Las Vegas faces a new health issue that could cause big problems for Caesars, MGM Resorts, Wynn Resorts, and other Sin City players.
While Las Vegas has largely recovered from the covid pandemic, some parts of business along the Las Vegas Strip remain vulnerable.
People have been coming back, and revenue for the large Las Vegas Strip operators has been strong, but it’s all a little tenuous as people and companies remain sensitive to any possible health concerns.
Sentiment turned quickly in January, when when the omicron variant of covid flared up and most major companies pulled out of the Consumer Electronics Show.
After the city had planned for a normal version of the show, with its huge in-person attendance, the event ended up welcoming only 30% of its normal audience.
That left the major Strip operators — Caesars Entertainment (CZR) – Get Caesars Entertainment Inc. Report, MGM Resorts (MGM) – Get MGM Resorts International Report, Wynn Resorts (WYNN) – Get Wynn Resorts Limited Report, and others — with largely empty hotels and casinos during what’s usually one of the biggest weeks of the year.
Now, while Las Vegas has been building back to its 2019 crowd levels, it remains vulnerable to even the appearance of a new health crisis.
And while it looks like full steam ahead for all of Sin City’s major events, health officials in Nevada are warning that a potential new crisis is looming.
Las Vegas Facing a ‘Tripledemic’
Health officials in Nevada and all over the U.S. have been warning “that a so-called tripledemic — influenza, covid-19, and RSV – may be in the forecast,” WebMD reported.
Clark County, home to the Las Vegas Strip, has seen some troubling signs when it comes to RSV, a respiratory illness, as well as covid and flu.
The region has seen a “huge bump” in RSV, Cassius Lockett, director of disease surveillance and control for the Southern Nevada Health District, told the Las Vegas Review-Journal.
This is happening when Clark County has seen a slow increase in covid cases and a difficult flu season is expected.
The concern — at least for the Las Vegas Strip — is that people will stay away if they believe they face a risk of infection. Covid and flu vaccines mitigate that risk, but there is no vaccine for RSV, which is generally not deadly but can require hospitalization.
“This is a concern about bad timing,” Brian Labus, assistant professor of epidemiology and biostatistics at UNLV’s School of Public Health, told the Review-Journal. “Any one of these things can put a lot of stress on our ERs. All three happening at the same time would very much stress our medical system.”
Las Vegas Strip Has Been Building Back Business
Both Caesars and MGM have reported positive numbers when it comes to not only current business but bookings heading into next year.
“Group room nights during Q2 ’22 represented approximately 13% of occupied room nights in Las Vegas, up from 11% in the second half of ’21,” Caesars Chief Operating Officer Anthony Carano said during the company’s second-quarter earnings call.
“Forward group revenue pace for the remainder of the year and into ’23 is up over double digits versus 2019.”
Customers haven’t been just visiting; they have been spending
“Our Vegas [food and beverage] operations delivered record profit during the quarter as well. And finally, results in our 55-plus segment, Las Vegas were up for the first time over 2019 since covid began, and we’re beginning to see a noticeable return to the market from international travelers,” he added.
MGM Chief Executive Bill Hornbuckle also spoke positively about his company’s business prospects going forward in 2023 in Las Vegas.
“First, in ’23, we expect to grow our convention mix and rate year over year,” he said, citing a normal Consumer Electronics Show and the return of Conexpo, a major construction industry trade show.
“Add to that, the return of international visitation to Las Vegas, which in 2021 represented only 3% of visitors, then 10% to 15% in the prepandemic year, and our international customers have longer stay patterns than domestic guests, and we expect these guests to return in force as international flight capacity will reach over 80% of 2019 summer levels.”