In a normal year, the Consumer Electronics Show pushes Las Vegas to capacity. Nearly 200,000 people attend the convention, filling hotels not just on the Las Vegas Strip, but just about any property in town.
This year, while CES held an in-person trade show, many major exhibitors pulled out at the last minute due to an increase in Covid cases. CES did happen, but it drew around 15% to 20% of its normal crowd.
Instead of driving up prices to levels rarely seen at Strip casinos owned by Caesars Entertainment (CZR) – Get the report from Caesars Entertainment Inc. and MGM Resorts International (MGM) – Get the MGM Resorts International Reportthe rooms were empty and the casinos barely populated.
It was a stark reminder that while Las Vegas had reopened for business, business travelers — an incredibly important customer group for the casino industry — had yet to fully return.
The same CES scenario played out at two other traditionally huge Las Vegas conventions: the automotive-related Specialty Equipment Market Association show and World of Concrete. These shows ran with an in-person component, but attendance was low and normal had certainly not returned.
Now Nevada has lifted its indoor mask mandate and there are signs of life, says Southwestern executive (LUV) – Get the report from Southwest Airlines Co. Airlines, the largest airline from Harry Reid International Airport in Las Vegas, the Las Vegas Review-Journal reported.
Can Las Vegas expect a return to business travel?
Las Vegas saw 3.1 million people fly to Reid in January. That’s more than double the number of passengers in January 2020, but not even three quarters of the 4.2 million in January 2020, essentially the month before the start of the pandemic.
Dave Harvey, vice president of Southwest Air’s corporate travel unit, told the Review-Journal that Las Vegas is well positioned to make a strong recovery.
“Even though business has been really depressed over the past couple of years, Vegas has actually punched above its weight, because even though there haven’t been big meetings of 100,000 people, there have still been a lot of medium-sized gatherings,” Harvey said. Mike Akers of the Review-Journal. “These have helped support Vegas better than many other markets.”
Harvey sees a number of signs that Las Vegas can expect a relatively quick comeback. He noted that the shows running safely and fading from the omicron surge set the stage for a strong second half of 2022 and a full comeback in 2023.
“With the last surge in late December, early January … a lot of the January business was canceled and February definitely softened up,” Harvey said.
“But basically in March and beyond, all these events and meetings took place. And those who pulled back in January and February say they can’t wait until January and February 23, so they’re all working to reschedule into any spring open window. Spring is going to be very robust.”
Big Las Vegas players make big moves on the Las Vegas Strip
Caesars and MGM have taken advantage of the pandemic downturn to make big moves in their Las Vegas Strip portfolios. MGM, for example, sold operations of the Mirage to Hard Rock International while acquiring the Cosmopolitan.
“With over $500 million in capital invested to upgrade the property since 2014, the Cosmopolitan offers an incredible opportunity to expand our customer base and will provide a greater depth of choice for our guests in Las Vegas,” Jonathan Halkyard, chief financial officer of MGM Resorts, said in September.
“We believe we can leverage MGM Resorts’ expertise, operating platform and other highly achievable synergies to continue to provide best-in-class service while driving property growth. “
Caesars hasn’t been quiet either. The company has completed major renovations to the entrance to its iconic Caesars Place casino and plans to transform its Bally’s hotel/casino into its Horseshoe brand.
“At Horseshoe, it’s all about the player. Since 1951, Horseshoe casinos have offered the best odds, the highest limits, and the biggest jackpots. So it’s only fitting that we bring Horseshoe back to Las Vegas, and right on the Strip in Las Vegas,” Jason Gregorec, Property General Manager, said in a press release.
“In keeping with the Horseshoe tradition of providing impeccable service, our guests will see the property transform over time, ensuring we don’t disrupt the excitement as we transition.”
Bally’s / the new Horsehoe is basically in the center of the Las Vegas Strip.