Business in Las Vegas continues to improve, mainly due to leisure travelers, helping lift Nevada to a monthly record for gross gambling revenue.
Hotel occupancy in Sin City climbed in May back toward prepandemic levels, especially on weekends. Total hotel occupancy in the city in May was 70.9%, up from 31.6% in January, according to the Las Vegas Convention and Visitors Authority. That’s still well below the 91% comparable number in 2019.
“Clearly, pent-up demand is visible in Las Vegas,” says Barry Jonas, an analyst at Truist Securities. “The big question really is when does it normalize and once it does normalize, where is the international traveler and where is the midweek group traveler?”
Shares of MGM Resorts International (ticker: MGM), the largest casino resort operator on the Strip, were down about 1% this week; Caesars Entertainment (CZR), which also has a big presence on the Strip, was up about 0.5%.
This recent uptick in occupancy comes at a time when casino operators have lifted most of their Covid-related restrictions.
Still, midweek hotel occupancy, which has lagged behind weekends owing to the steep falloff in business and group travel due to the pandemic, was 62.8% in May, up sharply from 22.5% in January but still well off the 88% it hit two years earlier.
Business and group travel hasn’t come close to recovering to prepandemic levels, though there were a few notable trade shows in Las Vegas last month, including World of Concrete.
The summer is typically a slower time for Las Vegas conventions and trade shows, so investors will keep close tabs of fall activity for signs of marked improvement.
Weekend activity, relying on leisure travelers, continues to drive the recovery in Vegas. In May, weekend hotel occupancy was 87.8%, compared with 48.3% in January and 96.4% in May 2019.
Total Las Vegas Strip occupancy reached 71.8% in May, up from 31% in January. That’s below the 92.2% hit two years earlier.
In another sign of improving conditions, Nevada’s gross gambling revenue set an alltime monthly record in May, helped by a strong showing in Las Vegas.
Gross gambing revenue is essentially the amount wagered that the casino gets to keep but before promotional activities are taken into account.
On the Las Vegas Strip, casino gross gambing revenue totaled $656 million, up 27% from May 2019—before the pandemic started. Gross gambing revenue from slot machines was up 25% in May versus the same period in 2019, and table games like poker and blackjack climbed by 30%.
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