The Las Vegas Strip is expected to report its sixth consecutive month of year-over-year gaming revenue declines when December’s figures are released later this month. However, analysts remain optimistic about the Strip’s future, especially as 2025 approaches with promising growth projections.
A Tough Year for the Strip’s Revenue
The Strip’s gaming revenue for November 2024 reached $788.7 million, reflecting a 3.9% decline compared to November 2023’s $820.8 million. This downward trend has placed the Strip’s total annual gaming revenue down by 0.8%, marking a challenging year overall.
Factors contributing to this dip include two fewer weekend days on the slot accounting calendar in 2024 and a reduced baccarat win rate. According to Deutsche Bank analyst Carlo Santarelli, the December comparison is expected to be tough, as baccarat hold in December 2023 stood at an unusually high 22%. He predicts a high single-digit year-over-year decline for the final month of 2024.
Baccarat and Room Revenue: Key Players in the Decline
Barry Jonas, an analyst with Truist Securities, highlighted the role baccarat played in November’s revenue dip. Baccarat win fell by 18%, while overall visitation rose by 1%. However, Strip revenue per room dropped by 22%, largely attributed to underwhelming performance during the Formula 1 (F1) event, which failed to meet revenue expectations.
Jonas noted that despite this headline softness, the Strip’s underlying performance showed more normalised results. “Strip operators sound optimistic for growth in 2025, even while acknowledging the tough first-quarter comparisons posed by the Super Bowl,” he said.
Caesars Entertainment’s management shared this optimism, citing strong cash room revenue in December as a positive indicator. Jonas added that Las Vegas operators foresee more consistent trends moving forward, bolstered by a robust calendar of group events.
Looking Ahead to 2025
Casino consultant Brendan Bussmann of B Global believes that while 2024 posed challenges, the market’s fundamentals remain strong. He pointed out that major events like the inaugural F1 race in 2023 made year-over-year growth comparisons particularly difficult for 2024. Additionally, economic uncertainty and inflationary pressures weighed on consumer spending.
“This is about the long game,” Bussmann remarked. “While short-term numbers fluctuate, the Strip has demonstrated resilience over the years.”
According to analysts, the outlook for 2025 is promising. January is expected to show year-over-year growth, buoyed by the Consumer Electronics Show (CES). February’s figures may dip due to the Super Bowl comparison, but overall, operators are confident about a strong 2025.
- Event Calendar: A packed schedule of conferences and events, including CES and ConAgg, promises to draw large crowds.
- Foreign Visitors: Increased international travel is adding to the Strip’s visitor numbers, even as domestic tourism sees a slight dip.
- Economic Resilience: Despite past recessions and inflationary pressures, gaming revenue has remained robust.
Challenges and Opportunities
While the Strip’s visitation numbers are rising, Bussmann noted that domestic visitation is slightly down. Foreign visitors, however, are arriving in greater numbers, helping to offset the decline. This shift presents both challenges and opportunities for the industry, as it adjusts marketing strategies and services to cater to a more global audience.
Another challenge is maintaining momentum in a competitive market. With more entertainment hubs emerging worldwide, Las Vegas needs to continually innovate to retain its status as a premier destination for gaming and events.
2025: A Year to Watch
As the Strip navigates through short-term revenue challenges, the long-term outlook remains bright. Operators are banking on a strong 2025, supported by a full calendar of group events and a return to more stable economic conditions. Bussmann summed it up best: “2025 will be solid, but the economic environment will ultimately determine just how good it gets.”
The industry’s ability to adapt, innovate, and attract diverse audiences will play a crucial role in defining its success in the coming years.
