Casinos took a major hit during the pandemic as indoor recreational activities temporarily shut down to halt the spread of the virus. Now, with most restrictions lifted, the industry is coming back to life – but the overall pace of recovery for US public gaming companies has been choppier than for other sectors.
We dove into national and regional foot traffic trends for Boyd Gaming, Bally’s Corporation, Caesars Entertainment, MGM Resorts, Red Rock Resorts, Penn National Gaming, and Wynn Resorts to see how this sector is performing through the reopening.
Casinos’ Staggered Recovery
Overall monthly foot traffic has been improving, with nationwide visits down just 10.2% in June 2021 compared to June 2019, up from a 32.5% decline just a few months earlier in March 2021. Las Vegas fully reopened June 1st, and the Vegas Strip properties have experienced a remarkable turnaround.
But in some regions, the recovery appears to be more erratic. For example, Atlantic City, a major gaming hub which had fully reopened in mid-May, actually observed weaker traffic in June (-22.9%) compared to May (-20.1%). The drop in June visits might suggest that the initial excitement over the casino reopenings did not continue – though the summer could provide a significant boost. The Southeast and Northeast also seem to be facing choppier recoveries, while the Southwest casinos are performing comparatively well.
The casino recovery in the Southeast region (primarily Mississippi and Louisiana) experienced the biggest setback over Q2, with the visit gap widening from -19.3% in April to -26.9% in June. Although this region generally performed better than others during the pandemic due to looser COVID restrictions, the foot traffic recovery appears to be losing momentum. It should be noted, however, that although visits decreased, revenue trends have outpaced foot traffic, driven by longer visit duration and higher table drop. But the foot traffic weakness still bears monitoring, as revenue growth could soon stall if visits remain low while visit length and table drops return to pre-pandemic levels.
What Happens on the Vegas Strip Stays on the Vegas Strip
As people sheltered in place and the tourism industry shut down, casinos in Las Vegas took a major hit, with March visits down -37.1% compared to March 2019. Now, the Vegas recovery seems to be driven primarily by visits to the Vegas strip, with these properties significantly outperforming off-strip and local casinos.
In fact, visits to Strip properties were actually positive compared to 2019 in June, indicating a sharp rebound. This is likely driven by consumer excitement over destination air travel, a key difference when compared to Atlantic City. In contrast, the off-strip casinos appear to be performing similarly to casinos in other regions, suggesting that the local economies are not seeing the same level of rebound.
The Vegas strip recovery could be driven by both regional and national tourists who are flocking to Vegas for vacations. As a result, integrated resorts such as those owned by MGM and Caesars are better positioned to benefit from this trend. In contrast, regional operators such as Red Rock Resorts, Penn National Gaming, and Boyd Gaming, whose properties are located primarily off-strip and cater more to locals, are noticeably not matching those performances.
To learn more about the data behind this article and what Placer has to offer, visit https://www.placer.ai/.
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