Indy Gaming: International flights on the rise in Las Vegas
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I spent the last two weeks in South America — Rio de Janeiro in Brazil, Iguazu Falls on the Brazil-Argentina border and Machu Picchu in Peru. I will simply say it was an amazing trip.
Restoring direct international travel to and from Las Vegas following the pandemic was a top concern for the tourism industry. Given the numbers from March and recent trends, global visitation is returning.
Passenger volume at Harry Reid International Airport surpassed the 5 million mark during March — just the third time that lofty figure was reached and a sign that international visitation to Las Vegas may be fully rebounding from the pandemic.
The total included 314,577 international travelers, just the second time the airport has seen a number that high after the pandemic shut down international travel to the U.S. for nearly two years. In 2019, Reid Airport drew a record 3.8 million international passengers, an average of 317,186 travelers per month. In 2020, the overall international figure fell to just 781,280 passengers.
While the March 2024 figure still trails pre-pandemic numbers, the upward trend is a positive sign according to gaming, tourism and airport representatives.
“This year so far appears to be where we may fully recover from our peak,” said Brendan Bussmann, managing partner of Las Vegas-based B Global, adding that international guests “tend to stay longer either on business or leisure. This will further boost additional revenue and commerce.”
In 2019, Reid had nonstop service to and from 11 countries, including the United Kingdom, France, Germany, South Korea, China and Israel. By 2021, a blanket travel ban instituted by the White House due to the pandemic had reduced international airline service to Las Vegas to one country — Mexico. European Union countries were opening borders to vaccinated airline passengers. Several Canadian air carriers had retained their routes to Las Vegas, but halted service when the pandemic surged north of the border.
That same year, Clark County Director of Aviation Rosemary Vassiliadis told a U.S. Senate subcommittee that the government needed to create a roadmap that returned international travel routes. In November 2021, the airport welcomed its first flight from the United Kingdom in 20 months.
As of March, Reid Airport is offering nonstop service to and from nine countries.
Reid Airport is coming off two straight record-breaking years — 52.6 million passengers in 2022 and 57.6 million in 2023. Through three months, airport passenger volume is 1.7 percent ahead of a year ago.
As for international passengers, the facility drew more than 2.5 million in 2022 and more than 3.2 million in 2023. Through March, the airport is more than 26 percent ahead of 2023’s figure.
Nevada gaming revenue dip, poor Boyd Q1 results concern analysts
The timing for Boyd Gaming’s first-quarter earnings release wasn’t ideal.
Last Thursday afternoon, the casino operator reported an overall revenue decline (gaming and non-gaming) of 6 percent from its Las Vegas locals properties and a decrease of more than 5 percent from its downtown casinos for the first three months of 2024.
That morning, it was also revealed Nevada's March gaming revenue was down year over year, the first time in eight months the state’s casino industry reported a decline.
The investment community lumped together the two reports. As a result, Boyd’s stock price declined more than 15 percent on the New York Stock Exchange on Friday, losing $9.71 a share.
“There is no way to sugarcoat Boyd’s first-quarter earnings miss. It was broad-based and very surprising,” J.P. Morgan gaming analyst Joe Greff wrote in a research note, expressing concern “about the state of the low-end gaming consumer.”
He suggested Boyd’s locals' market was immune from any customer migration toward the new Durango Casino Resort in southwest Las Vegas, which opened in December.
Boyd CEO Keith Smith said during a conference call with analysts that the company’s Nevada casinos “faced market softness” in the year’s first two months. Still, he cited the Las Vegas Convention and Visitors Authority monthly report showing visitation grew less than 1 percent in March and is up 4.2 percent for the first three months of 2024 as evidence of a positive long-term outlook.
As for downtown Las Vegas, Smith said high-priced airline tickets kept the company’s Hawaiian business island-bound much of the quarter.
“We continue to have long-term confidence in the Southern Nevada market,” Smith said.
Revenue increases from Boyd’s online gaming operations in other states, and management fees from its Northern California tribal casino, kept Boyd’s overall quarterly revenue at a less than 1 percent decline.
But Nevada’s overall gaming results in March, particularly the neighborhood casino markets in Las Vegas, drew attention from analysts.
The Gaming Control Board said statewide gaming revenue fell more than 1.6 percent to $1.29 billion in March, and the Strip was off 1.2 percent to $715.8 million.
However, Boyd’s primary customer markets in Las Vegas saw significant declines. According to the state, downtown casino revenue dipped 12.9 percent, Boulder Strip (which includes Henderson) fell 9.3 percent and North Las Vegas was off 4.2 percent. However, the balance of Clark County was up 6.6 percent due to the December opening of Durango.
The control board said gaming revenue for the Boulder Strip and North Las Vegas combined are up less than 1 percent for the first three months of 2024. Downtown is off 3.4 percent.
Gaming and Leisure eyes other Vegas casino opportunities
Gaming and Leisure Properties, which owns the site of the now-closed Tropicana Las Vegas, has its eye on other Las Vegas investments.
Outside of the 35-acre Strip location that is planned for a $1.5 billion stadium to house Major League Baseball’s relocated Oakland Athletics, the real estate investment trust owns the land associated with M Resort in Henderson and two casinos in the Northern Nevada community of Jackpot — all operated by Penn Entertainment — and Tropicana Laughlin, which is operated by Caesars Entertainment.
“We continue to have an interest in not only Las Vegas but in downtown and in the locals market,” Gaming and Leisure Chief Development Officer Steven Ladany said on the company’s first-quarter earnings conference call last week. “It's an area where we don't have as much exposure.”
Gaming and Leisure is providing $175 million toward the demolition of the Tropicana, which closed April 2. Company officials said this month Bally’s Corp., which operated the Rat Pack-era resort, is still paying $10.5 million in annual lease payments for the site.
Bally’s officials say the company plans to build a new project in conjunction with the stadium. Truist Securities gaming analyst Barry Jonas suggested in a research note that Gaming and Leisure is evaluating other Bally’s casino locations as potential acquisition opportunities, but “needs more time and information before making any firm commitments.”
The drumbeat to reassess the growth of legal sports betting continues to get louder.
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Mohegan names its Las Vegas GM as the company’s interim COO
Joe Hasson, who has been general manager of the Mohegan Casino inside the off-Strip Virgin Hotels Las Vegas since its March 2021 opening, was named interim chief operating officer for Mohegan Tribal Gaming Authority last week. The company oversees eight casinos in the U.S., Canada and South Korea operated by the Connecticut Indian tribe. Hasson, who was previously COO of Station Casinos, was called the “obvious choice” for the interim position by Mohegan CEO Ray Pineault.
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Rio president departs due to health concern
Rio Hotel & Casino President Trevor Scherrer stepped down due to a health issue, Dreamscape Companies announced last week. Scherrer has overseen much of the off-Strip resort’s redevelopment since joining the company last year. He will remain with the company until a successor is named.
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Comedian Colin Jost at the 2024 White House Correspondents’ Dinner:
“People keep asking if our lives are better than they were four years ago. Of course, they are. Four years ago we didn't have online sports gambling. What more do you need? That's probably what's keeping the economy afloat, online gambling and Taylor Swift. Without those, we'd be in a recession right now.”
