Strip operators affected by 12 months of consecutive declines in tourism
Gaming analyst John DeCree believes the Las Vegas locals market will outperform casinos on the Las Vegas Strip properties, saying it is better positioned due to favourable demographics and capital spending.
DeCree, Director of Equity Research at CBRE Group, said: “Although comparisons get more difficult for the locals market in 2026, there are still several catalysts on the horizon that should fuel moderate growth, including tax cuts under the One Big Beautiful Bill Act and recent capital reinvestment from major operators such as Boyd Gaming Corp. and Red Rock Resorts.”
The Strip casinos rely heavily on incoming tourism. Over the last year, the total of 38.5m visitors was the lowest yearly total since the post-pandemic recovery year of 2021, according to the Las Vegas Convention and Visitors Authority.
The figure was down by 7.5 per cent from 2024 with December marking the 12th consecutive month of year-over-year visitation declines.
“Across our coverage universe, the Las Vegas Locals market should benefit the most from the OBBB Act given the concentration of tipped employees and number of retirees living in Las Vegas, coupled with the city’s propensity to gamble.”
“Since 1984, annual gross gaming revenue on the Strip declined 11 times compared with six times for the locals market. Of those six years, three were related to the global financial crisis (2008-10), decreasing 21 percent from peak-to-trough vs. 19 per cent on the Strip,” DeCree said. “One was due to the COVID-19 pandemic (2020), down 23 per cent vs. 43 per cent on the Strip.”
“In other recessionary periods like the dot-com bubble, locals gross gaming revenue increased 8 percent despite a three per cent decline on the Strip. Moreover, the locals market has decoupled significantly from the Strip with a more diversified economy and a more favourable supply-demand balance with the number of gaming positions per 100,000 residents down over 47 per cent since 2007.”
Kim Noland of Gimme Credit backed the view, adding that Red Rock Resorts would be a key operator in the growth of the locals market.
“The company owns seven major locations and 12 smaller properties, and its profit growth recently has been driven by its popular new casino Durango as well as upgrades at Green Valley Ranch and Sunset Station expected to be completed this year,” she said. “Red Rock’s largest and most significant peer, Boyd Gaming, owns casinos nationwide, and while its profit margins may be slightly superior to Red Rock, its overall performance in the locals market has lagged recently due to the success of Durango.”
“Red Rock is outselling the competition in part because Durango has grown the market since it opened and also because Red Rock is taking share with its major expansions. “Administration tax policies on tips, overtime and a senior citizen tax deduction will continue to assist the company’s core customers in the locals market.”
Steve Hill, President and CEO of the LVCVA, said: “Las Vegas operates at a scale that few destinations can match, and 2025 required us to remain nimble as conditions evolved. Despite a challenging environment, convention demand remained steady, the events calendar remained strong, and the destination continued to adapt in real time.”
Speaking at a Vegas Chamber conference at Wynn Las Vegas, covered by CDC, Boyd Gaming CEO Keith Smith said: “There’s no question that visitation to Las Vegas is down, and it’s not anything we haven’t seen before. It will come back. There is a core demand for Las Vegas. People are still spending money, and Las Vegas will continue to rebound over the course of time. I’m confident in the long-term future. This is just a dip. We’ll get through it and to the other side.
Bill Hornbuckle, CEO of MGM Resorts, said, however: “Occupancy is down three per cent and visitation is down. Over the next 14 to 15 months, we will have more conventions on the books and in our city than in history. We are as solid as a rock. The city’s gaming revenue on the Strip is flat off an amazing year, yet I read headlines that Las Vegas is dead. We are a well-balanced company and a well-balanced city, and we will get through this.”
The post Las Vegas locals market tipped for growth ahead of bigger Strip operators appeared first on G3 Newswire.
Strip operators affected by 12 months of consecutive declines in tourism Gaming analyst John DeCree believes the Las Vegas locals market will outperform casinos on the Las Vegas Strip properties, saying it is better positioned due to favourable demographics and capital spending. DeCree, Director of Equity Research at CBRE Group, said: “Although comparisons get more…
The post Las Vegas locals market tipped for growth ahead of bigger Strip operators appeared first on G3 Newswire.