Why Has Las Vegas Broken Revenue Records Six Months in a Row?

With six record-breaking revenue months for Las Vegas, is that due to an increase of visitors, visitors gambling more money (and losing more), or both?

Your second guess is the correct one. Las Vegas is achieving more with less. Or to put it another way, fewer gamblers are spending more.

Take the all-time apex last July. Eight percent fewer passengers went in and out of McCarran than in July 2019 (gaming’s previous biggest year). International travel was basically nonexistent. Yet Strip casinos managed to gross 46.5% more than in the same month in 2019: $794 million.

Slot coin-in on the Strip leapt 36%, which translated into $409.5 million for the house. Table-game wagering was up 38% and luck was with the casinos, as win (or “losses,” if you’re a customer) was 31% higher, $226 million, even with lower hold. And all-important baccarat saw 25% more wagering and a very lucky house, as win rocketed to 115% higher.

The other major tourist market, downtown Las Vegas, popped 35.5% to $71 million, prompting Boyd Gaming to reopen Main Street Station.

The phenomenon continued in August, with Strip casinos grossing $626 million, a 20% gain over two years previous (comparisons to 2020 are essentially meaningless, due to casino closures and depleted tourism). The Strip's August numbers were accomplished with 14% fewer air passengers than two years ago, including less than 80,000 international travelers (that number shouldn't expand dramatically until next month). Domestically, passenger loads were down 8.5%.

Downtown casinos catapulted 42% to $64 million, helped no doubt by new product (Circa) and restored inventory (Main Street Station).

According to figures supplied by JP Morgan analyst Joseph Greff, August visitation was just a hair under three million souls, with citywide hotel occupancy at 73 percent (15 percent lower than August 2019). Even so, hotels managed to capitalize on revenue per available room ($111), only 6% off the 2019 pace. Hoteliers actually charged more despite dramatically lower occupancies, 13% more. Weekend occupancies were strong (87%), while weekday heads in beds ran at 68%, which is pretty darn good, considering that convention and meeting business was only just returning to Sin City.

What explains the more-from-less phenomenon?

First, is anyone out there as tired as we are of the phrase "pent-up demand?" Even so, it's true: people are sick of being locked down. The gamblers among them are obviously making up for lost time.

The recovery is also attributable, in part, to what The New York Times describes as “America’s cash glut. Even amid a global pandemic, most American households are doing better financially than they were in 2019. Not only do Americans have more money than they did in 2020 or 2019, but many also spent the past two years delaying purchases. This spending has also been reported overseas, so when international tourists start returning to Las Vegas, it'll be Katie bar the door. 2019 may have been the high-water mark for gambling in the U.S., but 2021 is bidding to overtake it.

Of course, another explanation is the stimulus money, including the major increase in unemployment compensation. Some of that money going into the accounts of people with lots of time on their hands is bound to find its way into the Las Vegas casino coffers.

Then there's what Carlo Santarelli, an analyst for Deutsche Bank, has identified as another source of casino profits: It's borrowed from other industries, especially entertainment, money shifting from "amusement parks, movie theaters, concerts, live spectator sports, and other recreational and entertainment options to casinos, sports betting, and other forms of legal gambling. Santarelli pegs the total number at $18 billion shifting from locked-down entertainment options to the various gambling outlets.

Finally, in an analysis for CDC Gaming Reports, Ken Adams discussed another interesting possibility for the casino boom: season tickets to live sporting events. "Most season tickets holders, and there are millions of them, opted to defer their 2020 tickets, when seats were empty, until this year, rather than asking for a refund. So now they have money that they would have allocated on another season’s worth of tickets. What better way to spend some of that money than head off to a casino?"

How long this phase of fewer gamblers and higher profits will last is anyone's guess. But for now, the casinos are raking it in.

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Comments

Jackie Oct-27-2021

I'm curious

Wouldn't it also be a contributing factor that not all casinos that were open pre-pandemic are not open today?
Fewer places to lose your money means increased profits for those that are, for example made in the QOD answer "prompting Boyd Gaming to reopen Main Street Station."

David Miller Oct-27-2021

It won't last

  Visitors currently are acting like drunken sailors who have been at sea for months, without liberty and pockets full of money. With the government not giving away more free money, and with the forthcoming inflation and increased taxation future visitors will not have as much disposable income. The current administration, with their demands for increased taxation (to cover their insane policies) will drain the funds of average Americans. A recession in in the wings and will eviscerate the middle and lower class - people will have a difficult time trying to pay for food, lodging and everyday fundamentals.

hawks242424 Oct-27-2021

Someone needs to study history

Looks like David needs to student a little history.  All the recent recessions going back to 1991 in this country have happened under the watchful of a GOP president, only to have the country pulled out by the policies of a democrat.

