Las Vegas Strip Sentiment in the Doldrums, Says Analyst
Posted on: July 21, 2025, 02:46h.
Last updated on: July 21, 2025, 02:58h.
- Ahead of Q2 earnings reports, Q3 already shaping up to be disappointing
- Analyst says RevPar, July rate checks trending downward
Shares of MGM Resorts International (NYSE: MGM) and Caesars Entertainment (NASDAQ: CZR), the two largest operators on the Las Vegas Strip, have notched impressive rallies of late, soaring an average of about 9% over the past month. Those rebounds may belie weakness in the US casino center, however.
In a report to clients on Monday, Deutsche Bank analyst Steven Pizzella noted investor sentiment regarding Las Vegas Strip operators remains depressed — the result of tepid visitation and disappointing rev per available room (RevPAR) data. Compounding those woes, which were highlighted ahead of an upcoming avalanche of second-quarter earnings reports, is the analyst’s forecast calling for downbeat earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) results for the current quarter.
Sentiment for the Las Vegas strip remains low, driven by: 1) year-to-date non- convention visitation, a proxy for leisure, down 8.3% Y/Y (May -9.0% Y/Y), 2) LV Strip RevPAR down 4.8% Y/Y in May, STR Las Vegas June RevPAR down 19.2% Y/Y, and STR weekly Las Vegas RevPAR down ~20% on average, the first two weeks of July, and 3) forward room rate checks that are uninspiring,” observes Pizzella.
He added average daily rates (ADRs) on the Strip could experience compression in the “mid- to high-single-digit range” over the summer months because leisure spending factors more prominently into the equation during that time.
Las Vegas Strip Casino Stocks Require Patience
Broadly speaking, casino stocks have performed admirably this year, notching impressive rallies off the post-Liberation Day lows. Still, investors in search of big gains with the group may need to exercise patience while waiting for a more sanguine macroeconomic environment to emerge next year and in 2027.
Both Caesars and MGM have long-term lease obligations across the Strip, levering the operators to interest rates. However, the Federal Reserve is proving reluctant regarding rate cuts, indicating that catalyst could be off the table for Las Vegas Strip casino stocks over the near term.
“Looking ahead, we believe the group outlook for 2026 through 2027 remains bullish with gains not only from group occupancy and rate, but also food and beverage/catering commitments,” adds Pizzella. “While a lot can change, we think the longer-term setup bodes well, and we believe the strength relates, to some degree, to share gains from other large group host city competitors, with technology-related business playing a role.”
Specific to Caesars, Wall Street estimates indicate the company could save as much $60 million in yearly interest expenses for every 100 basis points rates decline, but it could take some time for that benefit to come to fruition.
Still, elevated interest rates are likely weighing on Caesars’ ability to sell assets because some prospective buyers may need to finance those acquisitions. Higher rates push buyers’ financing costs higher, potentially keeping suitors at bay.
Digital Gaming a Bright Spot
While the Las Vegas Strip is contending with a challenging economic environment, iGaming and online sports wagering remain bright spots for the industry. From the investment perspective, that theme is better accessed via operators such as DraftKings (NASDAQ: DKNG) and Flutter Entertainment (NYSE: FLUT).
Likewise, market participants can defray some of the risk associated with a potential retrenchment in discretionary spending by evaluating shares of data providers Genius Sports (NYSE: GENI) and Sportradar (NASDAQ: SRAD).
“In addition, we note we have seen an uptick in interest for the sports betting data providers (SRAD/GENI), especially from longer-term oriented investors, which we believe are attracted to the predictable long-term fixed revenue growth, as 60% to 70% of the businesses are a fixed recurring revenue stream, growing at low to mid-teens compound annual growth rates,” concludes Pizzella.
Last Comments ( 21 )
My wife and I are from Alberta went to Vegas at least twice a year until this year. We vowed not to set foot in the US until their govt stops acting like assholes. Several of our friends have also decided to travel either in Canada or overseas. We were starting to think about vacationing elsewhere a couple of years ago as the casinos were gouging visitors so Trump’s policies and verbal assault just sped up our decision. Good luck recovering America.
