As Las Vegas continues to deal with a stagnant economy, $7 billion in major construction projects are expected to be completed within three years and help revitalize the Strip.
The A’s baseball stadium headlines Sin City’s renaissance, along with a new Hard Rock and the redevelopment of the former Tropicana. Wall Street gaming analysts believe that the city’s recovery will come in due time once those projects are finished.
Truist Securities Managing Director Barry Jonas and CBRE Director of Equity Research John DeCree recently discussed the state of the city’s gaming industry before the Economic Club of Las Vegas.
“When we look at some of the demand issues, and visitation is down, it’s temporary in our view,” DeCree said. “We think people will come back. If they don’t come back this year or next year, they’ll certainly come back in 2028 when new things open, and there’s more to see. We’re having a struggle now, but that’s going to change. All the private and public money invested in Las Vegas is a good indicator of future demand.”
The NBA is also exploring potential expansion to Las Vegas, which would be another boon for the city.
“You talk to folks who don’t come to Las Vegas, and they want to come to see the Sphere,” DeCree said. “They’re waiting for their favorite band. So the next thing, whether it’s the NBA or A’s, will absolutely draw people to the city. At the end of the day, they will come, because you can get it all here.”
Economic Challenges Persist in Sin City
In 2025, Las Vegas saw visitor volume of 38,545,700, down 7.5% from the previous year, according to the Las Vegas Convention & Visitors Authority (LVCVA). Outside of the pandemic, that marked the largest decline since the LVCVA started tracking visitation in 1970. For comparison, the highest annual visitation, 42,523,700, occurred in 2019.
Despite the decrease, Las Vegas Strip gaming revenue totaled $8.8 billion, which marked a new annual record. Those who visited Las Vegas spent more during their trip, too.
- 81% of visitors gambled
- The average gaming budget rose to $848 last year
Total hotel occupancy was down 3.3% YOY, with convention attendance off slightly at 0.1%.
The LVCVA’s recent visitor profile survey revealed a troubling trend. Less than 10% of all visitors last year said it was their first trip, down from 15% the previous year and 24% in 2022.
“In an inflationary environment and concerns over a recession and tariffs, it’s easier to put off a Vegas trip and spend a little more time at home,” Jonas said. “We’re coming into summer, and the real test will be can we return to growth. The event calendar is very strong this year, and records are being projected across the board. I’m not modeling growth for the large Vegas operators, which shows that the leisure segment is still hurting to a certain degree, largely at the lower end.”
The recent survey found that 44% of visitors reported a household income of $150,000 or more. It’s lower- and middle-class visitors that Las Vegas is still having the most difficulty attracting.
“Vegas is great at reinventing itself,” DeCree said. “Some of the companies are working on ways to better appeal to that customer segment. The high-end segment drives so much revenue and cash flow that we often forget about that segment, or not pay attention to it. It’s 7% to 8% visitation, and let’s find a way to get that customer back.”
February Marks Bright Spot for Monthly Numbers
February’s visitation total in Las Vegas was 3.03 million, which was up 2% year over year. That marked the first increase since 2024. Additionally, the Nevada Gaming Control Board’s report for February revealed that the Las Vegas Strip’s gross gaming revenue was level YoY at $696.2 million.
Baccarat was a key performer along the Strip, with operators raking in $119.9 million in winnings. That reflected a 37% increase over the same period last year.
Looking forward, April is anticipated to be softer, but a heavy concert calendar in May is expected to provide a boost.
The Sphere has proven to be a bright spot during the Las Vegas downturn, with high-profile bands like U2 and the Eagles taking residency. The Sphere has also benefited from films such as The Wizard of Oz and Postcard from Earth, which together generated $550 million.
Jonas sees the “possibility of business growth in the second quarter, aided by softer comparisons over the summer months.”
“We think there is lots of programming planned to address the low-end softness,” he said.
Additionally, the LVCVA and operators are pushing a “value-oriented message” to combat the prevailing sentiment of gouging that hurt the city’s tourism industry in 2025.
“We’ll see how this evolves into summer 2026, though there’s always a risk of increasing occupancy at the expense of rate to drive what could ultimately be a lower-quality customer that isn’t all that additive,” Jonas said.
Final Analysis
While operators are cautiously optimistic about the future, the majority of Strip venues are expected to see uneven gains in the short term.
“The high end – Wynn, Bellagio Caesars Palace – you are not hearing about struggles there,” Jonas said. “It’s the low end. The comps will ease, and some initiatives by these companies will address some issues. But what about the war in Iran and rising gas prices? You can see a pathway to returning to growth, but not without risks.”
For his part, DeCree concluded on a more hopeful note.
“The consumer in the U.S. is resoundingly resilient and likes to spend money, especially on experiences,” DeCree said. “We’re seeing consumers spend the same since the war in Iran started. That could change the longer it persists, but for now, the consumer is going about their business, particularly when it comes to entertainment and hospitality.”
That’s what Las Vegas is banking on heading into an uncertain future.
