Las Vegas mega-resort chains like Caesars and MGM are feeling the heat.
It’s fair to say Las Vegas is facing a troubling paradox after August saw visitor numbers to Vegas slump to its eighth consecutive month of year-on-year declines, yet remarkably, its gaming revenues still managed to jump by 5.5%.
In total, August visitation numbers fell 6.7% in comparison to August 2024, with year-to-date totals dropping by 7.8%, tantamount to 2.2 million fewer visitors so far in 2025.
Hardest hit from the downturn has been the convention and leisure travel domain. Attendance at Vegas trade shows also fell by 8% in August, although this was largely attributed to the 38,000-person World Market Center having been held earlier in the year.
Hotel occupancy only managed to average 77.5% in August, marking a three-point drop from last year. Furthermore, both Vegas’ average daily rates (ADR) of $162 and revenue per available room (RevPAR) of just $126 ceded sizable deficits, falling by 7.4% and 11.7% respectively.
Almost certainly, a root cause of Vegas’ ongoing decline in occupancy rates has been the simultaneous drop in air travel to Sin City. August saw a 6% reduction in domestic travelers passing through Harry Reid International Airport, while international passenger numbers also fell significantly by 3.7%.
Nonetheless, the most notable drop-off was the absence of Canadian air travelers, with WestJet (TSX: WJA) reporting a 33% fall in passengers flying into Las Vegas, with Air Canada (TSX: AC) reporting a 40% decrease. Although analysts suggest this trend correlates with the ongoing geopolitical disputes brewing between the U.S. and Canada.
Healthy gaming revenue unwittingly defies downturn
Despite the rather gloomy reporting, Nevada’s casinos countered the declining visitor numbers by posting their third consecutive month of gaming revenue growth. In fact, statewide gross gaming revenue surged to $1.22 billion in August, a marked increase of 5.5% over last year.
August 2025 Gaming Revenue
| Market | Total Revenue | YoY Change |
| Nevada (Total) | $1.22 billion | + 5.5% |
| Clark County (Total) | $1.03 billion | + 5.3% |
| Las Vegas Strip | $679.3 million | + 5.5% |
| Off Strip | $142.3 million | -1% |
| Strip Baccarat | $114.4 million | + 51% |
Inevitably, the Las Vegas Strip led the way after it reported $679.3 million in gaming revenue, which equated to a 5.5% increase.
Of the Strip’s impressive gaming performances, Baccarat has become the latest genuine revenue generator for Las Vegas operators. Incredibly, the gaming format generated over $114.4 million on the Strip alone in August, producing a stunning 51% YoY return at in-person casino venues, in spite of falling visitor numbers.
Conversely, the Las Vegas locals market – which once outshone the Strip during Vegas’ post-pandemic recovery – is now lagging behind. Of this, non-Strip gaming venues recorded a 1% drop in August revenues, down 2% for its fiscal YTD, making it Nevada’s weakest gaming sector.
What does this all mean for investors?
From an investor’s standpoint, Vegas’s bifurcation presents both potential gains, albeit with inherent risk attached.
Whereas casinos are demonstrating an adeptness in extracting more value from fewer visitors, additional factors such as the impending rise of labor costs, escalating REIT rents, and stubborn inflation numbers will inevitably add pressure to existing margins.
Undoubtedly, despite the uptick in gaming revenues, the slowdown in Vegas footfall appears to be reverberating around Wall Street, with several major Vegas-centric stocks struggling to gain any momentum since the dip. Of these, Caesars Entertainment (NASDAQ:CZR) has seen its stock price plummet 20% YTD while MGM Resorts (NYSE:MGM) has also dropped by nearly 1% since the beginning of the year. The Las Vegas Sands Corp (NYSE: LVS) is the one outlier with a gain of 4.5% YTD, but that seems in part thanks to its presence in the Macau market.
That being said, for now at least, Las Vegas remains profitable following back-to-back-to-back YoY revenue surges – however, investors may be in two minds as they wait to see if Vegas can reverse its slump in tourist numbers.
