Softer Demand, Hotter Temperatures and Fewer Visitors Prompt Short-Term Downgrade — Yet 2026 Outlook Remains Bright
It’s been a bumpy ride for Las Vegas Strip casinos this summer. CBRE has trimmed its earnings projections for both Q2 and Q3, citing sluggish visitor numbers, dwindling mid-week occupancy and less-than-ideal macro conditions. But not all is lost — the firm is sticking to a more optimistic view for Q4 and well into 2026.
John DeCree, CBRE’s equity research director, laid out a picture of short-term pain followed by long-term promise. The Strip, he says, is showing seasonal strain, with high heat and economic headwinds putting pressure on value-focused tourism — the bread and butter of summer travel.
Strip Traffic Cools Alongside Summer Demand
DeCree didn’t mince words. “Trends have softened throughout the second quarter,” he said. That’s not unusual for this time of year — summer in Vegas is brutally hot — but the numbers are making investors sweat.
Through May, visitor volume is down 6.5% compared to last year. Revenue per available room (RevPAR) has fallen 5.9%. And while gaming revenue has dropped only slightly at 1.1%, that figure masks deeper volatility beneath the surface.
The summer slump has been particularly tough on more affordable properties, which lean heavily on budget-conscious guests and weekday convention traffic — two groups that are thinning out.
Not Just the Weather: What’s Driving the Drop?
It’s not all about the temperature, though. DeCree points to several overlapping reasons why the Strip is under pressure.
One of the biggest issues is a dip in international travellers. Visitors from Mexico and Canada — traditionally strong feeder markets for Las Vegas — are arriving in smaller numbers. At the same time, there’s growing unease about tariffs and general economic direction, particularly in the U.S., that might be keeping some would-be tourists at home.
Then there’s the cost creep. Vegas used to be cheap fun — not anymore. Everything from show tickets to bottled water has gone up in price.
And that’s having real effects:
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Budget travellers are staying home or shortening trips
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Convention attendance has dipped, especially midweek
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Luxury properties are holding up, but middle-tier hotels are struggling
Luxury Hotels Prove More Resilient — For Now
Not all properties are suffering equally. DeCree made clear that higher-end venues are still pulling their weight. Visitors with deeper pockets are less likely to flinch at rising prices or travel uncertainty.
It’s the mid-tier and economy hotels that are feeling the squeeze — especially midweek, when convention bookings used to fill the gap. Without them, room occupancy has dropped, and casino floors are noticeably quieter.
There’s no quick fix for that. And while new events and residencies may boost demand later in the year, there’s a growing sense that Las Vegas needs more than just big weekends to stay afloat.
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A Look at the Numbers
CBRE’s update came with a few clear data points, giving shape to the slowdown. Here’s what the Strip’s 2024 performance looks like through May:
| Metric | Change (Year-over-Year) |
|---|---|
| Visitor Volume | -6.5% |
| RevPAR (Revenue Per Room) | -5.9% |
| Gaming Revenue | -1.1% |
| International Visitation | Down (est. -8% from MX/CA) |
| Midweek Occupancy (Budget) | Significant Drop |
The table tells its own story: it’s not a collapse, but it’s clearly not growing either.
Fourth Quarter Could Spark a Rebound
Here’s where it gets interesting. Despite the gloomy summer numbers, CBRE isn’t ringing the alarm bells for the long term.
DeCree said the firm expects improvement starting in Q4. That’s when the Strip tends to benefit from a fuller events calendar, stronger convention season and — crucially — cooler weather that makes walking around bearable again.
Holiday travel and year-end corporate gatherings could provide a meaningful bump. And with several new shows, residencies and restaurants opening in the final stretch of the year, the Strip may finally get back its buzz.
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Long-Term View: 2026 and Beyond Looks Brighter
CBRE isn’t just looking at the next few months. Their forecast for 2026 is upbeat. DeCree believes structural demand for Las Vegas as a leisure and entertainment destination remains strong, even if the current year feels sluggish.
Key drivers behind their positive 2026 outlook include:
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Continued diversification of entertainment beyond gaming
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Growing interest in Las Vegas as a sports city
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Expected return of international travel volume
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Investment in mid-week business travel and conventions
Yes, there’s uncertainty — there always is. But CBRE appears confident that once current headwinds pass, Las Vegas is still well-positioned to thrive.
