Analysts Expect Significant Declines in Vegas Revenue
Industry experts are predicting a notable decline in gaming revenue for the Las Vegas Strip when the 2024 figures are published. The Strip is projected to finish the year with six consecutive months of year-over-year revenue decreases, marking the first instance of such a streak since January through May 2019, prior to the pandemic. Despite this downturn, analysts remain optimistic about the potential for growth in 2025.
In November 2024, gaming revenue on the Strip reached $788.7 million, a 3.9% decrease compared to $820.8 million in November 2023. For the year, total revenue is down 0.8%, with contributing factors including fewer weekend days in the accounting period, unusual slot hold percentages, and a reduced baccarat win rate. Experts have suggested that, excluding these challenges, November's figures would have been more in line with those of November 2023, which was one of the strongest months on record for the state.
Related: Las Vegas Strip Hotel Closures to Boost Earnings in 2024Deutsche Bank analyst Carlo Santarelli indicated that December is likely to present another difficult comparison due to the exceptionally high baccarat hold of 22% recorded in December 2023. Forecasts suggest a year-over-year decline for December 2024 in the upper single-digit range.
Barry Jonas from Truist Securities highlighted that November's results were particularly impacted by an 18% drop in baccarat winnings, even as Strip visitation increased by 1%. Revenue per available room fell 22%, a decline attributed to underwhelming results from the 2024 Formula 1 event. However, Jonas noted that normalized performance metrics were more positive than the headline numbers, and operators remain optimistic about growth in 2025, especially after the challenging first-quarter comparisons linked to the Super Bowl.
According to Jonas, Las Vegas operators expect more consistent trends in the coming year and are confident about returning to growth in 2025, thanks to a strong lineup of group events. Caesars management, for example, anticipates year-over-year growth in cash room revenue, particularly in December. Fourth-quarter EBITDA for Las Vegas is also expected to be flat or show modest improvement compared to the prior year.
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Weaker 2024 Won't Impact 2025
Projections for January 2025 appear promising, driven by the Consumer Electronics Show (CES). However, February could see a decline due to comparisons with the Super Bowl's impact in 2024. Strip operators are maintaining a positive outlook for the upcoming year, emphasizing the strong group event calendar and the potential for even greater performance in 2026, with major events like ConAgg and State Farm already on the schedule.
Casino consultant Brendan Bussmann, managing partner of B Global, acknowledged the hurdles faced by the Las Vegas market in 2024, including economic uncertainty and inflation affecting consumer behavior. Nonetheless, he highlighted the market's resilience, noting that high-profile events such as the inaugural Formula 1 race in 2023 created challenging benchmarks for 2024 revenue. Bussmann emphasized that long-term performance should take precedence over short-term fluctuations.
Trends in Las Vegas visitation show growth in international tourism, while domestic visitation has declined. Bussmann expressed confidence in the region's ability to weather economic pressures, citing the continued strength of gaming revenue over the past four years, even during periods of economic downturn. He predicted that 2025 will be a strong year for the Las Vegas Strip, supported by a robust calendar of events and solid group bookings.
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