Las Vegas Casinos Have No Recovery in Sight
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After the year Las Vegas casinos had in 2020, investors are looking for a recovery to take shape in the second half of 2021. There is still no convention business occurring in Las Las Nevada and little gambling going on.
Visitor volume to Las Vegas has plunged 64% from 2019 and 55% year to date. The airport had 22.2 million arrivals and departures last year, a 57% decline from 51.5 million people in 2019. Hotel occupancy for December was just under 31%, and for the year it was 42%. It's the lowest turnout in over 30 years for Las Las.
There is no real demand for in-person gambling in the current environment. New Jersey has some of the most oppressive guidelines in terms of public health rules. Even in Macao, China, casino operators are struggling.
The travel and tourism industry has been decimated. The American Hotel & Lodging Association predicts that U.S. hotels will add 200,000 jobs this year. Since last February, employment remains down 23%, or some 3.9 million jobs. Online gambling and sports betting may help individual casinos to survive.
MGM Resorts reported full-year earnings last week that showed revenue plunged 60%. New Jersey has quickly become the sports betting capital of the country. MGM's Borgata is the third-biggest sportsbook in the state, behind FanDuel and DraftKings. Wynn Resort is looking to expand its own market presence. Las Vegas Sands, which has long been against online gambling, may enter the picture.
There's little need to be physically present at a casino to gamble. Consumers are finding more opportunities in sports betting. Casinos have a long road ahead of them. They need smaller operations if they want to survive.
