As the travel-heavy Thanksgiving holiday approaches this week, the latest round of data from Nevada shows that the Las Vegas tourism slump continued in October despite standout performance on the Strip.
The Nevada Gaming Control Board reported on Tuesday that the state reaped $1.35 billion in gross gaming revenue in October, a 5% increase year-over-year. The Strip came roaring back from a September decline to post GGR of $748 million, an 8% jump YoY.
Through the first four months of the fiscal year, the Strip is +3.3% above its pace of a year ago. America’s gambling capital is now on track for its fourth YoY gain in the last five fiscal years.
Despite the uptick in revenue, tourism numbers for October were lacklustre again. The Las Vegas Convention and Visitors Authority reported that citywide visitation slid 4.4% to 3.4 million for the month. That continues a streak of 13 months without a YoY visitation gain of more than 1%.
The Strip was down in all of its metrics, including total occupancy (-2%), average daily rates (-5.5%) and revenue per available room (-7%).
Convention attendance, driven in part by the industry’s annual Global Gaming Expo, was up 8% YoY to 603,600. Yet that too was perhaps underwhelming in the sense that it was markedly lower than 2023 (640,000) and 2022 (628,000).
Baccarat again powers success on the Strip
From a business perspective, the Strip has been heavily reliant for many months on boom-or-bust baccarat performance to help mask other declines.
Such was the case in October – Strip casinos won $116 million on the game, an eye-popping 69% gain from last year. For context, that one total is more than any other market reported as a whole except for the Las Vegas locals segment.
The vacillating performance of the game is illustrated by the fact that the Strip is +20% on baccarat in the past three months but just +2% in the past 12. October’s strong table game performance was enough to overcome a 2.3% decline in slot revenue, a rarity for the market.
Table games consultant Bill Zender explained that the amount of money being wagered on baccarat is what actually makes for the up-and-down performance. The gameplay itself is “pretty level”, he said, in the sense that it is mostly one-to-one or one-to-0.95 payouts versus high-multiple payouts and side bets that are possible in other games like blackjack, craps and roulette.
“Baccarat is not really a volatile game,” Zender told iGB. “What makes it volatile is the amount of money wagered on it. I think, for the bigger players, they have to be going in excess of $100,000 max bet in some of the bigger clubs.”
That dynamic would fall in line with overall Las Vegas tourism and revenue trends of bringing in fewer players but making more from them.
F1 race arrives at time of need for Las Vegas tourism
This past weekend, Formula One (F1) fans flocked to southern Nevada for the third instalment of the Las Vegas Grand Prix, which resulted in another dominant win for Red Bull’s Max Verstappen. Verstappen has won two of the three Las Vegas races and managed to climb even higher up the F1 season standings after McLaren drivers Lando Norris and Oscar Piastri were disqualified post-race for car-related violations.
Gaming stakeholders were counting on a boost from the third annual race after seeing a significant stepdown in economic impact from year one to year two. The first race generated an estimated $1.5 billion in impact, as opposed to just under $1 billion last year, though the first year was boosted by infrastructure costs paid by F1 parent Liberty Media.
LVCVA CEO Steve Hill told the Las Vegas Review-Journal after this year’s race that he expects the event to post “at least” $1 billion in impact.
MGM CEO Bill Hornbuckle thanked local residents for their patience in dealing with construction and noted there are more issues still to be resolved. Still, he stressed how important the international event has become for Las Vegas tourism, especially during what was previously among the slower weekends of the year.
“Obviously for our high-end guests and our high-end corporate partners, it pays off,” Hornbuckle told the Review-Journal. “We’ve been at this now for our third year, and we did invest a lot of money in what I call our big erector set out front here (of the Bellagio), so it takes a couple of months to bring up and take down. But it’s all worth it. It may seem for three days that it’s kind of crazy, and it is, but it is all worth it, I can promise you.”
It was another month of solid revenue but less-than-solid visitation for Nevada as the Las Vegas tourism conundrum endured.