June 26th 2022: Las Vegas has been on a bit of a roll recently as crowds have returned to Sin City after the disastrous couple of years or so because of the pandemic. The pend up demand as people are now able to travel again and, enjoy themselves without masks has been great for Las Vegas. The higher room rates after the pandemic didn’t scare off visitors but inflation, high gas prices and uncertainty about a possible recession might.
Even with the Feds rate hike to slow down inflation and, possible gas tax temporary cuts a full blown recession could be bad for Las Vegas. The added expenses we are all paying could make people think twice about the expense of a Las Vegas vacation. If traffic does slow down in Las Vegas as the economy takes a hit then come the layoffs; Las Vegas as a mostly tourist based economy could take a huge hit as we have seen in the past.
At the moment occupancy rates for Las Vegas are high which has mean’t the property owners have been able to premium room rates. A early sign of a downturn might be early signs that less people are driving in to Las Vegas from Southern California as well as people seem to be spending less while in town.
In recent times the ownership of the Strip Casinos has become more diverse instead of the two dominant companies as it has been for many years previous. It will be interesting to see if there is a downturn will the newer companies be more likely to lower prices to compete whereas in the past MGM and Caesar’s dominated the Strip so would be less inclined to do so.