The head of Las Vegas’ tourism agency said he expects to see further declines in visitation this summer as consumers weigh their finances as a new report shows steep declines in hotel occupancy and daily room rates in July.
Steve Hill, CEO of the Las Vegas Convention and Visitors Authority, spoke Wednesday to commercial real estate executives of the CCIM Southern Nevada at the Orleans Hotel & Casino. He gave his most extensive comments about the decline in tourism that has generated national and international headlines about whether the city is overpriced. Visitation is down 6.5% for the year or about 1.15 million people through May.
Co-Star reported this week that of the top 25 markets, Las Vegas had the second-largest drop in hotel occupancy behind Houston. During the week of July 13-19, occupancy fell 11.9% to 74.3% while revenue per available room fell 17.1% to $142.62. CoStar reported June occupancy dropping 14.6% – the biggest year-over-year decline in 2025.
“The last couple of months haven’t been quite as good and things are down a little bit as everybody knows,” Hill said to start off his commentary.
When the LVCVA releases its June numbers, Hill said to expect visitation to be down even more year-over-year and revenue per room, which has been down 6.1% for the year, to see further erosion.
“Visitation is down about 7ish% and ADR (average daily room rates) are also down and revenue per room is down 14%,” Hill said. “That’s the largest drop we’ve seen year-over-year, month-over–month this century other than in a crisis (such as Sept. 11th terrorist attacks, the pandemic and Great Recession). The top of the market is still doing fine and not having any difficulty, but folks around the country are concerned about their jobs and their financial situation causing them to hesitate.”
Hill told the audience they are starting to see a response from most of the casino properties that target a more “price-sensitive audience or consumer.” He cited a newspaper headline Wednesday in the Las Vegas Review-Journal showing how the Sahara has eliminated resort fees for the summer.
“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. Where the 7% drop in visitation is at the lower end of the financial spectrum. The properties that target that are probably going to start responding more frequently than they have.”
Hill said that the Las Vegas numbers over the past 12 to 18 months have been “somewhat masked” because the top end of the market has done so well. It has gone up so much where there’s no resistance at that level, he added.
“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. But as the bottom of the market has suffered a little more, you will start to see the numbers happen that affect the entire city and you’ll start to see some of the properties that have six, eight or nine hotel resorts manage them differently depending on who their target audience is.”
At the LVCVA, Hill said the tourism agency is concentrating on a message to consumers of having an offering for every budget, saying “you can come here on any budget and have a great time.”
The agency’s marketing has focused on interacting with people who are searching travel sites and getting a flash about coming to Las Vegas. Hill called it an “efficient” way to market and in June generated 300,000 visitors from doing that.
“Our job is to drive demand to the extent it exceeds supply,” Hill said. “The health of Las Vegas as a community and job market is partially predicated on the healthy growth of the tourism industry, and we have been flat. It is exceptionally difficult now to make a major integrated resort pencil right now. It’s going to be $2 million a key to be competitive in Las Vegas and with interest rates that hardly makes sense. We feel responsible to drive demand to cause construction.”
Hill pointed out the Hard Rock resort under construction at the former Mirage site has been the exception. The property, which is scheduled to open in 2027, has cited a price of $4 billion to $5 billion. He said one of his concerns is the deployment of capital in the city.
“The people at the headquarters here at Caesars, MGM and Boyd Gaming may see an opportunity for a better return on investment on a market that has more opportunities and not as much competition, but that leaves it open for someone to make an investment here,” Hill said.
Las Vegas visitation hasn’t completely recovered from the COVID pandemic, Hill said. Las Vegas had 88.5% in 2019 to lead the nation, and today it still leads the nation as it has fallen back into the 85% range.
“A part of that was a decision by our hotel partners who thought it was better from a customer-service standpoint to have a little less occupancy, and it was also better financially for them to raise average daily rates,” Hill said. “That’s worked really well. If you look back at our average daily rates and scale back from 2019, we’re up 32% from that. We were almost exactly the national average in 2019, and today the national average is 22%. I don’t know if average daily rates are what is causing concern for some customers, but we have taken the opportunity to maximize ADR and not visitation.”
Hill said that despite the slowdown Las Vegas is well positioned going forward, especially starting in September with the Canelo Alvarez and Terence Crawford fight at Allegiant Stadium on September 13. The Raiders host the Los Angeles Chargers on Monday Night Football to close out the weekend.
“There’s no event that creates the energy that boxing does,” Hill said. “That weekend is going to be huge.”
Hill dismissed any suggestion that the proliferation of gaming across the country and igaming has had an effect on Las Vegas. He said the city doesn’t see other locations as competition but instead are a predecessor of someone aspiring to come to Las Vegas, which he called the “pinnacle” for that visitor.
“There is no place that provides the escape and opportunity for celebration with the intensity that Las Vegas does,” Hill said. “What you can do in three days here you can’t do the same way elsewhere. For the most part, the proliferation of gaming has been helpful for Las Vegas and on the sports scene it has for sure.”
Hill said hosting the Super Bowl in 2024 helped “put us on the map” and that doing so 14 weeks after hosting its first Formula One race “made a statement for everyone else who puts on events that Las Vegas has the ability to do those two things close together, and no other city can do that.”
Hill said the F1 race works on the weekend before Thanksgiving because it’s one of the slowest weeks of the year. The contract with F1 prevents it from being held any other week and that it would never be held in the middle of July with the extreme heat.
“If we couldn’t have that weekend, I’m not sure we would have the race within their schedule because it wouldn’t make sense that we could do it,” Hill said.
