Vaccination, Lifted Restrictions Setting Up A Hot Summer In Vegas
Las Vegas is gearing up for one of its strongest summers in history, and if this past weekend is any indication, that’s just what the city is going to get.
The Centers for Disease Control announcement Thursday that vaccinated people can forgo masks in most indoor settings prompted Nevada regulators on Friday to loosen the mask-wearing requirement in casinos. Casino resorts, most of which were greenlighted to return to 100% of their capacity last week, saw huge crowds, including an influx of drive-in traffic from California and Las Vegas residents celebrating with family and friends to mark the apparent winding down of the COVID-19 pandemic.
In their most recent earnings call to Wall Street analysts, resort executives were full of optimism about the coming summer.
Caesars Entertainment said its weekends at its Strip properties are “sold out for the foreseeable future” and that group bookings for the second half of 2021 exceed 2019 by 20%.
Wynn Resorts said its weekend occupancy through the summer is in the 90s percentage-wise. MGM Resorts said it’s expecting 93% occupancy in June and 99% in July, even with few international visitors. Sands Corp. has made similar comments about its Venetian and Palazzo resort properties.
That’s welcome news for a destination like Las Vegas that has been slow to recover after a 2½-month shutdown of casinos during the spring of 2020. That has ebbed and flowed ever since as COVID cases rose and fell across the country and capacity at casinos was trimmed to as low as 25% over the winter starting last Thanksgiving.
Concerts, sports, conventions, Resorts
The tide turned in March with an increase to 50% capacity in time for March Madness and to 80% on May 1. Visitation rose 45% from February to March but was still down 40% from March 2019. People who did show up gambled, with a casino gaming win of $1.06 billion — some 4% higher than March 2019.
The future demand can be also measured by the strength of ticket sales of summertime events. The July 10 Conor McGregor UFC fight sold out of its 20,000 tickets in 22 minutes. On the same day, Allegiant Stadium will host more than 60,000 people for a Garth Brooks concert.
Visitation is expected to get a boost when the long-anticipated $4.3 billion Resorts World Las Vegas opens on June 24 — the first Strip casino opening since The Cosmopolitan in 2010. Resort openings have traditionally brought an influx of visitors to check out the newest property.
Las Vegas is also getting an unexpected boost from conventions, which are normally a staple in the fall and winter but were postponed by COVID. The World of Concrete comes to Las Vegas June 8 and traditionally has about 50,000 visitors. Other conventions such as the National Indian Gaming Association will be held in July.
Brent Pirosch, a gaming analyst for CBRE, said May, June, and July are the strongest months historically when it comes to leisure travel to Las Vegas. This year, however, vaccine distribution and relaxed travel restrictions coincide with those trends along with pent-up demand and people having more money to spend because of their stimulus checks and belated tax refunds.
“We have a lot happening all at the same time,” Pirosch said. “I’m bullish on the summer. We have a lot of opportunity to execute on the promise of a great comeback story. All of the pieces are in place, and the more non-gaming amenities we open the better. That’s the missing piece. There will be things for people to do while they’re here from shows to restaurants.”
Pirsoch said casinos “did reasonably well” in weathering the loss of business from COVID-19 by cutting expenses and by attracting visitors who were strong gamblers. Las Vegas set a record in March for average win per gaming device/table at $322 per game per day, he added.
Brendan Bussmann, a consultant with Global Market Advisors, said the lifting of the mask mandate will only help Las Vegas tourism even more this summer. The casinos “weathered the storm during difficult times” of November, December, January, and February with a 25% capacity that put a strain on their operations, he said. “They learned to rework amenities that may or may not come back like buffets,” Bussmann said. “They have been able to cut costs down and evaluate, and that will help them come out stronger.”
From ‘cooped up’ to full casino capacity
And casinos are ready for those large crowds.
Josh Swissman, a consultant with The Strategy Organization, said this won’t be “a normal summer” for Las Vegas. As more people continue to get vaccinated in the coming weeks, that will spur even more travel beyond those who have made plans for now, he said.
Swissman said it’s great news that properties are saying their weekends are approaching pre-pandemic occupancies and that the same is true of room rates through the summer. The concern has always been about the weekdays that have been hurt by a lack of conventions, but that problem may be overcome in part by tourists looking for value who now seek out those days to come to Las Vegas, he said.
Casinos have already announced the return of entertainment in their venues to provide amenities visitors are seeking. Cirque du Soleil shows are among those that will be back in late June and early July.
“Full capacity for casinos means more exciting times,” Swissman said. “Not being required to wear a mask and all of the other reasons why people were waiting to come to Vegas is being chipped away. Now, entertainment is coming back and people feel emboldened to travel after being cooped up for the last 14 months. You will see a surge of tourism over the summer to accommodate that pent-up demand and increased desire to travel. And then there’s going to be a whole lot of people that want to come check out Resorts World. That is icing on the cake.”
Ready for takeoff?
The analysts said none of that can happen, however, without airlines boosting flights and seat capacity into Las Vegas.
That is already the case, according to Joel Van Over, a senior director with Ailevon Pacific Aviation Consulting, a firm that works on behalf of the Las Vegas Convention and Visitors Authority.
There were 2.57 million passengers who traveled through McCarran International Airport in March — 42% below the 4.4 million passengers in March 2019. A reduction in flights contributed in part to the decline along with decisions by people not to travel.
Some 50% of Las Vegas’ visitation comes from people who fly in, so a pick up in air travel is vital for a return to normal, Van Over said. Traditionally, 92% of that capacity is from domestic flights and the other 8% is international.
Airlines cut flights during the pandemic and the only international flights that have returned so far are from Mexico because of restrictions with other countries, Van Over said. So far, airlines have 85% of their pre-pandemic capacity for Las Vegas, and that will surpass 90% in June as part of the addition of 35 new markets and 4,500 daily seats, he said.
“The more non-stop destinations on your route map, the easier it is for people to get to Las Vegas, the more frequently they will come and choose the city over other places to go. If you don’t have the flight capacity in place, the recovery is slower.”
Currently, Las Vegas is No. 3 in the nation in handling passengers, behind only Orlando and Los Angeles, Van Over said. It serves 124 markets with 15 airlines.
“Las Vegas is beating out powerhouses like Atlanta, Chicago, and Dallas,” Van Over said. “We’re on the way to recovery, and we’re thrilled about that. Conventions are firing back up and shows are coming back and restrictions are lifting. This will all drive demand to Las Vegas. Airlines are giving us seats because demand will be incredible.”
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