Love the action and atmosphere but not enough to pay the insulting prices being charged for dinner, drinks, entertainment. Let's start at breakfast, coffee, juice and a croissant with tip 18 bucks for one. Lunch at the pool, a cocktail each and 2 salads plus tip 82 bucks, the flies were free. 40 bucks to valet. 300 for 2 tickets to see some high schoolswimmers diving into the water at one of those lame circus shows. I won't touch dinner. I remortgages my house for a steak the size of a grape, lol. Much better value on a cruise, Aruba, Hard Rock Fla. Etc
They love to blame the lack of international tourists while ignoring the fact that they’ve price gouged most people out of the desert. What’s the fun in going to Vegas when a basic room is $200/night, a coffee is $10, and a food court meal runs $20-$30?
It's no longer nickeling and diming us. It's now the ten and twenty dollaring us to death. Use to go 3xs a year, haven't been in 18 months.
With those prices they better get used to less business and I bet it gets worse
1. Get rid of the aggressive hookers dressed as showgirls and their aggressive pimps. 2. Put police foot patrols on the unwalkable strip. 3. Don't force people walking on the strip to wait 20 minutes for traffic to get in and out of Caesar's Palace. Don't make them walk through the lobby of a hotel. Don't make them walk through piles of homeless bodies. Don't force them to go up and down escalators. 4. No more hidden charges. 5. You shouldn't have to pay more than $500 for a decent, clean hotel room. 6. Open the strip up for new construction once every 10 years so that it's not forever under construction. 7. $40 for one person's breakfast at Denny's is stupid.
LAS VAGS IS THE NEW “price gouging capital” of the world! burger W/fries, a salad, OH…A small LATTE & A PASTRY…all averaging 30$ each plus.
I moved to Vegas in 1985. I paid $30 for 'event parking', at Venetian, even though I wasn't going to U2 at the sphere. $26 for a bottle of Fiji water has been reported at a MGM property mini bar, and YouTubers shooting each other in front of the Bellagio! You wouldn't catch me dead on the strip anymore! Corporate greed and thug behavior has ruined Las Vegas! Stay home and save your money people!
Was planning a 7 day Vegas trip for my wife and I in Sept. until my wife found out we can take a 14 day cruise of italy, including airfare for less than 7 days on the strip.....
Vegas has just gotten out of control pricing. Used to go regularly. Now it is off my list completely
Lived here for 60 years, these greedy casino's are going to price themselves out of existence with there ridiculous charges. They should be trying to attract folks, not scare them away with all these add on fees and parking charges etc.
I've been going to Vegas for a decade. Pre COVID I walked around wide eyed and in wonderment. I never paid for any fees or rooms because of the loyalty programs. My last visit in April I felt like a change was in the air. I actually enjoyed the less crowds but it felt like things were definitely changing. I still follow the loyalty programs and my offers seem to be ticking up more then my earlier visits. But do I really want to continue to go to Vegas when there are some many other gambling destinations out there.
They chased the buskars away, put railings and phinneals on every concrete structure that a person could stop ,sit, rest, mingle, and people watch, THEN blocked views of the iconic strip with racing bleechers.....BLEECHERS..... Who TF plans a vacation and says....."honey, let's go here, they have tons of bleachers to walk under, and cool road blacks and construction to look at? My wife and I were upper 7 star, and NOIR Vips for 11 years in a row. AFTER covid we left Vegas , and the 10-12.trips we made every year? Haven't been back in 4 years and won't go back. We don't have to pay all the fees, but it doesn't matter. The BIGGEST thrill Vegas ever had to offer was the excitement walking the strip. Which shit Casinos like Sahara, Fountain Blue and Resorts world? One may as well.go to a shopping mall. Vegas is BORING.
When "resort fees" and now parking add so much to hotel rates, it's no wonder that the hotels are getting less traffic. Why would anyone want to add $100 extra a day to hotel rate, and many hotel parking areas don't allow in/out either
"Both Caesars and MGM have long-term lease obligations across the Strip, levering the operators to interest rates. " I thought these are fixed amounts, not sure how interest rates would impact fixed costs