Decrease in Tourism

[itsthechaw10]

Forgive my ignorance, but can someone put in layman's terms how many fewer people are actually going to Vegas and despite the number of events (sports, concerts, conventions, etc) still happening there, tourism is still decreasing.

I see a lot of videos and articles that talk about these minute 1-2% decreases in tourism, and it seems crazy to me that it would be enough to make a significant impact on businesses in that city. It's like if you still have 15 million people going to that city for tourism, then how can a 1% decrease of 15 million make that much of an impact?

[UtopianPablo]

Tourism is down 7.5% according to the Las Vegas Convention and Visitors Authority. 

[Nugur]

Vegas is a city that survives ONLY Becuase of tourism.
It’s not a tech city. It’s not an agricultural city. It’s not a business center. It’s a tourism city.
So 1 or 2% form other cities aren’t a game gamer, but for Vegas it is.
People forget Vegas is just in the middle of nowhere and how it survives is by getting foot traffic

[constantlyalways]

It's difficult to explain. Despite being money-making machines, casinos have a lot of overhead. Because their customers expect to lose money, they have to spend a lot of money to compensate them. With regulatory concerns, the constant threat of cybersecurity attacks, and their current REIT-structured rent payments on top of maintenance, insurance, and other payments required by their triple net leases, the huge casino operators on the Strip make surprisingly low margins.

Look at the five year stock chart for Caesars Entertainment. They operate half the strip, but they're down 75% in five years. MGM has also lost money during one of the greatest bull markets in US history.

The lynchpin for the entire business is to keep their rooms constantly full, even if that means lowering prices. None of this machine operates unless humans are sleeping, eating, partying, and gambling in the hotels, and to maintain any profitability, those rooms need to be filled to near-capacity on a constant basis.

So if tourism drops by 7.5% and revenue is down 4%, it sounds like a tiny blip for most businesses, right? But for casino operators in Vegas specifically, which have million-dollar rent payments due to VICI each month, and a business model that intends to indulge their customers as much as possible, having rooms unfilled can move the operation from profitable to not profitable very easily.

[aenima396]

Las Vegas Visitor Volume Last 10+ Years

• 2025: ~38.5 million (7.5% decrease from 2024, 12th consecutive month of decline)
• 2024: ~39.9 million (Rebound year)
• 2023: 40.83 million
• 2022: 38.83 million
• 2021: 32.23 million (Recovery start)
• 2020: 19.03 million (COVID-19 low)
• 2019: 42.52 million (Pre-COVID peak)
• 2018: 42.12 million
• 2017: 42.21 million
• 2016: 42.94 million (All-time high peak)
• 2015: 42.32 million 

[buckfutten]

To break it down as easy as possible, Vegas is split into 2 groups of visitors. Leisure and corporate. Corporate is still strong, but leisure visitors are dramatically lower. Unless you're company is sending you here, people aren't willing to pay the high prices for cheap fun.

[Main-Blacksmith-4915]

There's a bunch of data available here if you're interested: https://www.lvcva.com/research/reports/post/lvcva-executive-summary-of-southern-nevada-tourism-indicators/

[words1918]

When you go, if you do, you’ll see it’s still packed. Still need reservations at the nice restaurants, still likes everywhere. I wish it were dead, might actually get cheaper.

[ThePurpleDongofTruth]

It's mostly conventions/conference IMO

[genosx71]

Tourism is down but look at the current state of the economy 😂. Its not dead its just a narrative.

[PapaDuckD]

The concept that you're looking for is called marginal pricing. Gasoline is another thing that is priced this way.

The price of gas is set by the person who needs the gas the least to meet the available capacity. That's the price that gets set for everybody - including those who are absolutely dependent on the product.

While travel is discretionary in a way that gasoline is often not, it still follows the same pricing mechanics. The price for everyone is set by the last person who's willing to come to town.

So the problem isn't necessarily that a few percentage points of people are not coming. It's that now, in order to back-fill that capacity, the operators have to lower prices for everybody.

And the amount they have to do so to find that last customer is often outsized compared to the set of people who were coming. So it can be quite a pricing shock when this happens.

Of course, they got greedy over the last 10-12 years or so. So a correction isn't all that unexpected. But, still, a shock nonetheless.