Las Vegas is Hot, But the Economy May Deal Casinos a Losing Hand

Casinos Rebound

Las Vegas was hit hard during the pandemic. Casinos, previously open for 24 hours a day, were shuttered and unemployment soared over 30% in April 2020. In June of that year, the average hotel price dropped to about $118 a night.

The Strip’s fortunes have begun to change. Business is increasing as some are directing their pent-up entertainment demand to the gambling tables and slot machines. In June, the average hotel price rebounded to $168 a night, a 42% increase from its 2020 dip. It seems after years of pandemic restrictions, Americans are looking for ways to get out and have some fun, despite record-high inflation raising prices.

Experience-Based Economy

Market observers have noted a trend toward experience-based spending. MGM Resorts (MGM) CEO William Hornbuckle said their company has benefited from “this insatiable appetite for travel experience,” as well as “the millennials stepping into it.”

Las Vegas has seen a 12% increase in tourists from last year, however the city has yet to reach the level of visitors it had pre-pandemic. Even so, MGM Resorts reported this year’s revenues from its Las Vegas casinos have surpassed what was generated in the same quarter of 2019. Caesar’s (CZR) casinos also experienced encouraging results, with revenue up over 33% since last year.

Dead-Cat Bounce?

Still, market observers are keeping a wary eye on both economic growth and inflation. Both have the potential to impact casino operators’ bottom lines. Rising prices can be double-jeopardy — they drive labor costs higher all while discouraging budget-stretched visitors.

For now, Las Vegas seems to be a low-cost option for travelers who want to get out and have a little fun. Economic woes could certainly cause the current Sin City boom to fizzle. Casino operators will take the gamble.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

James Flippin ABOUT James Flippin James Flippin is the son of a financial advisor who grew up hearing and learning about bond yields, interest rates, the stock market, and the ins and outs of Wall Street. After stints as a licensing and business broker for Marcus and Millichap in New York City, James moved into broadcasting and became a reporter and anchor. He covered crime, politics, finance, and tech at NBC News Radio while working part-time as a producer for SiriusXM. James graduated from the University of Delaware with a bachelor’s degree in political science and economics. He's also an accomplished podcaster with over 10-years of experience.

TLS 1.2 Encrypted
Equal Housing Lender