is to look at the convention schedule and room bookings,” Swissman stated. “Both of those look to be solid in the fourth quarter and into the future. That’s supported by what you’re hearing from MGM and Caesars and others in their earnings reports.”