Las Vegas Casino Room Rate Boost May Not Materialize in Q4
Posted on: August 26, 2025, 01:03h.
Last updated on: August 26, 2025, 01:27h.
- Operators previously confirmed Q2 weakness and forecast more of the same for the current quarter
- Q4 was supposed to be better, but as of today, softness is seeping into October bookings and room rates
As confirmed by downbeat second-quarter earnings reports from Caesars Entertainment (NASDAQ: CZR) and MGM Resorts International (NYSE: MGM), the Las Vegas Strip is experiencing a period of lethargy that’s carried over into the current quarter and that might not conclude in the fourth quarter as previously hoped.
In Truist Securities’ latest Las Vegas Strip room rate survey, analyst Barry Jonas notes “the early look into October is not all that encouraging,” potentially signaling the fourth-quarter salvation investors and operators were banking on won’t materialize.
That said, week-over-week trends are improving (Aug – Oct) (highlighting the shorter booking window) and company commentary points to November, where we don’t have data yet, for a positive rate inflection,” observes Jonas. “While the summer weakness was largely previewed by operators, we think a key question for investors in MGM and Caesars is whether a Q4 Strip inflection comes to fruition.”
That assessment arrives against the backdrop of tepid visitation and disappointing rev per available room (RevPAR) data – factors serving to depress investor sentiment toward Las Vegas Strip stocks. Jonas has “buy” ratings on MGM and Caesars, which are the two largest Strip operators.
Las Vegas Casino Room Rates Trending Down in Q3
Upon delivering second-quarter results, both Caesars and MGM told analysts and investors that the third quarter was unlikely to be much better than the prior period in Las Vegas, and that prognosis is proving accurate.
Jonas says using MGM and Caesars as the proxies, third-quarter Strip room rates are tracking lower by 5% year over year, with weakness seen on both weekends and weekdays. The analyst said that in July, Strip room prices declined 4% at MGM venues and 10% at Caesars properties.
Compounding those woes is the point that August room rates on the Strip will decline year over year, due primarily to weekend declines. Jonas says September is shaping up to be another weak month with both weekday and weekend prices pacing lower compared to the year-earlier period, potentially making it difficult for October to mark the start of a legitimate rebound.
“We are still seeing softness continue into October with rates trending lower Y/Y for Strip Proxy/MGM/CZR’s -5%/-14%/-12% respectively,” adds Jonas. “That said, management teams have more pointed to November as potentially driving any Q4 improvements. Overall, operators remain positive for Q4 and 2026 given the stronger event/convention calendar.”
Other High-End Strip Properties Showing Positive Signs
On the Strip, it’s not all doom and gloom because outside the proxies of Caesars and MGM, there’s evidence that room rates at some higher-tier properties are holding up well. Casino hotels in the “other high-end” camp are generally defined as those with average nightly rates of $250 and up. Jonas says that cohort is comprised of Fontainebleau, Venetian/Palazzo, and Wynn/Encore.
For Q3, ‘other high-end’ rates are up +8% Y/Y and +16% Y/Y in October, which is consistent with higher-end consumer behavior trends we have been seeing this year,” observes the analyst.
This reporter recently visited Fontainebleau on a Tuesday afternoon and can confirm a high level of foot traffic at the venue as well as brisk activity in the casino, including in the high-limit area.
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