While tourist travel to Las Vegas has steadily declined recently, Circa Sports' owner and founder isn’t concerned about the drop in foot travel.
Derek Stevens said Sin City's downfall is "exaggerated," and the long-term outlook is still positive despite several warning signs.
Key takeaways
- Hotel occupancy fell 6.5% year-over-year during June.
- Air travel into Harry Reid International Airport was also down 4.1% year-over-year.
- Casinos still managed to improve their YoY revenue and end a four-month declining income streak.
The Las Vegas Convention and Visitors Authority (LVCVA) reported only 3.1 million visitors traveled to Sin City during June, an 11.3% year-over-year decrease. Hotel occupancy also fell 6.5% during the same period, while the average nightly room cost was down 6.6% to $163.64.
In the same vein, Harry Reid International Airport, about six miles from the Vegas strip, reported a 4.1% year-over-year airfare drop.
Despite overall declines, revenue among Vegas strip casinos managed to improve 3.5% year-over-year to $765.3 million in June, while overall gaming for the entire state hit $1.33 billion. That ended a four-month streak when casinos obtained less revenue than they did the month before.
“I think some of the data in Las Vegas indicates that some of these stories are a bit exaggerated,” said Stevens, per Fox News. “The June gaming numbers were just released, and not everything is terrible.
He added, "I think in six months, I would believe that Vegas tourism and our economy overall will be in a much better place.”
Safety in positioning
In a report published in July, the LVCVA said the tourism decline was likely motivated by "persistent economic uncertainty and weaker consumer confidence.”
According to Stevens, Circa and other nearby gaming facilities are unlikely to feel those effects due to their position. That’s because their location and surrounding amenities make them less susceptible to feeling the results of economic fluctuation.
“If you really start unpeeling some layers of the onion in Las Vegas, I think you're going to find companies that have very specific areas that are a little less subject to the economy and that are doing okay,” he said, while admitting there’s a “mixed bag” of opinions across the industry regarding the tourism decline. “[The] high end is a little less impacted by the economy, and then there are others that are doing well as well.”
One of the greatest concerns is related to the number of people entering Las Vegas. According to the Nevada Office of Workforce Innovation, 26% of Vegas’ workforce was dedicated to leisure and hospitality as of January 2023. Sustained periods of low travel could increase unemployment and create other negative economic effects.
Turning the corner
The U.S. Travel Association estimated the United State could receive about two million, or 10%, fewer Canadian visits this year. That would have a large effect on Nevada, among the five most popular destinations for Canadian travelers.
Stevens said global exchange rates and economic instability also played a role in the diminished number of guests.
“Clearly, [there are] some concerns with regard to international tourism," said Stevens. "I think everyone is in a position where you can say we're missing some of our Canadian friends who aren't visiting this year.”
In the meantime, sports, particularly the UFC, have been crucial for casinos. That will go to another level with the NFL season around the corner, and when the Oakland A's complete their move to Vegas in 2028.
Vegas is also the rumored recipient of one of the NBA’s next expansion teams, which hasn’t been confirmed.
“[The] fights have been great. Now we're getting into really a boom time of both groups coming for fantasy football drafts, as well as people coming to sign up for our world's largest football contest in Circus Survivor and Circa Millions,” Stevens said.
