A gaming analyst for Bank of America said demand still appears low as more Las Vegas Strip rooms come online this week and predicted rates will remain depressed for the foreseeable future.
Shaun Kelley, a managing director in Americas Equity Research covering gaming for Bank of America, said Las Vegas is harmed by a lack of convention business. He cited their survey that showed quoted Strip room rates down 38 percent year-over-year for June; 47 percent year-over-year for July; and 31 percent year-over-year for August.
On June 11, the rates for June, July and August were $107, $109, and $124, respectively. The rates for June 2019 were $175; July 2019 was $202; and August 2019 was $181.
“Compression remains minimal which we expect to continue in the absence of group/convention travel,” Kelley wrote in his report.
Kelley said they analyze web traffic for resort websites and track mobility data to assess the strength of pent-up leisure demand. Website traffic for Strip resorts is down 51 percent year-over-year since May 22 when Gov. Steve Sisolak announced a target of reopening casinos on June 4, he said.
Those trends, however, have improved with the three-day moving average year-over-year down 27 percent as of June 8 compared to the trough of 85 percent in April, he said.
The Fourth of July weekend is expected to be the strongest since the reopening and as more people feel comfortable flying Labor Day weekend is expected to be even stronger.
Kelley said mobility data based on retail and recreation visits in Clark County saw a slight increase with casino reopenings but trail the overall U.S and other gaming states in the South and Midwest that have eased coronavirus restrictions to a greater degree.
“We are cautious on the pent-up demand narrative for the Strip and believe without group/convention business, the recovery will continue to lag other areas of gaming,” Kelley said.
The breakdown for properties for June, July and August rates show MGM Resorts International down 39 percent, 48 percent and 28 percent respectively. For Caesars Entertainment, rates are down 43 percent; 45 percent and 40 percent. For Wynn Resorts, rates are down 43 percent, 53 percent and 51 percent; For Las Vegas Sands, rates are down 24 percent; 43 percent and 14 percent. For Red Rock Resorts, rates are down 41 percent, 42 percent and 35 percent.
Website visits for resorts show “periodic spikes in interest for Strip resorts, but trends remain mostly lower than last year,” Kelley said.