{"id":329180,"date":"2024-08-29T16:21:40","date_gmt":"2024-08-29T21:21:40","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=329180"},"modified":"2024-08-30T09:48:33","modified_gmt":"2024-08-30T14:48:33","slug":"las-vegas-casinos-could-be-pinched-by-consumer-lethargy","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/las-vegas-casinos-could-be-pinched-by-consumer-lethargy\/","title":{"rendered":"Las Vegas Casinos Could Be Pinched by Consumer Lethargy, Analyst Says"},"content":{"rendered":"

It was just one month, but Nevada\u2019s gross gaming revenue (GGR) report for July was bad. That could signal consumers are pulling back on gaming-related spending.<\/p>\n

\"Nevada
Part of the Las Vegas Strip. An analyst says lower-end properties were behind the July drop in Nevada gaming revenue. (Image: The Wall Street Journal<\/em>)<\/figcaption><\/figure>\n

In the seventh month of the year, Nevada casinos and gaming bars won $1.3 billion<\/a>, a 7% year-over-year drop. GGR on the Las Vegas Strip — the casino hub of the US — tumbled 15%, representing the first month-over-month decline in four months. That\u2019s prompting some analysts to take a more cautious view of domestic leisure travel demand.<\/p>\n

In a new report to clients, Macquarie analyst Chad Beynon acknowledged that July 2024 was a tough comparison for Strip operators relative to the year-earlier period because there were two fewer weekend days in the month this year. He added that revenue per available room<\/a> (RevPAR), one of the key nongaming metrics for casino operators, dipped 4% last month.<\/p>\n

Although we remain positive on the nongaming outlook in Vegas given strong group travel and events calendar, we are becoming more cautious on slowing leisure travel demand, which could lead to a more competitive promotional environment and hurt Vegas margins,\u201d Beynon observed.<\/p><\/blockquote>\n

He maintained \u201coutperform\u201d ratings on MGM Resorts International (NYSE: MGM) and Caesars Entertainment (NASDAQ: CZR), the two largest Strip operators, while keeping $52 price targets on both gaming stocks.<\/p>\n

Lower-End Strip Casinos Could Be Hurt By Consumer Pullback<\/h2>\n

Beynon added that the aforementioned 4% RevPAR drop experienced in July was largely attributable to \u201clower-end\u201d Strip properties.<\/p>\n

\n

That\u2019s a double-edged sword because while it implies there\u2019s still resilience and vibrancy among more affluent visitors to the Strip, there are many consumers who are in the middle, economically speaking. When they visit Las Vegas, they typically stay at midtier integrated resorts, plenty of which are operated by the likes of Caesars and MGM.<\/p>\n<\/div>\n

Both companies have their share of high-end Strip properties<\/a>, but as the operators of venues such as Excalibur and Luxor (MGM), and Flamingo and Harrah\u2019s (Caesars), each could be hampered if middle-class consumers dial back gaming-related spending and travel.<\/p>\n

\u201cWe still expect table and slot volumes to rebound back to trend in August. For 2024E, we now expect Strip GGR to come in around -2% with a tougher 2H comp,\u201d added Beynon.<\/p>\n

California Could Be Problematic<\/h2>\n

Over the past several years, the US economy has grappled with the highest inflation rates in four decades and, as a result, the highest interest rates in over 20 years. Still, consumers have remained dedicated to casinos, particularly in Las Vegas, and with inflation cooling, that’s stoking hope the gaming industry will remain resilient.<\/p>\n

\n

Still, there have been signs that all is not well in the land-based gaming industry. For example, some operators have reported softness in some regional markets<\/a> this year, most of it attributable to lower-rated players reining in spending.<\/p>\n<\/div>\n

Specific to Nevada, the state\u2019s casinos could be pinched by other macroeconomic headwinds, including the fact Nevada is tied with California for the highest unemployment rate in the country. That could weigh on Las Vegas locals’ gaming venues and taverns while California\u2019s elevated jobless rate and the highest gas prices in the country could compel some consumers there to reduce visitation to Las Vegas and Reno. California accounts for about 20% of visitation to Las Vegas gaming properties.<\/p>\n","protected":false},"excerpt":{"rendered":"

It was just one month, but Nevada\u2019s gross gaming revenue (GGR) report for July was bad. That could signal consumers are pulling back on gaming-related spending. In the seventh month of the year, Nevada casinos and gaming bars won $1.3 billion, a 7% year-over-year drop. GGR on the Las Vegas Strip — the casino hub […]<\/p>\n","protected":false},"author":46,"featured_media":323863,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10,81886],"tags":[81897,81903,23],"acf":[],"yoast_head":"\nLas Vegas Casinos Could Be Pinched by Consumer Lethargy<\/title>\n<meta name=\"description\" content=\"Las Vegas Casinos Could Be Pinched by Consumer Lethargy, Says Analyst.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/las-vegas-casinos-could-be-pinched-by-consumer-lethargy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Las Vegas Casinos Could Be Pinched by Consumer Lethargy\" \/>\n<meta property=\"og:description\" content=\"Las Vegas Casinos Could Be Pinched by Consumer Lethargy, Says Analyst.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/las-vegas-casinos-could-be-pinched-by-consumer-lethargy\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2024-08-29T21:21:40+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-08-30T14:48:33+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2024\/06\/im-966878.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/las-vegas-casinos-could-be-pinched-by-consumer-lethargy\/\",\"url\":\"https:\/\/www.casino.org\/news\/las-vegas-casinos-could-be-pinched-by-consumer-lethargy\/\",\"name\":\"Las Vegas Casinos Could Be Pinched by Consumer Lethargy\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/las-vegas-casinos-could-be-pinched-by-consumer-lethargy\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/las-vegas-casinos-could-be-pinched-by-consumer-lethargy\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2024\/06\/im-966878.jpg\",\"datePublished\":\"2024-08-29T21:21:40+00:00\",\"dateModified\":\"2024-08-30T14:48:33+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Las Vegas Casinos Could Be Pinched by Consumer Lethargy, Says Analyst.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/las-vegas-casinos-could-be-pinched-by-consumer-lethargy\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/las-vegas-casinos-could-be-pinched-by-consumer-lethargy\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/las-vegas-casinos-could-be-pinched-by-consumer-lethargy\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2024\/06\/im-966878.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2024\/06\/im-966878.jpg\",\"width\":1200,\"height\":800,\"caption\":\"Part of the Las Vegas Strip. 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