Analyst Cautious on Leisure Travel Demand amid Dip in Las Vegas Revenue
Although busy, July wasn’t the best month for gaming operators across Nevada. Data released earlier this week by the Nevada Gaming Control Board (NGCB) pointed to a gaming revenue decrease observed last month.
In total, the gaming revenue in July was $1.3 billion, a figure that signaled a 6.91% year-over-year decrease when compared to the corresponding period in 2023. Not unexpectedly, Clark County, the home of Las Vegas, also recorded a decrease in the total nonrestricted gaming revenue which halted at $1.11 billion, a 7.36% dip year-over-year.
Chad Beynon, an expert analyst with Macquarie, who was recently quoted by Casino.org, spoke about the slower performance recorded by the gaming and hospitality sector in July, acknowledging the year-over-year decrease. Although optimistic about the non-gaming vertical in Las Vegas, the expert said that he is cautious when it comes to leisure travel demand.
Beynon predicted that the slowing of leisure travel demand may push the environment into becoming more competitive. At the same time, the analyst predicted that such activity may impact the sector’s margins.
“Although we remain positive on the non-gaming outlook in Vegas given strong group travel and events calendar, we are becoming more cautious on slowing leisure travel demand, which could lead to a more competitive promotional environment and hurt Vegas margins.“
Chad Beynon, an expert analyst with Macquarie
Beynon spoke about the decrease in revenue per available room (RevPAR), recorded during last month. Acknowledging that this was one of the key indicators for the performance of gaming and entertainment operators, he said that in July RevPAR decreased by 4%.
Additionally, Beynon outlined the fact that this July had two fewer weekend days when compared to 2023. Undoubtedly, this had a further impact on the revenue reported last month.
Outlook about the Sector Is Optimistic, Experts Predict
Earlier this week, NGCB’s senior economic analyst, Michael Lawton, explained that the results from July and July 2023 are difficult to compare. This is because last year, an unusually high table hold percentage boosted the financial results.
Still, Lawton said that he remains optimistic, predicting that the dip in July doesn’t mark the “start of any downturn.” While cautious, Beynon was also hopeful, considering he kept the $52 price targets for both Caesars Entertainment and MGM Resorts International. Additionally, the analyst retained the “outperform” ratings of the two leading hospitality and gaming companies.
