The Strip’s weekend hotel-room occupancy has already recovered from the COVID-19 pandemic and the opening of Resorts World Las Vegas on June 24th is expected to put an exclamation point on it, according to a Wall Street analyst.
Excitement is growing about the debut of Malaysia-based Genting Group’s $4.3 billion resort on the site of the former Stardust, which was demolished in 2007 by previous owner Boyd Gaming. It’s expected to continue the transformation of the north end of the Strip and bring more visitors and development to the corridor.
“I think Resorts World’s opening continues to highlight the rebirth of the Las Vegas Strip,” said Brendan Bussmann, a partner with Global Market Advisors. “It shows its versatility and ability to adapt in times of crisis and make itself better down the road.”
Las Vegas has a long history of property openings spurring additional visitation and this time will be no different, analysts said. After the pain inflicted on Las Vegas tourism by COVID-19, it’s a tremendous boost at the right time.
“We need as many reasons as possible to tell people to come to Las Vegas,” said Josh Swissman, founder of The Strategy Organization. “I think this is going to be a big, bright, and shiny reason that will drive people to come to Las Vegas, particularly in the summer, but also throughout the rest of this year.”
The timing couldn’t be better for the much-anticipated opening, the first on the Strip since The Cosmopolitan in December 2010, and it comes a month after properties across Las Vegas did away with customer mask mandates and returned to 100% capacity, following the winter months at 25%.
“We would have all questioned the timing a year ago and now, given the reopening and effectiveness of vaccines, it appears very well timed,” said Barry Jonas, an analyst with Truist Securities. “The leisure demand and pent-up demand that we’re seeing should play in nicely with this opening.”
In April, Las Vegas hosted 2.57 million visitors in April, well below the 3.54 million in April 2019, but the most since Las Vegas casinos reopened in June 2020. Weekend occupancy in April was 83.5%; that percentage is trending up and expected to be in the 90s during the summer months, Jonas said.
“From a leisure-traveler standpoint, it’s an exciting time and you can make the argument we are already there (recovered),” said Jonas, who added that even with Resorts World entering the market next week, there’s more than enough business for other resorts on the weekends. “From a competitive standpoint, there’s less concern about cannibalization on the weekends, given the floodgates starting to open. But midweek, Resorts World is probably going to impact some of the existing hotel-casino supply to some degree.”
Midweek occupancy was 58% in April, down from 89% in April 2019. The drop can be attributed in large part to the lack of convention visitors, who numbered 529,500 in April 2019, but none in April 2021. The large-scale convention business returned earlier this month with the World of Concrete, which had historically brought 60,000 people to Las Vegas. This year’s number hasn’t been released, but it was expected to be lower, Jonas said.
The opening of Resorts World won’t address Las Vegas midweek occupancy issues, a problem that won’t be overcome until conventions return in full force in the fall, then in greater numbers in 2022, Jonas said. The property was also expected to generate international visitors, but COVID-19 has curtailed travel from abroad, with only 31,000 foreign passengers transiting McCarran International Airport in April, compared to 322,000 in April 2019. When international travel restrictions are lifted, Resorts World is expected to draw from the customer base that frequents its properties in Malaysia and Singapore.
Until then, the task of filling Resorts World’s 3,500 rooms will be aided by Hilton and its ultra-luxury brand Crockfords. The 130 million people in the Hilton Honors program will help drive visitors to the property, Jonas said.
Besides the additional visitors Resorts World will bring to Las Vegas, expectations are high about what it will mean to the north end of the Strip. There hasn’t been this much excitement in that corridor since the opening of Encore, the second phase of Wynn Las Vegas, in 2008. The Fontainebleau Las Vegas project across the Strip from Resorts World, has been stalled for 13 years; though it’s now under new ownership, no revised plans have been announced.
“It puts down an anchor and extends the Strip,” Bussmann said of Resorts World. “Most people think there’s a void between the Wynn and the Sahara, but with the Las Vegas Convention Center (expansion) reaching farther west, Resorts World definitely puts in another stake to draw people farther north and bodes well for further redevelopment that includes the Fontainebleau, the sale of (resort-zoned) land in front of the Convention Center, and the Wynn West (site) on the other side of the Strip on the New Frontier site.”
Swissman said Resorts World will “do wonders to bring more energy to the north end of the Strip.” The corridor has gone through so many starts and stops and changes over the years that it hasn’t “come close to getting over the finish line,” he said.
“This is important for that particular part of the Strip, and I would suspect over the years to come you will see a knock-on effort of Resorts World,” Swissman said. “Some of the other properties on the north end of the Strip will become more valuable and ultimately, potentially over time, be home to new and additional development.”