Changing Landscapes: The Costs of Visiting Las Vegas
Esther and Tom McElhinney, residents of Cleveland, have enjoyed more than two decades of vacations in Las Vegas. However, during their most recent trip, they found that the magical allure of the Strip is beginning to fade. “The food is expensive, hotels are expensive,” Tom lamented, standing between Harrah’s Las Vegas and The Linq. Their grievance reflects a broader concern among visitors about rising costs; meals that once felt like a steal now seem exorbitant, with Tom stating, “I just don’t want to have to pay $400 for every meal.”
Gone are the days of budget-friendly options and bountiful buffets. “You used to be able to play $5 blackjack everywhere,” Tom continued, expressing frustration that made finding affordable entertainment seem increasingly difficult. “The allure here is gone. Vegas is really pricing people out.”
Current Economic Trends
As visitors like the McElhinneys express discontent, Las Vegas faces a significant downturn in tourism, drawing parallels to the economic challenges of the Great Recession over a decade ago. Gaming revenue at Strip resorts has been on a decline, falling in four of the last seven months and remaining flat compared to the previous year. This decline comes despite the optimism expressed in earnings reports from casino executives, raising questions about how long these challenges will persist.
The statistics also tell a story of diminishing footfall. As of July, Las Vegas attracted over 22.6 million visitors, but this marks a decrease of 2 million, translating to an 8% decline from the previous year. Labor Day weekend, usually a bustling holiday, is predicted to witness a nearly 2% drop in attendance, now forecasted to host around 320,000 visitors compared to 326,000 the year before.
Public Perception
A significant challenge for the Strip lies in the narrative being shared widely on social media and other platforms—that Las Vegas is overpriced and lacking value. Patty Steiner, a frequent traveler from Chicago, echoed this sentiment during her discussion about rising costs. Previously untroubled by trips to Las Vegas, she is reconsidering her plans due to the soaring prices. “Everything is high. I just feel like it’s going to be a long road,” she said, capturing the frustrations of many.
Despite these prevalent feelings, Steve Hill, CEO of the Las Vegas Convention and Visitors Authority, contested the negative narrative. During a recent media briefing, he encouraged potential travelers to look beyond headlines and seek out the true costs, indicating there are still value options if one does some research. “Call a travel agent, call on the properties. See what the price of Las Vegas really is,” Hill asserted, suggesting that preconceived notions might overshadow the real picture.
Historical Context
The financial landscape of Las Vegas has seen cycles of boom and bust. The Strip set a gaming revenue record of $6.8 billion in 2007, a figure that took nearly a decade to approach again post-recession in 2018-2019. The pandemic brought about a staggering 43% revenue loss in 2020, but recovery in 2021 saw revenues rise to $7.1 billion—a record at that time. However, Michael Lawton, recently retired from the Nevada Gaming Control Board, noted that the current downturn does not mirror the dramatic falls of the past. With sustained gaming revenues of $1 billion or more for 53 straight months, there are mixed indicators of robust recovery versus current struggles.
Operators’ Perspectives
Casino operators maintain a hopeful outlook despite facing revenue declines, with MGM Resorts and Caesars Entertainment reporting a 4% dip attributed to declining hotel bookings and rates. Yet, executives have been quick to reassure that the essence of Las Vegas remains intact. “Las Vegas remains fundamentally solid,” stated MGM Resorts CEO Bill Hornbuckle during a recent earnings call, reinforcing that the downturn is likely a temporary hurdle.
The average daily room rate on the Strip, while currently down 5.1%, raises questions about future pricing trends as seasonal changes approach. Analysts are eyeing November with anticipation, expecting a rise in rates tied to the highly publicized Formula One Las Vegas Grand Prix. The event is projected to boost visitation significantly, featuring not only racing but also other high-profile events across the weekend, adding a layer of complexity to a rapidly evolving market scenario.
Visitor Experience and Adaptations
Despite the obstacles presented by elevated costs, some visitors have discovered strategies to enjoy Las Vegas without breaking the bank. Brianna Garcia, in town for a bachelorette celebration, shared how she took advantage of discounted tickets and planned activities in advance. “You can’t just come to Vegas and expect things to just happen, or else you’re going to have to deal with high prices,” she advised, illuminating the challenges that many travelers face while attempting to enjoy the city’s offerings.
The Local Perspective
Interestingly, while the Strip grapples with these challenges, downtown casinos and local establishments are experiencing a more favorable economic climate. With a unique blend of local and tourist patrons, gaming revenue in downtown Las Vegas has risen by 1%, and average hotel room rates remain appealingly low at $97.19 per night. Derek Stevens, CEO of Circa Resort & Casino, acknowledged the Strip’s potential to price out average visitors but noted the need for diversification in dining and entertainment options, reflecting a shift in visitor preferences.
In stark contrast to the challenges faced by resort operators on the Strip, Red Rock Resorts recently reported record revenue, illustrating the resilience of local casinos. With a business model focused on the local population, Red Rock reported the highest three-month revenue in its nearly half-century history, achieving a 6.2% increase. The trends hint at a potential divergence in customer bases, with local establishments thriving while tourists might feel the pinch on the Strip.
Boyd Gaming’s insights mirrored this trend, revealing that declining hotel rates on the Strip are siphoning off business from their properties, which blend local and tourist clientele while offering more accessible prices. This contrast opens discussions around the evolving landscape of Las Vegas tourism, showcasing that not all areas are equally affected by the economic climate.
As the McElhinneys and countless others navigate the evolving dynamics of Las Vegas, their experiences underscore a pivotal moment for the city. The ongoing changes in pricing, visitor expectations, and the broader economic environment will undoubtedly shape the future of this iconic destination, making it essential to adapt in these uncertain times.