As the Las Vegas resort industry awaits the full return of its convention and meeting business, one gaming analyst said high-profile events tied to the National Football League will boost Southern Nevada visitation in the first half of the year, despite the recent national spike in COVID-19 cases.

Daniel Politzer, who follows the gaming industry for Wells Fargo Bank, had an opposing view from another analyst who believes the Strip’s gaming market will decline in 2022.  Politzer said gaming and non-gaming revenues produced by Strip resort operators with multiple properties, such as MGM Resorts International and Caesars Entertainment, could jump as much as 20 percent over 2021 – a year that already portends to be a record-setting.

“We see the Las Vegas Strip offering the most tangible opportunity for top-line growth in gaming,” Politzer wrote in his report that was published Friday. He said MGM Resorts, Caesars and Boyd Gaming Corp. are in the best position to benefit from a potential market boom.

He said a “linear recovery” could be challenging given ongoing concerns surrounding COVID-19 and the Omicron variant, but the demand for hotel rooms from tour and travel customers and an expanding convention market would boost the Strip’s financial picture heading into 2023 and beyond.

“Leisure-oriented citywide events … should bridge to a gradual return of group and convention business,” Politzer wrote.

Consequently, he told investors the Strip would fare better than most regional gaming states that will be challenged by new competition and elevated spending levels, promotions to attract customers and labor costs.

Politzer’s predictions come as Strip casinos and the overall Nevada gaming market are setting record revenue totals through 2021’s first 11 months. December’s numbers are expected to be released at the end of January.

Following 2020, when the pandemic sent the state’s gaming revenue numbers to their lowest totals since the 1990s, Strip resorts are already 7.2 percent ahead of the nation’s largest gaming market’s 2019 total of $6.58 billion.

Statewide, Nevada casinos have already recorded through November their third-highest gaming revenue year, $12.3 billion.

Politzer’s opinion differed from Deutsche Bank gaming analyst Carlo Santarelli, who said in a December research report that 2022 gaming revenues both in Las Vegas and regionally could show a decline from last year.

“The 2021 recovery in Las Vegas Strip gaming revenue surpassed even the most bullish predictions, driven primarily by a consolidation of travel domestically and elevated spending levels,” Santarelli wrote.

Brendan Bussmann, a partner in gaming industry consultant Global Market Advisors, said two other factors will play a part in 2022. He said a continued Las Vegas recovery is predicated on the return of international visitation and a continued boost in tour and travel business.

International flights into Harry Reid International Airport, which only saw direct flights from Canada and Mexico for the last half of 2021, returned in November with nonstop service to and from London. Additional international flights were added in December from Amsterdam by KLM and Latin America by way of Copa’s hub in Panama City.

“While both will take some time based off of current pandemic trends, they are the two tranches that still have significant recovery,” Bussmann, who is not a financial analyst, said in an email. “This will be balanced with a slow down as the consumer faces headwinds with economic as well as other options once the world opens up again.”

Events will draw crowds and gamblers

Politzer cited the NFL Pro Bowl game at Allegiant Stadium, the National Hockey League All-Star game at T-Mobile Arena and events associated with the two games as catalysts for increased visitation that will boost occupancy at Strip resorts.

In April, the three-day NFL Draft is expected to offer a similar boost. The event, which had been planned for April 2020 but canceled due to COVID-19, will utilize several venues along the Strip.

Bussmann agreed, commenting that weekends when the Las Vegas Raiders had home games helped raise average daily room rates on the Strip.

“One of the other keys to long-term Las Vegas recovery is looking for new tranches of revenue,” Bussmann said. “Sports and other large events have started to help fill those needs for longer-term growth.  

Politzer said airline capacity for flights in and out of Reid Airport for the first quarter of 2022 is tracking 2 percent above 2019’s first-quarter total. That indicates the airlines are anticipating a visitation increase, he added.

“We note that in the second half of 2021, Las Vegas flight passenger traffic began to tick higher,” Politzer said, noting November’s nearly 4 million passengers was just 4.4 percent below pre-pandemic November 2019’s total.

Convention business picking up

Following discussions with representatives from three different Strip resort operators, Politzer also said convention and meeting business, the key accelerator for midweek hotel occupancy, could see a jump in activity in the second half of this year as previously canceled events return to the calendar.

He said MGM Resorts expects a full convention recovery will take place later this year.

“Group night bookings (for MGM) appear healthy not only for 2022 but even looking into 2023 and 2024,” Politzer wrote.

He said Wynn Resorts is pacing “well above 2019 levels” thanks to its newly expanded convention facilities. Caesars’ group and convention bookings for the second half of 2021 were pacing 18 percent above the second half of 2019, with 2022 group business running 15 percent above 2019.

“Resort operator commentary has been encouraging,” Politzer said.

COVID-19 decimated the Las Vegas convention industry.

Following 2019, when the Las Vegas Convention and Visitors Authority (LVCVA) reported more than 6.6 million convention and trade show visitors, 2020 saw 1.7 million, which included zero convention attendees for the last nine months of the year. Just a handful of shows came to Las Vegas in 2021.

For the first three months of 2022, Politzer said there are nearly two dozen events on the books that attract upward of 750,000 visitors, giving hotel room occupancy a boost.

The LVCVA said hotel occupancy through November was 66.3 percent, which includes 86 percent hotel occupancy on weekends.

Politzer broke down the numbers, estimating the average Las Vegas Strip occupancy was roughly 79 percent during the last half of 2021, versus 57 percent in the half of the year. He said the lowest occupancy levels were during the middle of the week. But that could change.

“As the pandemic looks to be becoming more endemic, we see group and convention business gradually returning as people become more comfortable participating in large gatherings, which should set up Las Vegas for year over year industry revenue growth in 2022,” he wrote in the report.