Visits and hotel occupancy in Las Vegas declined in August versus the previous month more than it did in 2018 and 2019, as the Covid-19 Delta variant seemed to weigh on travel.
August visitor volume dropped by 9% in August versus July, to just under 3 million visitors, according to the Las Vegas Convention and Visitors Authority. In the corresponding period of 2019, before the pandemic, it dropped by about 3% to just under 3.6 million.
“We suspect the visitation tail-off in August relates to the Delta variant,” Barry Jonas, an casino operator analyst at Truist Securities, tells Barron’s.
The Delta variant in August affected various travel and leisure sectors, including hotels, airlines, and casino operators.
Speaking at an investor conference on Sept. 9, Jonathan Halkyard, chief financial officer of MGM Resorts International (ticker: MGM), said that the impact of the variant was mixed. “We’ve seen cancellations,” he said when asked about the Delta variant. “I think others have as well. At the same time, we’re seeking kind of near-record lead generation as it relates to group business.”
MGM Resorts International is the largest player on the Las Vegas Strip and operates regional properties in the U.S as well. It also has a presence in Macau.
Las Vegas hotel occupancy, meanwhile, totaled 72.8% in August, down from 79.4% in July. Occupancy there had been increasing every month this year, helped by a surge in leisure travelers.
Weekend hotel traffic held up relatively better in August, dropping by one percentage point to 87.1% from the previous month.
However, midweek hotel traffic was weaker. It fell to 67.8% from 74.6%. Midweek business in Las Vegas depends heavily on group and business travel, segments that have hit hard hit by the pandemic and slow to rebound.
Hotel occupancy on the Strip dropped by 6% to about 75% in August.
August traditionally has been a slower month in Las Vegas—but the August drop was bigger than it was in recent years.
In August 2019, for example, hotel occupancy dropped by nearly 4% from the previous month, and it fell by more than 3% in the corresponding period of 2018.
Shares of MGM Resorts International and Caesars Entertainment (CZR) have done relatively well recently, concerns about the Delta variant notwithstanding. MGM’s stock was up about 1% in September, versus a loss of nearly 5% for the S&P 500, and Caesars Entertainment gained about 11%.
Boyd Gaming (BYD), which caters more to the Las Vegas locals market, was up 3% over that period.
Write to Lawrence C. Strauss at lawrence.strauss@barrons.com
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October 01, 2021 at 11:52PM
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Vegas Saw Steeper Than Usual August Drops in Visits, Hotel Stays. Blame Delta. - Barron's
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