Las Vegas Hospitality Growth Expected to Continue, Economist Says
Las Vegas, once synonymous with gaming, has transformed into a multifaceted entertainment hub. While gaming revenues may stabilize, the city’s hospitality sector remains robust. Cameron Belt, chief economist at RCG Economics, LLC, shares an optimistic outlook for Las Vegas, emphasizing both short-term and long-term prospects. Let’s explore the factors driving this growth.
The Shift Beyond Gaming
Las Vegas has evolved beyond its gaming-centric identity. Large-scale events, downtown investments, and the presence of professional sports teams have broadened its appeal. Post-COVID, the city attracts a diverse consumer base, including international visitors from Mexico and Canada. NHL hockey has bolstered Canadian tourism. Notably, Millennials’ visitation is peaking, while Gen Z—more budget-conscious—gradually enters the scene.
Room Supply Dynamics
In the near term, the Strip’s room supply presents an interesting dynamic. The recent closure of the Tropicana and the upcoming closure of the Mirage temporarily reduce room availability for budget-conscious travelers. However, the Fontainebleau Las Vegas introduced high-end rooms in late 2023. Overall, post-pandemic visitation is broader, driven by non-gaming amenities and a redefined Vegas experience.
Challenges and Opportunities
Cameron Belt acknowledges potential challenges. Construction impacts traffic, and rising labor costs due to new union contracts affect operators. However, the positive event calendar and demand environment favor the city. Jefferies Equities Research supports this view, identifying Red Rock Resorts and MGM Resorts International as top picks for investors. Las Vegas earnings haven’t peaked; they’re adapting to new supply and demographics.
