Weaknesses in Las Vegas Tourism Forces Strategic Re-Think, Especially Regarding Canada
Posted on: August 23, 2025, 02:12h.
Last updated on: August 23, 2025, 02:12h.
- Downturn in Las Vegas tourism prompts strategic re-assessment on how to attract customers
- Canadians travelling to Las Vegas less
- Pro sports boosting casino traffic
With Las Vegas casino operators reporting Q2 earnings in late July, a new report by Octus Research shone a spotlight on how both MGM and Caesars were experiencing a downturn in the number of customers, prompting a strategic reassessment on how they are attracting and retaining customers, and Canada is a big part of that.
Tourism Numbers Have Been Softening
Both resorts have been experiencing midweek softness, reduced visitation from international travellers, especially from Canada, and a weakening in their value-tier offerings, the report said, with one of the the key findings from the earnings report being that MGM and the industry in general will have to be more thoughtful about how to attract value-oriented customers.
There are those in Las Vegas now who scoff at the narratives that Vegas is in trouble, that the town is over-priced, and that younger people are less interested in going to there to gamble.
However Casino.org’s Devin O’Connor has written several pieces on the state of Las Vegas tourism, with July being the second-worst month of 2025 in terms of foot traffic.
Mixed Bag of Opinions on Sin City Tourism
According to the Octus report, summarizing the MGM and Caesars earnings, June 2025 visitor volumes fell 11.3%. Las Vegas visitor volumes have declined each month so far in 2025. MGM CEO William Hornbuckle suggested during MGM’s call that “value-oriented properties” that are more sensitive to economic swings are experiencing relatively greater ADR pressure.
Caesars reported 97% occupancy compared with 99% in the same period a year earlier. The company started with a “strong April,” then May and June began to decline. Caesars Entertainment CEO Tom Reeg said during the earnings call that “the forward booking numbers have stabilized, but that it was not ‘some huge bullish turn.’ Rather, more ‘as if your tire had a leak and you patched it.'”
Canada Part of the Challenge
There are a lot of factors impacting the decline of travel by Canadians to Las Vegas. Canadian airlines like Air Canada and WestJet have reported drops in the number of passengers flying to Las Vegas this year.
According to the Octus report: “Reeg said the company’s international business is softer, especially Canada. Caesars was down 27,000 room nights during the second quarter, and Canadians were a “significant piece of that,” even though they are only “3% or 4% of the total pie.” He added that when he looks at the business as a whole, the company’s consolidated performance does not suggest that there is anything particularly concerning about the U.S. consumer.
Steve Hill, President and CEO of LVCVA, said that Canadian visitation is down roughly 15% to date.
Kyle Owusu, CFA, Director of Credit Research at Octus, points to two determining factors regarding a continued Canadian visitation decline: The state of the Canadian economy and the extent to which Canadians remain upset with U.S. President Donald Trump, who has made public comments this year about how Canada would be better off as the U.S.’s 51st state, plus ramping up a tariff war with Canada.
Trump Anger Factor
Canadians are angry, and there has been more of a focus on travelling domestically, or to places like Europe, then travelling into the U.S., on top of a nation-wide movement to “buy Canadian” in grocery stores.
“My base case is continued year over year declines through the first half of 2026 before the year over year trends begin to stabilize in the second half of 2026, but it’s hard to forecast destination travel trends from Canada to the U.S. with any degree of confidence given the high degree of human emotion involved,” said Owusu.
“I think the shift in booking behavior will change how Las Vegas properties market to and price for Canadian visitors, but it depends on the asset,” he said. ““Canadian volumes represent a low-single-digit % of overall Las Vegas visitation so if certain assets are performing well enough with U.S. consumers, or U.S. consumers and other international travels ex-Canada, and operators think they can get away with holding firm with regard to price then they probably will.”
Restoring Las Vegas as a value destination as opposed to its reputation as a expensive luxury destination, factoring in criticism over high resort fees and high food and beverage prices, matters a lot, and will entice getting more Canadians to come back, Owusu added.
Restoring Las Vegas as a Value Destination
“That’s hard to quantify percentage-wise, but restoring the value destination appeal matters a lot. Vegas has benefitted from price increases for the past four years, especially within the hotel, food and beverage business line,” said Owusu. “Eventually you start to hit a ceiling regarding how much value you can deliver in relation to how much you’re asking people to pay.
“If we are heading into a more uncertain global trade environment, restoring value destination appeal probably matters with regard to most (if not all) destination assets that aren’t catering to high end or luxury consumers, and we appear to be heading into an increasingly uncertain environment, so I think restoring Las Vegas’ value destination appeal is going to be front of mind for operators in 2026.”
On a broader note, regarding travel to the Vegas Strip, Owusu mentioned that: “The key takeaway is for now, casinos catering to luxury customers have been spared from the pressure affecting destination travel.”
Pro Sports Teams Having a Positive Impact
Pro sports teams in Las Vegas is another important factor in luring Canadians to the city, according to a Toronto-based marketer, with the NFL’s Las Vegas Raiders about to start a new season, and the NHL’s Vegas Golden Knights ramping up in October.
The new MLB baseball team is set to land in an exciting new stadium, designed 33,000-seat, fixed-roof ballpark on the Las Vegas Strip where the old Tropicana Casino used to be, designed by Bjarke Ingels Group (BIG) and HNTB, an architectural firm, in 2028.
“The key for us is to bring players into the casinos,” said Lora Green, one of the managing partners at Casino Marketing Group in Toronto, an exclusive service, where her company puts together white glove, exclusive trips for her network of high-roller gamblers to luxury casinos like Caesars Palace.
“So having NFL, NHL, and MLB in Las Vegas is a great draw for clients. They can enjoy a live sporting event and go back to the casino and gamble, hoping their teams win and they win in the casino as well.”
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