Las Vegas has struggled to get back to prepandemic levels of guests.
In a normal year, the Consumer Electronics Show pushes Las Vegas to capacity. Nearly 200,000 people attend the convention, filling hotels not just on the Las Vegas Strip but pretty much any property in the city.
This year, while CES had an in-person show, many major exhibitors pulled out at the last minute due to a surge in Covid cases. CES happened, but it drew around 15% to 20% of its normal crowd.
Instead of driving prices to rarely seen levels at Strip casinos owned by Caesars Entertainment (CZR) – Get Caesars Entertainment Inc Report and MGM Resorts International (MGM) – Get MGM Resorts International Report, rooms sat empty and casinos were barely populated.
It was a stark reminder that while Las Vegas had reopened for business, business travelers — an incredibly important group of customers for the casino industry — had not yet fully come back.
The same script from CES repeated at two other traditionally huge Las Vegas conventions: the auto-related Specialty Equipment Market Association show and World of Concrete. Those shows happened with an in-person component, but attendance was weak and normal had most certainly not returned.
Now, Nevada has lifted its indoor mask mandate and there are signs of life, according to an executive from Southwest (LUV) – Get Southwest Airlines Co. Report Airlines, the biggest airline at Las Vegas’s Harry Reid International Airport, the Las Vegas Review-Journal reported.
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Can Las Vegas Expect a Business Travel Comeback?
Las Vegas saw 3.1 million people fly into Reid in January. That’s more than double 2020’s January passenger count, but not even three-quarters of the 4.2 million in January 2020, essentially the month before the pandemic began.
Dave Harvey, vice president of Southwest Air’s business-travel unit, told the Review-Journal that Las Vegas stands well-positioned to make a strong recovery.
“Even though business has been really depressed over the past two years, Vegas has actually punched above its weight because even though it hasn’t been the large 100,000-person meetings, there have still been a lot of midsize gatherings,” Harvey told the Review-Journal’s Mike Akers. “Those have helped prop Vegas up better than a lot of other markets.”
Harvey sees a number of signs that Las Vegas can expect a relatively quick comeback. He noted that shows running safely and the omicron surge fading set the table for a strong second half of 2022 and a full comeback in 2023.
“With the latest surge in late December, early January … a lot of the January business came off the books and February definitely softened,” Harvey said.
“But basically in March and on, all of those events and meetings held on. And the ones that pulled back in January and February are saying they can’t wait until January and February of ’23, so they’re all working to reschedule in any open window in the spring. The spring is going to be very robust.”
Las Vegas’s Big Players Make Big Las Vegas Strip Moves
Caesars and MGM have used the pandemic slowdown to make some big moves to their Las Vegas Strip portfolios. MGM, for example, has sold the operations at the Mirage to Hard Rock International while acquiring the Cosmpolitan.
“With over $500 million of capital invested to upgrade the property since 2014, the Cosmopolitan offers an incredible opportunity to expand our customer base and will provide greater depth of choices for our guests in Las Vegas,” MGM Resorts Chief Financial Officer Jonathan Halkyard said in September.
“We believe that we can leverage MGM Resorts’ expertise, operating platform and other highly achievable synergies to continue providing best-in-class service while driving growth for the property.”
Caesars has not been quiet either. The company has completed major renovations on the entryway to its iconic Caesars Place casino, and it plans to transform its Bally’s hotel/casino into its Horseshoe brand.
“At Horseshoe, it’s all about the gambler. Since 1951 Horseshoe Casinos have been home to the best odds, highest limits, and biggest jackpots. So, it’s fitting that we bring Horseshoe back to Las Vegas, and right on the Las Vegas Strip,” Jason Gregorec, general manager of the property, said in a news release.
“Holding to the Horseshoe tradition of providing impeccable service, our guests will see the property transform over time, ensuring we aren’t disrupting the excitement while we make the transition.”
Bally’s/the new Horsehoe sits essentially dead-center on the Las Vegas Strip.
