Aside from the cruise industry, Las Vegas may have been hit harder by the Covid pandemic than any other business segment. Tourism stopped. Conventions were canceled and international travel shut down as the world tried to contain the virus.
Las Vegas only shut down for a short period, but when it reopened, the city's famous casinos dealt with mask mandates, health checks, and social distancing, You could visit your favorite Caesars Entertainment (CZR) or MGM Resorts International (MGM) casino, but it wasn't exactly the same.
Gaming tables had capacity limits, plexiglass kept people from interacting with each other, and masks were required. You could sit at a bar, but not next to another person, and, while restaurants were open, capacities were cut in half, and patrons had to put masks on when they weren't actively eating or drinking.
Las Vegas was open, but it wasn't business as usual. Conventions -- which fill casinos and drive up hotel prices -- were canceled and even when they sort of came back, it wasn't business as usual. The Consumer Electronics Show (CES) attempted to have an in-person show in January, but most major companies pulled out, and attendance hovered around 30% of normal.
An event that usually kicked off Las Vegas' busy season leading into the NFL playoffs, the Super Bowl, and then March Madness turned into a dud. That led to real questions about whether Sin City could make a comeback, but there are signs that Las Vegas has finally put the pandemic behind it.
Image source: Daniel Kline/TheStreet.
Las Vegas Starts Its Comeback
Nevada dropped its mask mandate just before the Super Bowl. That led to a bit of a Las Vegas comeback as people flocked to the city for the big game.
The state’s 179 books took $179.8 million in wagers in Super Bowl LVI, obliterating last year’s handle of $136.1 million and soaring past the previous record of $158.6 million set in 2018 in Philadelphia’s 41-33 upset win over New England," the Las Vegas Review-Journal reported.
It's possible that the Super Bowl marked a turning point for Las Vegas. The end of the mask mandate and the lessening impact of the omicron variant appears to have set the city up for a return to normal.
"This year there was a normal Super Bowl party environment with COVID-19 restrictions, including mask requirements, being lifted. … in addition to the continued acceptance of mobile sports wagering by customers, which allow the books to offer a wider variety of betting options with proposition bets and increased in-play wagering,” Nevada Gaming Control Board Senior Economic Analyst Michael Lawton told the Review-Journal.
Tourists Return to Las Vegas
Las Vegas has more iconic hotels than any city in the world. You can stay in the glitz and glamour of Caesars Palace or MGM Grand or the kitschy Vegas fun of New York New York or the Flamingo. You also have change coming with Ballys morphing into The Horseshoe, the Mirage turning into a Hard Rock-owned Guitar Hotel, and multiple new casinos joining the scene on both the Strip and downtown.
The city was devastated by the pandemic, but the numbers had begun to return even before the mask mandate was limited.
"For 2021, average hotel occupancy increased from January (31.6 percent) to October, the best month of the year (81.6%).," Las Vegas Convention and Visitors Authority and NGCB reported, according to the Las Vegas Review-Journal. "Weekends were at 48.3% in January (midweek 22.5%) and 90.4% in October, with the best midweek occupancy, also occurring that month (77.5%)."
Caesars CEO Tom Reeg sees positive signs for the year ahead and talked about them in his company's fourth-quarter earnings call.
Currently in Las Vegas, we are at our highest level of bookings since reopening. January and February have ramped up, it's almost like a switch was flipped, sometime late January, early February. Our bookings are up 20% on a month-over-month basis in the FIT and casino segment. We measure gross and net pickup, so gross pickup is how many aggregate rooms are booked in a day or a week or whatever period you're looking at, net pickup is bookings less cancellations. And if you look at our gross and net bookings 9 of our top 10 days since the pandemic reopening in Las Vegas happened in February with Monday being the highest that we have seen to date.
His Counterpart at MGM, Bill Hornbuckle, shared similar sentiments in his company's fourth-quarter earnings call.
"Cancellations are declining, and group lead volumes are normalizing. Forward hotel book has been stable over the past few weeks and are once again starting to outpace 2019 levels," he said. "I expect that given positive COVID trends in Nevada, we will start to see meaningful loosening of COVID restrictions in the very, very near future, consistent with what we have seen in other states. Furthermore, our weekends have remained very strong."