Luis Oct-27-2021

covid anxiety

Everybody was locked in their homes, even doing work at home,for a good while, that put a strain on every one, and the only place to release that anxiety is Vegas, specially for those who gamble more regularly, the anxiety level was prety high. So it is no wonder that when Vegas was re-open, even when it was not completely open,and knowing that casinos where going to be pretty tight, that most places would be most accommodating in separating these people from their money and covid stimulus money , with no effort at all, because resorts did not make an effort to put service first, no hurry to open buffets, or give a little bit to those who where hungry to get out of their homes. It's pretty logical, vegas resorts took full advantage of covid anxiety.

Kevin Lewis Oct-27-2021

Most Vegas visitors have the IQ of a walnut

Imagine an experience--a fun and popular experience--of any kind. People happily travel and spend their money to have this experience.
Now, double (or triple) the price of that experience, while at the same time, making it much less enjoyable. You might expect that fewer people would want to pay for it. That is, in a rational society. Instead, more people than ever before eagerly seek out this experience, not caring about the cost or how crappy it has become.
You might conclude that this experience is considered by many people (many, many people, apparently) to be absolutely essential to their very existence. You might wonder what this experience is, that it exerts such a powerful grip on the minds (and wallets) of the great unwashed.
Then I tell you, this experience is: "Come to Las Vegas and lose a bunch of money," Your reaction would be: "WTF???"

Bob Nelson Oct-27-2021

Not like this subject hasn’t been discussed at length in/by LVA.

In the immortal words of Foghorn Leghorn.  “I say, I say, I say, now pay attention here son!”

rokgpsman Oct-27-2021

Stay tuned, it's gonna get crazier

Words from a 1967 rock song sums up the feeling many Vegas visitors have, "damn the cost and consequences, I'm going to enjoy myself now". The world may end tomorrow, so let's party today.
...
One, two, three, four
Shah-la, la-la-la-la live for today
Shah-la, la-la-la-la live for today
And don't worry 'bout tomorrow hey, hey, hey
Shah-la, la-la-la-la live for today
Live for today
By chasing after money
And dreams that can't come true...
-The Grass Roots

Jerry Patey Oct-27-2021

Crowds

People have been locked up for two years now. They are released and act like kids. The idiot corporate officers think this will last forever. No comps free nights plus expensive meals and they think this will continue. Talk to dead Benny Bunion. I was loyal to Fremont and 4Qyeens for years. I have not had a free night from either. Screw them. I can play 9/6 JOB at Sam’s Tunica who is 30 minutes away plus I get 50 dollars food and 160 free play per month. I don’t need them.

Jerry Patey Oct-27-2021

Revenues

With the prices they charge is there any surprise revenues are up. They say inflation is 6%. Real is 20-100%!verified. When next correction comes and Biden’s shelf shortages hit next year will be inteestring to see what happens to their revenues. Another separate issue. Have you all heard of NIH andvFauci’s exp on beagle pups. They fix their heads in cages and watch as sand flies eat them to death. Pics available but not shown on Fox News and Tucker. They also give total radiation to monkeys and watch them die. Benefit of our tax dollars. MSM aka fake news defends it. Fact not conspiracy theory.

Lotel Oct-27-2021

6 -12 months

I give it another  6-12 months then Vegas will return to normal. i was planing on another Vegas trip in the coming months but with no cheap or  comp rooms, no buffets, high prices for rental car ,etc, I will wait. Now we are looking at going to Florida,  Calf. someplace else warm. Let the Casinos have their big pay day,I will wait.

Hoppy Oct-27-2021

Re: rokgpsman

Atomic cocktails anyone?

Doc H Oct-27-2021

Lewis, really?

"Then I tell you, this experience is: "Come to Las Vegas and lose a bunch of money," Your reaction would be: "WTF???""

From based on what I've read from you, someone who gambles/gambled in las vegas, posted here you worked in las vegas as a dealer as I recall: You're just learning people who come to las vegas for the most part actually lose money? And do you realize rising costs are the reality of EVERYTHING these days for those who are paying attention in the NWO?

Actually, even in the "good old" days of las vegas many of you are stuck in, do you realize games odds are against you? And did you ever think to realize some people aren't into losing money, fast or slow, in machines or table games, don't care about odds that are ALWAYS against the player in the vast majority of cases, and just want to enjoy spend their money on hotel rooms, meals, etc.? And realize an "Expensive" LV room with res fee-parking in a 5 star hotel is far cheaper than that same place around the world?

Roy Furukawa Oct-27-2021

Answer:

Corporate Greed. Next question.

Question of the Day - 27 October 2021

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