A Wall Street analyst was surprised at the strong showing of Las Vegas Strip gaming revenue in July, given that the city reported its worst visitation for the month since 2002. Another noted that “Vegas softness” continued in August, with occupancy and room rates in decline year over year.
According to Daniel Politzer of J.P. Morgan, the 5.6% revenue increase over July 2024 was due to higher baccarat hold this year. When removing baccarat from the equation, Strip revenue fell 1.7%.
“This 1.7% year over year is likely better than expected, especially given visitation trends,” Politzer said. “July slot handle was surprisingly strong at +5% year over year, while table drop was -4.1% year over year and down 0.9% year over year excluding baccarat.”
Slot revenue was 2% higher, while table revenue was 10.5% higher than July 2024. Excluding baccarat, table revenue fell 8.9%, which Politzer referred to as a “major swing.”
Politzer attributed locals casino revenue falling 1.5%, with slot handle up 5%, to a two-day unfavorable calendar versus 2024.
As for visitation, Politzer said that the 3.1 million tourists fell 12%, despite convention attendance up 10.7%.
“It’s the lowest level of July visitation since 2002 (excluding 2020), marking the seventh consecutive year- over-year visitation decline,” Politzer said. “Year to date, visitation is now tracking down 8%, with recent months broadly negative (June -11.3%, May -6.5%, April -5.1%, March -7.8%, February -11.9% on the Superbowl comparison, and January -1.1%).”
Barry Jonas, an analyst with Truist Securities, said given the latest numbers from Las Vegas and its room survey, investor expectations for the third quarter results are “modest,” while the bigger question is whether an “inflection” hits the fourth quarter.
Jonas highlighted July room rates falling 3%, with revenue per room down 12%. Weekend occupancy was down 4%, midweek 9%. Available room inventory fell 2% with total occupied room nights down 11%.
Revenue per room, average daily rates trended down 8% and 5%, respectively, in August as “Vegas softness” continues into the third quarter. Occupancy is tracking down 4% in August, he said.