The National Football League draft looked like Las Vegas – especially Caesars Entertainment (CZR) – Get the report from Caesars Entertainment Inc. and MGM Resorts International (MGM) – Get the MGM Resorts International Report Las Vegas Strip properties – have officially put the covid pandemic in the rearview mirror.
The casinos were packed, the Strip was actually closed to cars in order to accommodate the huge crowds, and mask requirements were a thing of the past.
It was one of the biggest crowds in Las Vegas since covid hit and it felt like some sort of unofficial end to the nightmare that was covid.
The pandemic had literally brought the city to a standstill, and even when it reopened things weren’t normal. Major conventions like the Consumer Electronics Show have been held with an odd mix of in-person and virtual attendees.
Only about 30,000 people attended CES, instead of the nearly 200,000 that normally fill the city’s hotels and casinos. It was a sign that even in January 2022, Las Vegas faced a long road, but it was a road the city seemed to have taken during the draft in late April.
Now, however, as the pandemic seems to have gone from something that controlled the way we live to a background nuisance, covid has erupted again. The number of cases in Las Vegas has increased and some sites in the city have moved to reinstate indoor mask mandates.
It’s not something casino operators would like to see back as mask mandates deter travelers looking for a “normal” vacation. But with the rise in cases, is it something Caesars, MGM, Wynn Resorts (WYNN) – Get the report from Wynn Resorts Limitedand other operators need to worry about?
Las Vegas brings back masks
Las Vegas Nellis Air Force Base and some other locations in the city have brought back indoor mask requirements as covid cases spike.
Additionally, the Red Rock Canyon Visitor Center mandated masks while the University of Nevada, Las Vegas strongly suggested that students and staff wear them on campus, but did not wear them. to mask a requirement.
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It raised the specter that Las Vegas casinos could be forced to impose Basque mask mandates. Fortunately, at least for casino operators who want to keep mask-wearing optional, such a move does not seem imminent, the Las Vegas Review-Journal reported.
“A Nevada Gaming Control Board spokesperson on [June 13] said administrators would only issue guidelines for face coverings at casinos on the orders of Gov. Steve Sisolak — and that didn’t happen,” the newspaper reported.
Clark County, which includes Las Vegas, saw its covid-19 designation upgraded from moderate to high on June 9. This designation, which is based on case rates and hospitalizations, comes with a general recommendation from the Centers for Disease Control and Prevention that people wear masks.
Las Vegas has completed its comeback
Las Vegas appears to have returned to pre-pandemic visitor levels (more or less) even before international travelers began to return in normal numbers.
In Las Vegas, demand trends strengthened throughout the quarter, leading to an all-time high of $411 million in the first quarter and adjusted Ebitda excluding actual rents. Ebitda improved by 140% compared to the first quarter of 2021 and margins increased by 1000 basis points to 45%. Total occupancy for the first quarter was 83% with weekend occupancy at 95% and midweek at 77%. Effective April 1, 2022, we lifted all occupancy caps in Las Vegas and expect to see a significant improvement in occupancy for the second quarter of 2022.
MGM Resorts general manager Bill Hornbuckle reflected the remarks in his comments at his company’s meeting. call for first quarter results.
In Las Vegas, we maintained strong margins in the first quarter, reflecting the sustainable operational learnings implemented in the wake of the pandemic, heavy weekend occupancy and [average daily rates] have been driven by a robust calendar of events, and we see this trend continuing into the second quarter. Midweek occupancy is still lower than 2019, but improved business mix and a growing group base will allow us to accelerate the rest of the year. We continue to expect our convention room nights to reach 90% of 2019 levels in the second half of 2022. It is important to note that we are seeing an increase in spending levels for our groups since the beginning of the year, including catering and banqueting, and to highlight our international leisure trends. were beginning to see positive indicators of the return of international flight capacity.
A mask mandate might not completely halt this momentum, but it would likely lead to cancellations and could cause the convention industry to take another break.
It doesn’t seem to be in the cards currently, but for investors and potential visitors to Sin City, it’s a situation worth watching.