CBRE adjusts Q2 and Q3 earnings projections for the Las Vegas Strip, anticipating increased revenue in Q4 and 2026.
Las Vegas Strip Casinos Show Resilience Amidst Economic Challenges
The Las Vegas Strip, once known primarily for its gambling establishments, has evolved and diversified over the years, becoming more resilient to economic cycles. This transformation is evident in the broader customer base, which now includes live music, sports tourism, and a robust group and convention calendar.
However, the leisure trends have not been without challenges. According to John DeCree, director of equity research at CBRE, the macroeconomic and political climate seems to be impacting leisure demand. This impact is reflected in the 3.5% year-over-year decline in non-gaming revenues for Las Vegas Strip resorts in Q1 2025. Despite this, casino revenue in the region surged, indicating gaming remains strong.
One of the key players in this market, MGM Resorts International, is investing heavily in property renovations and digital expansion. The company's digital arm, BetMGM, saw a 34% increase in net revenue in Q1 2025, and targets $2.4–2.5 billion revenue for 2025. Domestic initiatives include pursuing new gaming licenses and strategic partnerships, such as the Marriott licensing agreement, which leverages loyalty programs with 50 million members to boost room rates and spending.
International visitation to the US, including Nevada, has increased by over 36% between 2020 and 2025, supporting casino revenue growth. In the near term, DeCree attributes the slowdown to lower international visitation, tariff headlines, macroeconomic uncertainty, and cost creep in Las Vegas. However, he sees the opportunity for upside in the shares of Caesars and MGM, due to their diversified business models and digital EBITDA base expansion.
Looking ahead, DeCree maintains a Buy rating on Wynn and raises the price target to $135 from $125, citing Wynn Al Marjan Island opening early 2027. He expects incremental upside in Golden's shares from a visitation/occupancy recovery on the Strip or external growth opportunities. Longer term, Las Vegas is poised for further growth in these segments with major developments.
In contrast, DeCree downgraded Golden due to current valuation, but remains constructive on the company's balance-sheet strategy. He downgraded the second- and third-quarter Strip estimates for Caesars Entertainment, MGM Resorts International, Wynn Resorts, and Golden Entertainment. Despite this, he predicts a strengthening in the fourth quarter and the start of 2026.
In summary, commercial casinos in Las Vegas and Nevada show sustained resilience boosted by digital innovation, property upgrades, and international tourism recovery. The macroeconomic improvements and increased global travel underlie positive projections for the remainder of 2025, especially in Q2 and Q3 earnings periods.
In the face of economic challenges, the Las Vegas Strip's resilience is demonstrated by its continued strength in casino-games revenue, despite a 3.5% year-over-year decline in non-gaming revenues for Las Vegas Strip resorts. Furthermore, the business landscape of Las Vegas has expanded beyond traditional casino-and-gambling activities to include live music, sports tourism, and digital expansion, as evidenced by MGM Resorts International's investment in BetMGM.
