Gaming Industry Analyst Predicts Three-Year Recovery for Las Vegas Strip Casinos

Gaming Industry Analyst Predicts Three-Year Recovery for Las Vegas Strip Casinos

A gaming industry analyst at Macquarie Securities issued dire news this week regarding Southern Nevada. He believes it could be 2023 before the Las Vegas Strip returns to its pre-COVID-19 economy.

The Las Vegas Strip could be a shell of its former self for the considerable future. (Image: Las Vegas Review-Journal)

In a note released this week, Macquarie Securities gaming analyst Chad Beynon forecasts that it will be 2023 before Las Vegas bounces back.

We believe with a [COVID-19] vaccine, the Las Vegas market will see a quick recovery, and our bull case scenario points to 2023 being the break-even year, Beynon stated.

Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, told NBC today that a vaccine was likely by the end of the year. That s not soon enough for those on Wall Street, as stocks fell sharply. The Dow Jones lost 807 points its worst single-day since June.

Casinos on the Las Vegas Strip won $6.8 billion last year. The area welcomed 42.5 million visitors, including 6.65 million convention attendees.

Conventions are done for the year. Major shows that aren t descending on Las Vegas in 2020 include the Specialty Equipment Market Association (160,000 attendees), National Association of Broadcasters (90,000), and JCK (30,000).

The Global Gaming Industry , another 30,000 business visitors lost.

Long Road Back

No state economy relies more on tourism than Nevada. Tourism generated $19 billion to the state s gross domestic product last year and supports 450,000 jobs.

Both of those figures are in danger of being greatly reduced. Nevada s unemployment rate stands at 15 percent, and though that s down from 28.2 percent in April, it s still well above the 10.2-percent national average.

MGM Resorts has terminated 18,000 jobs nationwide, but the majority of the cuts are in Nevada. Numerous other casinos are parting ways for good with employees, as , and resort guestrooms stay unoccupied.

You can t have everyone working when you don’t have the business volume to support it, said Greg Chase, CEO of Las Vegas-based Experience Strategy Associates.

Even when people do return to Las Vegas, they might spend fewer dollars on their trips. A recent survey of likely future visitors conducted by Macquarie found that 40 percent would spend less than they did pre-coronavirus.

Sixty-five percent of those polled added that they would not visit Las Vegas until a COVID-19 vaccine is widely available.

Nevada Markets to Locals

McCarran International Airport has seen its passenger numbers descend greatly. Las Vegas main airport year-to-date has processed 12.3 million arriving and departing passengers, a 54.2 percent year-over-year decline, or roughly 14.6 million fewer people.

Daily auto traffic at the I-15 Nevada-California border is down 25.4 percent January through July.

With fewer visitors, Nevada is promoting its rural areas to its own people. A new campaign, titled Discover Your Nevada, encourages residents to get out and explore the state.