Strip resort leaders ‘batten down the hatches’ in what they term ‘a soft summer’
Is Las Vegas on the brink of its worst economic downturn since the Great Recession? Gaming industry leaders and observers said the economy and travel issues have exacerbated a summer slump. But they also point toward increased group visitation that is expected to rebound in the fall and the first part of 2026.
Despite assurances from top executives of Las Vegas' two largest resort companies, gaming and tourism indicators from the first half of 2025 are showing a downward trend that is expected to continue when results from July are released next week.
The CEOs of MGM Resorts International and Caesars Entertainment, which operate a combined 18 Strip properties, reassured a skittish investment community that the Strip is on solid ground during quarterly conference calls with the investment community.
“We've battened down the hatches in Vegas for a soft summer,” Caesars CEO Tom Reeg said on July 29. A day later, MGM Resorts CEO Bill Hornbuckle said Las Vegas was "fundamentally solid.”
Hornbuckle blamed an ongoing room remodel at the 5,000-room MGM Grand Las Vegas, which he said accounted for 80 percent of the company’s overall three-month Strip decline of 4 percent to $2.1 billion in revenue. Similarly, Caesars said its eight Strip properties experienced a nearly 4 percent revenue decline to just above $1 billion
However, the overall six-month decline in gaming revenue, visitation, airline passengers and other key measuring tools used to gauge the tourism industry has led to national and international headlines that Las Vegas is the canary in the coal mine foretelling economic doom.
Truist Securities gaming analyst Barry Jonas wrote in a June 13 research note that the Strip was headed toward a “choppy summer,” given general malaise toward the economy, travel issues in the U.S. and a “tough comparison” to 2024’s overall results.
“[Resort] operators see a softer summer driven by weak convention business and summer seasonality,” Jonas wrote, adding that none of the gaming operators blamed impending declines on consumer weakness.
That prediction has borne out.
Across the first six months of 2025, there have been decreases in six key metrics that measure the health of Las Vegas’ tourism industry compared with the same period in 2024, which saw an influx in travel to Sin City because of Super Bowl LVIII.
Perhaps most notably, Las Vegas visitor volume was down more than 7 percent, according to the Las Vegas Convention and Visitors Authority.
But the comparisons to 2023 are less bleak. International travel to Las Vegas is up 17 percent this year so far compared with the same period two years ago, while gaming revenue is also up slightly. Domestic travel and total visitors, though, remain down.
Numbers and Context
Strip gaming revenue is heavily reliant on high-end baccarat, which can easily influence the overall total, especially during major events. In June, baccarat revenue was down more than 8 percent because the hold percentage — what casinos won from customers — declined almost 1 percent from a year ago.
Two recent events in August will hamper passenger totals at Harry Reid International Airport heading into the fall. A strike by Air Canada’s flight attendants’ union grounded the airline’s service in the U.S., but a tentative settlement was reached Tuesday. At Reid, Canadian passenger volume is already down more than 30 percent from Canada’s three major airlines.
Also, Spirit Airlines, Reid’s second-largest air carrier behind Southwest, warned the airline industry it might not be able to survive even after emerging from bankruptcy five months ago. It’s listed as a “going concern.” Spirit’s passenger volume is down 27 percent.
Strip visitor volume, which is compiled monthly by the Las Vegas Convention and Visitors Authority using resort operators’ numbers, was down more than 11 percent in June and may see a similar drop in July. Convention attendance, due to shows moving to other locations or taking a year off, fell 10.7 percent during the month. However, convention attendance is up 1.5 percent through June.
There are more than 150,000 hotel rooms in Las Vegas. The closure of The Mirage and the implosion of the Tropicana took more than 3,000 hotel rooms out of the market in 2024. In June, rooms averaged $174.31 a night, down almost 7 percent from a year ago. Through six months, Strip hotel room rates averaged $197.98 a night, down 5 percent from 2024, which included Super Bowl week in February, which drove rates up to an average of $269.37 a night.
Revenue per available room (RevPar) is a metric used by the investment community to gauge profitability. It measures all revenue associated with a Strip hotel room, including gambling expenses and non-gaming spending such as the cost of the room, dining out, entertainment and shopping. Analysts have often said the non-gaming spending in Las Vegas is more important because it is often higher than the gaming totals.
Repeal of unpopular gaming tax may wait until next year
Rep. Dina Titus (D-NV) said she would love Congress to reverse an unpopular tax code — a change sought by gamblers and the casino industry — before the end of the year. But she admitted during a town hall meeting in Las Vegas last week that the repeal might have to wait.
“We're looking at the appropriations process that'll be this fall,” Titus said. “The bill that comes at the end of the session is the extenders bill. That's a possibility. I'm not gonna be too discouraged if we wait, because we have a year to go. But the sooner you can get it done, the better.”
Titus’ legislation has gained bipartisan support and would restore the 100 percent tax deduction for gambling losses that gamblers support. An amendment tucked into July’s more than 1,000-page budget legislation limited the amount gamblers can deduct from their winnings from 100 percent to 90 percent of their losses.
Following a House Ways and Means Committee Field Hearing in Las Vegas last month, Chairman Jason Smith (R-MO) committed to restoring the 100 percent deduction.
“He sat down with some of the big gaming CEOs, and I guess they were convincing,” Titus said. “I don't know that he wants to kill it, but I'm not sure he'll stand in the way. So that's a plus.”
LVCVA spends $20M to sponsor F1 through 2027
The Las Vegas Convention and Visitors Authority (LVCVA) board approved a $20 million extension of the tourism agency’s sponsorship of the Formula One Las Vegas Grand Prix through 2027. The two-year commitment — $10 million per year — replaces the current three-year agreement that expires after November’s race.
In a presentation, Las Vegas-based economic advisory firm Applied Analysis told the board that F1 had an estimated $1.5 billion economic impact on the community in 2023, with an estimated $934 million in economic impact last year.
Meanwhile, to kick off the 100-day countdown to this year’s race, Las Vegas Grand Prix officials handed out $100,000 that was shared by five Las Vegas-area nonprofit organizations. Nevada Society for the Prevention of Cruelty to Animals, SHARE Village Las Vegas, Three Square, Mondays Dark/The Space 2.0 and Communities in Schools of Nevada each received $20,000 from race organizers.
What I'm reading
💲 Wynn Resorts and Caesars Entertainment win legal victory on the use of dynamic pricing — Clark Schultz, Seeking Alpha
The suit alleged Strip operators violated antitrust laws by coordinating to raise hotel room rates through shared revenue management software platforms.
🧹The much-hyped new Wizard of Oz is an atrocity — Sam Adams, Slate
The immersive presentation at the Las Vegas Sphere includes flames, gusts of wind and inflatable flying monkeys piloted by drones.
News, notes and quotes
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