Las Vegas is currently experiencing one of the steepest performance declines among major U.S. hotel markets this summer, primarily due to a drop in international visitors and a general economic uncertainty that is impacting leisure travel.
According to preliminary data from STR, hotel occupancy in Las Vegas fell by 14.9% in June. If confirmed, this decline would represent the largest monthly drop for the city this year.
This downward trend continued into July. For the week ending July 5, Las Vegas recorded a staggering 16.8% drop in occupancy, which fell to 66.7%. Revenue per available room (RevPAR) also suffered a significant decline of 28.7%, landing at $102.75.
This stark decrease in Las Vegas hotel performance is not only affecting the local market but is also contributing to a broader decline in overall U.S. hotel metrics. Without Las Vegas’ poor performance, the country would have likely experienced a flat RevPAR rather than a contraction for the same week.
The situation reflects a pattern noted in earlier months. In May, data from the Las Vegas Convention and Visitors Authority (LVCVA) indicated a 6.5% decrease in visitor volume year over year, totaling around 3.4 million visitors.
Stephen Miller, director of research at the Center for Business and Economic Research at the University of Nevada Las Vegas, observed that this decline points towards a troubling slowdown. According to him, the level of uncertainty in the travel market is significantly higher than it was just six months ago.
Miller identified the drop in international visitors, particularly from Canada, as a key factor causing these declines. Data from the U.S. International Air Travel Statistics program illustrated that Las Vegas has seen a consistent downturn in overseas arrivals, with only January reflecting any growth compared to the previous year. The decline became notably sharper in June, with international visitor arrivals down by 13.2%.
John DeCree, head of institutional investor research at CBRE Capital Advisors, acknowledged similar trends in international arrivals but suggested they fall within the realm of a natural market cycle. He noted that Las Vegas typically sees a seasonal slow down during the warmer spring and summer months and that the current trends may just signify a return to normalcy after a span of elevated pent-up demand.
LVCVA CEO Steve Hill expressed that economic challenges facing the city are reflective of a broader national trend rather than being exclusive to Las Vegas. He highlighted the low levels of consumer confidence that are suppressing demand for leisure travel.
“The uncertainty that has been injected into the market has caused many budget-conscious travelers—who make up a significant portion of our visitors—to reconsider their travel plans,” Hill commented. He added that the LVCVA had foreseen a “relatively soft summer” and took proactive measures in the form of a 30% increase in annual marketing spending, the largest increase in both percentage and dollar terms in the organization’s history.
The marketing efforts emphasize that Las Vegas offers something for every budget, while the LVCVA has also significantly increased its investment in various Online Travel Agencies (OTAs).
In response to the slowdown, several hotels in Las Vegas have begun rolling out promotional packages to attract visitors. For instance, Resorts World Las Vegas launched the All Resort, No Fees package, eliminating resort fees through early September, and also includes benefits like complimentary self-parking and nightly resort credits.
Shannon McCallum, vice president of hotel operations at Resorts World Las Vegas, noted the swift and innovative response to the observed market softness. Positive feedback from guests concerning the package indicates its effectiveness in drawing in more visitors, particularly locals.
The resort has also attempted to capture more daytime revenue through new programs like “power lunch” offers, which feature a prix fixe menu at select restaurants, and affordable day pass options for pools.
Hill lauded Las Vegas properties for their adaptability during slower periods, explaining that various resorts have different strategies tailored to the current market dynamics.
Additional value-focused promotions are evident throughout the area. For example, Sahara Las Vegas allows guests to opt for either the elimination of resort fees or a $50 daily dining credit. Meanwhile, Caesars Entertainment is offering discounts of 15% on room rates and 20% off spa services and attraction tickets.
The Strat has introduced a Summer of Value package featuring midweek rates of $49 and weekend rates of $99 that include all resort fees, taxes, and admission for two to the Tower Observation Deck. On the other hand, Circa Resort & Casino is offering a $400 All-In Summer Package that encompasses a two-night stay, $200 in dining and beverage credits, and a daybed reservation.
Despite the prevailing challenges, industry insiders remain optimistic for a turnaround in the fall and winter seasons. Hill mentioned that the upcoming meetings and trade show schedule from September through 2026 is quite robust, and convention attendance was up by 10.7% year over year in May, signaling some positivity amidst the leisure travel struggles.
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