The Las Vegas Strip, showing a bit of a recovery in visitation and an 8.2% gain in gaming revenue in October, has one Wall Street analyst expressing optimism and suggesting a marketing push by resorts and the Las Vegas Convention and Visitors Authority might have made a difference.
John DeCree, director of equity research at CBRE, said October got off on a “strong footing” for the Strip, driven primarily by growth in table game volumes and some favorable hold comparisons.
“Overall, it was a solid month for the Las Vegas Strip, with strong growth in slot volume, mass market table drop, and baccarat drop,” DeCree said in a note to investors. “Visitation declines moderated in October, and while still down year-over-year, major hotel metrics such as occupancy and average daily rates showed signs of improvement. We are optimistic that the strong upcoming group and convention calendar will continue to support the improving trend.”
Baccarat win increased 69.4% year-over-year due to favorable hold, but baccarat drop was still up a solid 8.5% versus the prior-year period, DeCree said. Non-baccarat table volume increased 29.6% year-over-year, while win increased 9.9% due to a more challenging hold comparison.
DeCree cited the potential impact of a marketing effort in September by the LVCVA and resorts to offer value to tourists to attract them to the city amid decline of visitation of nearly 8% this year.”
“Although slot win declined 2.4% year-over-year, slot handle was up 3%, marking eight consecutive months of year-over-year slot handle growth,” DeCree said. “It’s difficult to confirm, but we suspect gaming volumes were helped in part by the citywide Fabulous Five Day sale at the end of September.”
DeCree highlighted that October marked the second highest visitation month of the year. Las Vegas received 3.41 million visitors in October, the second highest monthly total of the year, behind 3.42 million in May. While October’s visitation still represented a 4.4% decline from the prior-year period, it was the smallest monthly reduction since January, he noted. “The improving visitation outlook was helped in part by the better convention calendar, with convention attendance up 7.9% year-over-year to 604,000 the highest monthly total since February.”
While Strip hotel occupancy bounced back, it’s still down, as average daily room rates hit their highest level of the year, DeCree said.
Occupancy on the Strip averaged 86% in October, down 180 basis points versus the prior-year period. However, October occupancy was up 500 basis points over the monthly average from June through September and the second highest level of the year next to 87.6% in April. “More encouragingly, Strip average daily rates of $219.56 in October was the highest monthly average of the year, albeit still down 5.5% from October 2024.”
Off the Strip, DeCree said October was uneventful, but cited Buy opportunities for Red Rock Resorts and Boyd Gaming that serve local Las Vegas residents.
Statewide gaming revenue growth of 5% was nearly entirely driven by the strong results on the Strip, with Las Vegas locals gaming revenue up 0.2%, downtown Las Vegas gaming revenue down 0.2%, and Reno gaming revenue up 0.3%. Although Las Vegas locals gaming revenue was essentially flat year-over-year, this was driven entirely by declines on the Boulder Strip (-8.9% year-over-year), while North Las Vegas was up +8.4% and the balance of Clark County was up +3.9%, DeCree said.
“We believe these results reflect favorably for Red Rock Resorts and Boyd Gaming as we expect both operators to outperform the overall market,” DeCree said.
