Experts ‘cautiously optimistic’ on Vegas’ economy

In recent months, Las Vegas has found itself at a crossroads, facing both challenges and opportunities in its economy. Despite a 6.5 percent decline in visitation, 1 percent lower hotel occupancy, and a three-month downturn in gaming revenue, experts remain “cautiously optimistic” about the city’s economic future. This outlook is largely fueled by burgeoning non-gaming revenues and ongoing developments in the convention sector, which are essential to the city’s identity.

Chad Beynon, an analyst from Macquarie Equity Research, noted that major Strip operators—including Wynn Resorts, Caesars Entertainment, and MGM Resorts—have experienced sluggish revenue growth over the past five quarters. He predicts a modest, 0.4 percent decline in earnings for these companies by 2025. Despite these challenges, Beynon maintains a hopeful perspective, stating that while conditions have not significantly improved, they haven’t worsened either. He emphasized that non-gaming aspects are thriving, suggesting that the future might hold better outcomes.

Particularly, the convention business has taken center stage in Las Vegas lately as renovations at the Las Vegas Convention Center promise to enhance its capabilities. The ongoing expansion of the Convention Center—a $600 million project expected to conclude by the end of 2025—includes significant upgrades to facilities that are crucial for hosting major conventions. With these renovations, which will add more than 600,000 square feet of event space, LVCVA CEO Steve Hill predicts a record year for group meetings and trade shows in 2026.

The outlook is promising: convention attendance has surged by 1.8 percent citywide in the first four months of 2025, while the previous year saw around 6 million attendees contribute a staggering $16 billion to the local economy. The projection for 2026 is even brighter, with expectations that the number of convention attendees could rise from the current 1.4 million to approximately 1.9 million, further solidifying the economic impact the convention sector has on Las Vegas.

The average convention visitor contributes significantly more to the economy than standard tourists, spending about $1,600 per trip, which is $400 more than typical visitors. This elevated spending makes the convention sector particularly valuable, filling approximately 151,000 hotel rooms and sustaining many businesses in the hospitality industry. The LVCVA emphasizes that the health of the convention sector is crucial for keeping weekdays strong, as many meetings and conventions occur mid-week. Filling hotel rooms consistently throughout the week is vital in maintaining the luxurious reputation Las Vegas is known for.

However, not all news from the Strip is positive. Barry Jonas of Truist Securities highlights a concerning trend in room rates, which are decreasing this summer—a stark contrast to earlier spikes. The downward trend in room rates could indicate consumer anxiety about the economy. Notably, room rates at MGM dipped by 8 percent, while Caesars fell by 18 percent in June. Despite this, Jonas refrained from labeling the situation as structurally negative, suggesting that with short booking windows, there might still be opportunities for improvement.

Moreover, the overall airport traffic at Harry Reid International Airport saw a decline of 3.6 percent, though international travel showed encouraging growth at 2.7 percent year-over-year. Analysts remain hopeful that this uptick in international visitors, despite a dip from Canada fueled by political tensions, can counterbalance local declines in visitation.

As the market navigates these fluctuations, the construction projects at the Convention Center are paving the way for recovery and long-term sustainability. The completed expansions will not only increase available space for larger conventions but also further support over 300,000 jobs within Las Vegas’s hospitality sector. Approximately 75,000 of these positions are specifically linked to the convention industry, highlighting its integral role in the city’s economy.

In summary, Las Vegas finds itself in a unique position of adversity coupled with opportunity. While visitation and gaming revenues are down, the resilient convention market shows robust potential, supported by significant investments in infrastructure and facilities. Stakeholders hold a cautious optimism that the city will harness these opportunities to emerge more vital than before. Las Vegas’s commitment to maintaining high standards in hospitality and entertainment, matched with strategic investments in the convention sector, is likely to ensure its position as a premier destination in the years to come.

As the landscape evolves, both travelers and industry experts will be keenly observing how Las Vegas navigates the challenges ahead, and whether it can reclaim its status as an unassailable leader in the global hospitality market.

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