The decline in Las Vegas tourism this summer has garnered international headlines and will only accelerate after last week when June’s visitation report showed sharp drops in the number of visitors and hotel occupancy.
That only accentuates the notion, also the subject of much media attention, that Las Vegas is overpriced as a big part of the reason for the decline. Longtime Las Vegas observers, however, believe that the downturn is more a reflection of consumer confidence and people’s financial situation. Those potential visitors most impacted are staying closer to home rather than traveling.
Las Vegas visitation fell 11.3% in June from June 2024, and is down 7.3% for the year. Hotel occupancy fell to 78.7% in June, down from 85.2% a year ago.
“If you have less discretionary income you’re not going to take that trip to Las Vegas,” said casino consultant Oliver Lovat, CEO of the Denstone Group. “Vegas relies on that. The only factor that correlates with Las Vegas visitation is consumer confidence, and that’s down. When consumer confidence goes up, visitation will go up again. I don’t think anyone should panic that only 19.5 million people have visited Las Vegas in the first six months of the year compared to the 21 million last year. It may be a drop in visitation, but it’s still strong historically. So let’s not overreact.”
Industry consensus is that Las Vegas will bounce back soon enough with a heavy event calendar and expected strong convention business later this fall and into 2026. That was the message from MGM Resorts International and Caesars Entertainment executives in reporting their second quarter earnings that saw dips in Las Vegas affecting the companies’ bottom lines.
MGM CEO Bill Hornbuckle said history gives him confidence in a rebound, and that bookings have increased after a nine-week decline starting in May.
Steve Hill, CEO of the Las Vegas Convention and Visitors Authority, said the top of the market in Las Vegas is not having any difficulty. People’s concerns about jobs and their financial situation is causing many potential visitors to hesitate for now, he said.
“We are not seeing any problem at the top of the market,” Hill said. “I don’t know how deep that goes but it’s probably the top third. There are some concerns in the middle third and some action on the part of the customers… The drop in visitation is at the lower end of the financial spectrum. If you look at occupancy, for example, and between the higher-end properties on the Strip, they are still way into the 90s% (in occupancy) and it’s down in the spectrum and off the Strip they have been in the 70s% and so we’ve haven’t seen it in the city’s numbers until recently.”
Hill said the tourism agency’s advertising message to consumers is that Las Vegas offers something at every price point: “You can come here on any budget and have a great time.”
While Las Vegas is expensive, consultant Lovat adds, other factors are at work contributing to this year’s downturn. The economy and the current geopolitical situation are mostly out of Las Vegas’s control.
“There’s the reticence of Canadians to come to the U.S.,” Lovat said of international air passenger numbers down nearly 10% to Las Vegas in June. “There’s a perception of the U.S. as less friendly to international tourists than it was 12 months ago. There’s a lot of global instability at the moment, and that has to factor into the visitation numbers.”
Jan Freitag, national director of hospitality analytics for the CoStar Group that tracks travel across the country, said the lack of international visitors has hurt Las Vegas because those visitors tend to stay longer and pay higher room rates. As for the the U.S. economy and domestic travel, with inflation and many now having to start repaying student loans, discretionary spending is affected, he noted.
“Consumers aren’t feeling confident and that doesn’t bode well for the remainder of 2025,” Freitag said. “Las Vegas is a market where people use their discretionary income. The U.S. hotel industry isn’t doing great and occupancy is down for the first six months of the year. Looking ahead, we’re not sure international travel is going to change. You see warnings from the UK and Germany, and Canadians have stayed home a lot more. It will be interesting when winter comes to Canada. Will the U.S. be a flyover country for snowbirds who go to Mexico and the Caribbean instead?”
Caesars Entertainment CEO Tom Reeg said Las Vegas started leaking as a market in June and expects the third quarter to remain soft. He said that will change in the fourth quarter and first half of 2026 based on strong advanced bookings.
“We think this is a temporary phenomenon for Vegas but make no mistake – the summer is soft in Vegas,” Reeg said. “I would expect something in the third quarter that looks like the second quarter on a comparative basis.”
Lovat agreed that prospects are bright for Las Vegas in the months ahead with a strong event calendar of musical acts that includes Paul McCartney, New Kids on the Block, Backstreet Boys and others. Wrestlemania will return in 2026, and the World Cup held in the U.S. next summer will bring visitors to Las Vegas. F1 returns in November.
“There are a lot of international visitors saving up to come to the U.S. for the World Cup next summer,” Lovat said. “I am less alarmist about the figures than other people are. Vegas still provides a huge range of entertainment and programming. The value proposition is as strong as anywhere else in the world.”
Lovat said some of what’s happening has to be viewed as Las Vegas changing. Some 15 to 20 years ago it was about getting occupancy levels high and selling as many rooms as possible. Many resorts today are looking at key metrics such as being willing to operate with lower occupancy with the right people in the building.
“It’s about people who will spend on gaming or non-gaming,” Lovat said. “Granted visitation was down 11% in June but gaming revenue was up in the same month with less people,” Lovat said.
Swissman said the fundamentals of the industry are “still ok. They’re not great or we would be talking about them up year-over-year for June, but I don’t think it’s anything to panic about yet.” When factoring in concerns about the economy and drop in international visitation, particularly from Canada, that can exacerbate what’s happening he said.
“The biggest indicator you can look at as to how far this softness exists is to look at the convention schedule and room bookings,” Swissman said. “Both of those look to be solid in the fourth quarter and into the future. That’s supported by what you’re hearing from MGM and Caesars and others in their earnings reports.”
