Las Vegas hotel revenue generated from business and leisure travelers this year will exceed pre-coronavirus pandemic levels, making the US casino mecca one of a small number of domestic cities to check both boxes.
The Las Vegas Strip. The city is one of a small number that will see increased business and leisure hotel revenue in 2022. (Image: CNN)
In the travel and leisure industry, airlines, hoteliers and other sub-groups separate business and leisure travelers into two distinct groups. That differentiation is particularly important in Las Vegas. Since the 2020 reopening of casinos following the onset of COVID-19, weekend occupancy rates (leisure) have been strong. But Sunday through Wednesday (convention travelers) occupancy has been bumpy.
US hotel leisure travel revenue is projected to end 2022 14% above 2019 levels, while hotel business travel revenue is expected to come within 1% of 2019 levels, according to the American Hotel & Lodging Association (AHLA).
Looking at the top 50 domestic markets, 80% will see leisure travel revenue exceed 2019 levels this year. But just 40% will be able to say the same for business travel sales.
Las Vegas Hotel Biz Stacks Up Favorably
As the casino center of the US and home to a slew of entertainment options, sporting events, and high-end restaurants, Las Vegas has some advantages other cities do not possess in terms of fostering top line hotel growth from business and casual travelers.
As such, Sin City is one of just 18 metropolitan areas that will experience hotel revenue growth this year from business travelers and tourists. Reno is also on that list.
New data from the Reno-Sparks Convention and Visitors Authority (RSCVA) indicates the region, which includes Reno, Sparks, and Incline Village, are benefiting from higher room rates. Yet there’s still work to be done to return to pre-pandemic occupancy levels.
Data from the Reno-Tahoe Airport Authority confirms year-to-date arrivals at the Reno-Tahoe International Airport are easily eclipsing pre-pandemic levels. This year, first-quarter passenger traffic at the airport was 74.2% ahead of the same period a year earlier.
Other cities in that group include Austin, Miami, Nashville and Phoenix, according to the AHLA.
More Positive Signs for Las Vegas Business Travel
It’s undoubtedly helpful to operators’ bottom lines that weekend occupancy rates on the Strip remain strong. But analysts view an uptick in convention and meeting business going forward as essential to the fortunes of some gaming companies.
Among those are Circa (downtown), Caesars Entertainment, MGM Resorts International and Wynn Resorts – all of which have new or lightly used convention space. Fortunately, there’s evidence suggesting next year could bring a positive turning point regarding increased business traffic in Las Vegas.
At Deutsche Bank’s 30th Annual Leveraged Finance Conference last month, MGM CFO Jonathan Halkyard said meeting and convention enthusiasm is returning to normal, and bookings to that effect are strong through the second quarter of 2023.
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