There’s been a lot of hand wringing going on in Las Vegas given visitation is down 6.5 percent for the year, hotel occupancy is down 1 percent and gaming revenue has fallen year over year for three consecutive months after a strong January.
Passenger traffic at Harry Reid International Airport is down 3.6 percent but there is some good news there. Despite concerns that travel from Canada is down because of a political dispute between the two nations, international traffic is up overall for the year at 2.7 percent.
Analysts have weighed in on Las Vegas expressing both concern and optimism.
Chad Beynon of Macquarie Equity Research talked about how Strip operators Wynn Resorts, Caesars Entertainment and MGM Resorts International, which make up 75 percent of Las Vegas, have seen anemic revenue growth over the last five quarters going back to the first quarter of 2024 and said he expects a 0.4 percent decline in 2025 earnings for the group.
Heading into 2025, we were bullish on gaming given the 2024 under-performance, reasonable 2025 expectations and valuations,” Beynon said. “Five months into the year, gaming continued to under-perform (minus 6 percent versus the S&P 500). While fundamentals have not improved, we do not think it worsened; and given recent data we remain on fundamentals and stocks for the rest of the year.”
Beynon talked about the 6.5 percent decline in visitation, and while gaming revenue has slowed, he cited management teams saying non-gaming revenues continue to flourish.
“With the outlook for group/conventions bookings rising and some major cap expenditure projects now complete, Vegas operators are cautiously optimistic for Strip earnings growth in 2025,” Beynon said.
Convention business took center stage last week in Las Vegas. The Las Vegas Convention and Visitors Authority talked about the Convention Center expansion and renovation project, which will wrap up by the end of 2025.
Some 1 million square feet at the Central Hall is under renovation as part of a $600 million project that also saw the North Hall and South Hall renovated in 2023 and 2024. That’s on top of the $1 billion West Hall Expansion that opened in 2021.
When everything is completed by the time CES hits in January, LVCVA CEO Steve Hill said he expects 2026 to be a fantastic year for the city.
“We think 2026 has a chance to be the best group meeting and trade show year in the history of Las Vegas,” Hill said.
So far through the first four months of 2025, convention attendance is up 1.8 percent citywide for a market that hosted 6 million convention attendees in 2024 of which 1.1 million were at the Convention Center. That’s down from 1.4 million square feet prior to the renovations, and Hill expects that number to grow to 1.9 million with the work completed.
That’s significant because the convention business contributed $16 billion to the Las Vegas economy in 2024. The Convention Center has supported 70,000 jobs in Las Vegas contributing $3.9 billion in wages.
With that, the convention visitors spend about $1,600 per trip, about $400 more than the typical visitors. On top of that, companies are spending money on dinners and events that further adds to the contribution and helps fill 151,000 rooms.
“It’s an important customer and doubly important because most of those folks who are coming here to attend a meeting are doing so in the middle of the week,” Hill said. “If we didn’t have the strength of the meeting industry here Las Vegas couldn’t look like Las Vegas looks like. You have to fill rooms at 85 percent during the week in order to build properties that cost $2 million a room to build. If you have 65 percent occupancy, you would have to diminish the quality and speculator nature of who we are.”
The Convention Center, which hosted 47 shows in 2024, will go from 1.9 million square feet of leasable space to 2.5 million square feet, a 30 percent increase.
“We want to have at least a 30 percent increase in the economic impact and job creation that comes with having these shows,” Hill said. “The meeting industry matters so much for Las Vegas. We employ about 300,000 people directly in the hospitality industry, and the meeting part of that employment is about one-quarter.”
The Convention Center signed 16 new shows in 2024 and in 2026 it’s bringing a solar industry show that will bring 40,000 people to the city.
“Our goal is to go from prior to this renovation of 1.4 to 1.45 million attendees at the Convention Center to 1.9 million,” Hill said. “We need to add that 450,000, and we are well on our way.”
Barry Jonas, an analyst with Truist Securities, said their year-over-year room rate survey for the Strip this summer is trending down in June and July just as it was in May following growth in April.
“While the LVCVA recently cited consumer uncertainty (in their April visitation report), we’re not ready to call anything structural just yet as we could still see improvements given shorter and shorter Vegas booking windows,” Jonas said.
Jonas said the deceleration in room rates potentially shows consumers are worried about the economy.
June data shows rates continuing to trend lower with MGM down 8 percent while Caesars is down 18 percent for the month.
July shows rates aren’t as bad compared to May or June but still down year over year, down 6 percent at MGM and down 3 percent at Caesars.
