The glittering hotel/casinos on the Las Vegas Strip will continue to see reduced customer traffic through the year 2024, in large part because of the city’s reliance on visitors who travel by air.
That was the conclusion of a new study from Fitch Ratings, which noted air capacity into Las Vegas is approximately 60% of normal levels, while visitor numbers are even less than that. With many conferences and conventions cancelled or postponed, the firm does not expect a quick bounceback.
“The Strip’s reliance on inbound visitation, air capacity, and conventions will result in a slower recovery through 2024,” the study’s authors wrote.
Fitch noted the falloff in gaming revenue since casinos reopened on June 4 after nearly three months of a state government-mandated lockdown has been “less severe,” but with approximately two-thirds of the Strip’s revenues coming from non-gaming sources, those will require a rebound in tourism and conventions.
“Recent easing of group restrictions is a positive, but Fitch Ratings does not envision a material increase in convention attendance or broader air capacity until a health solution is present.”
In contrast to the megaresorts on the Strip, Fitch said smaller, regional casinos have rebounded since re-openings started in May. In August, regional gaming revenues were down 16% year-over-year, excluding New York, and Fitch is assuming a 10% decline in 2021 relative to 2019.
Regional casino operators reported “significant” margin expansions after their re-openings due to lower promotional and amenity expenses, the study continued. “However, we expect margins to normalize as the recovery progresses. New Jersey and Pennsylvania online gaming revenues remain at elevated levels subsequent to re-openings, suggesting some land-based gaming may have permanently migrated to online.”
Earlier this week, Wynn Resorts said it would close its Encore property at noon Monday and reopen at 2 pm Thursday due to low demand.