There is disquiet in Las Vegas. A sense of decay has started pervading discussions around the region as the revenue figures coming out of Nevada show tentative signs of stagnation and downturn. But while certain sectors have struggled, the Nevada eco-system is big enough to adapt, and it displays a natural resilience. In fact, steady statewide revenues are slightly disguising the more significant redistributions of weight going on below the surface. Over the past few months, Clark County has taken a string of disheartening blows, while the perhaps less glamourous, but better value for money areas a little out of town, like Boulder, have seemed to pick up the slack and mop up some of that lost custom.
The most notable signs of sector distress have come from the past six months’ tourism figures. Year-on-year growth over that time seems the most obviously impactful of those stressors. A trade war with Canada has seen flight bookings from the country to Vegas plummet by 70%. But not only Canada – the costs associated with a flight to Vegas make it a luxury that for most people isn’t aligned with the pressures of inflation and cost of living. How much was The Strip relying on those international tourists? Are domestic visitors, for whom the sight of the Venetian is more commonplace, going elsewhere, prioritising value over grandeur? Macau, by comparison, has seen annual growth every month this year except for February.
Casinos on The Strip are manned in the main by MGM Resorts or Caesars. Both are giants but in the data, there are clear signs of, if not panic, then proactive cost-cutting. There is talk of casino floors getting quieter, with dealer lay-offs contributing on top of decreased footfall. MGM has cut concierge services at six of its hotels, and two of the most famous venues in the country, Flamingo and Caesars, have been quietly and slowly downsizing. Clearly, the situation is far from terminal and the changes are manageable for now, but they are subtle indicators of a prevailing headwind.
Las Vegas was built on escapism. The lights, the shows, the scale – all of it is designed to draw you in to the Vegas dreamworld. But it really made that stick when it combined those qualities with great value. An exclusive, premium feel, but with broad appeal. For the longest time, Vegas has been able to attract the average punter as well as the ‘wealthy whale,’ people happy to spend a few dollars, while lacking the finances or will to join the high-rollers. Arguably, with travel and accommodation seen as more of a luxury, it’s remote casinos that can trade on the value ticket. And even in Vegas, where blackjack is the most popular game, it’s sports betting that’s pointing in the right direction amid this state of uncertainty.
As the house scratches around for value on its end, inevitably, the product becomes gradually eroded. And people are noticing. Not only are there complaints around service and rising costs, but rising hold percentages in Vegas’ slots are souring players’ views of the gambling haven. Suddenly there are more lay-offs and prices get higher still – a vicious cycle is playing out and it’s a fiddly one to escape from.
Reports of the fall of Vegas may be a little exaggerated. The area has shown resilience in the past, bouncing back from the pandemic with aplomb. For all the warning signs, there are also hardy survivors shining through the data. Baccarat’s revenues seem to be able to survive almost anything. Perhaps standing firmest of all though, is the multi-denomination slot machine, which has defied every trend and posted hale and hearty growth figures every month this year.
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