(AsiaGameHub) - As Las Vegas grapples with a sluggish economy, a $7 billion wave of major construction projects is slated for completion in the next three years, aiming to rejuvenate the Strip.
The A’s baseball stadium leads Sin City's revival, accompanied by a new Hard Rock and the transformation of the old Tropicana site. Wall Street gaming analysts are confident the city's rebound will follow in time after these developments are finalized.
Truist Securities Managing Director Barry Jonas and CBRE Director of Equity Research John DeCree recently addressed the Economic Club of Las Vegas on the condition of the local gaming sector.
“In our view, the current demand challenges and drop in visitation are temporary,” DeCree stated. “We believe people will return. If not this year or next, they will definitely come back in 2028 when new attractions open and there is more to experience. We're facing a struggle now, but that will shift. The significant private and public investment flowing into Las Vegas is a positive signal of future demand.”
The NBA is also considering potential expansion into Las Vegas, which would provide another major lift for the city.
“When you speak with people who haven't visited Las Vegas, they express a desire to see the Sphere,” DeCree noted. “They're waiting for their favorite band to perform. So the next major draw, be it the NBA or the A's, will undoubtedly pull people to the city. Ultimately, they will come because you can find everything here.”
Economic Challenges Persist in Sin City
According to the Las Vegas Convention & Visitors Authority (LVCVA), visitor volume in 2025 reached 38,545,700, a 7.5% decrease from the year before. Excluding the pandemic period, this represents the steepest decline since the LVCVA began recording visitation in 1970. By comparison, the peak annual visitation of 42,523,700 was recorded in 2019.
Even with fewer visitors, gaming revenue on the Las Vegas Strip hit a new annual record of $8.8 billion. Those who did travel to Las Vegas also spent more during their stays.
81% of visitors gambled
The average gaming budget increased to $848 last year
Overall hotel occupancy fell 3.3% year-over-year, while convention attendance dipped slightly by 0.1%.
A recent LVCVA visitor profile survey uncovered a concerning pattern. Fewer than 10% of all visitors last year reported it was their first trip, down from 15% the prior year and 24% in 2022.
“Amid inflation, recession worries, and tariffs, it's simpler to postpone a Vegas trip and stay home a bit longer,” Jonas commented. “As we head into summer, the true test will be whether we can resume growth. This year's event calendar is very robust, with records projected across various areas. My models aren't forecasting growth for the major Vegas operators, indicating the leisure segment is still under pressure, primarily at the lower end.”
The survey also indicated that 44% of visitors had a household income of $150,000 or higher. The city continues to find it most challenging to attract visitors from the lower and middle classes.
“Vegas excels at reinventing itself,” DeCree said. “Several companies are developing strategies to better attract that customer segment. The high-end market generates so much revenue and cash flow that we sometimes overlook or neglect the other segment, which represents 7% to 8% of visitation. We need to find a way to win that customer back.”
February Marks Bright Spot for Monthly Numbers
Las Vegas welcomed 3.03 million visitors in February, a 2% increase from the same month last year. This was the first year-over-year rise since 2024. Furthermore, the Nevada Gaming Control Board's February report showed the Las Vegas Strip's gross gaming revenue held steady year-over-year at $696.2 million.
Baccarat was a standout game on the Strip, with operators winning $119.9 million. This figure represents a 37% jump from the same period a year earlier.
Looking ahead, April is predicted to be a slower month, but a packed concert schedule in May should offer a lift.
The Sphere has emerged as a success story during Las Vegas's slump, hosting residencies by top-tier acts like U2 and the Eagles. The venue has also gained from films such as The Wizard of Oz and Postcard from Earth, which collectively brought in $550 million.
Jonas anticipates the “potential for business growth in the second quarter, supported by easier year-over-year comparisons during the summer.”
“We believe there is substantial programming in the works to tackle the softness at the lower end,” he added.
Moreover, the LVCVA and casino operators are promoting a “value-oriented message” to counter the perception of price gouging that damaged the city's tourism in 2025.
“We'll observe how this develops into summer 2026, though there's always a danger that boosting occupancy by cutting rates could attract a lower-quality customer who doesn't contribute much overall,” Jonas said.
Final Analysis
Although operators maintain a guarded optimism, most Strip properties are likely to experience mixed results in the near term.
“At the high end – Wynn, Bellagio, Caesars Palace – you don't hear about difficulties,” Jonas observed. “The struggle is at the low end. Year-over-year comparisons will become less severe, and company initiatives will help. But factors like the war in Iran and higher gas prices remain. A return to growth is visible, but it's not without its risks.”
DeCree, for his part, ended on a more positive tone.
“The U.S. consumer is remarkably resilient and enjoys spending, particularly on experiences,” DeCree concluded. “We've observed consumer spending hold steady since the onset of the war in Iran. That could shift if the situation continues, but for now, consumers are carrying on as usual, especially regarding entertainment and hospitality.”
That is the bet Las Vegas is making as it moves forward into an unpredictable future.
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