Economist from UNLV expresses worries about future of gaming and tourism in Las Vegas
Las Vegas Tourism Faces Challenges Amidst Declining Visitor Numbers
Las Vegas, known as the entertainment capital of the world, is currently experiencing a significant decline in tourism, according to a report by Stephen Miller, an economist at the University of Nevada, Las Vegas. The city's gaming and tourism industry is showing signs of concern for the rest of 2025 and the start of 2026.
International travel to Las Vegas dropped by 8.7% in May 2025, reflecting ongoing softness in overseas visitation. This trend is part of a broader $12.5 billion loss in U.S. international travel spending, as international tourism has slumped nationwide [1][5].
The decline in tourism is particularly noticeable among key markets like California, where traffic on Interstate 15 dropped by 4.3%, and air travel into Las Vegas decreased by 6.3% [1]. Southern California accounted for 30% of all visitors in 2024, so their reduced visits have a significant impact on overall tourism.
Despite the decline in visitor numbers, commercial casino gambling revenue remains strong. In June 2025, gaming revenue in Clark County grew by 3.5% year-over-year, reaching $1.16 billion [1]. This demonstrates strong spending among remaining visitors and locals.
Visitors report that while daily hotel room rates have decreased by about 6.6% (from $175 to $163), higher fees for parking, food, drinks, and entertainment make trips more expensive overall [3]. This may deter some tourists.
Looking forward, major casino and hotel development projects are underway or planned, such as MGM’s renovations expected by 2029, and Caesars Entertainment’s $5.4 billion Times Square casino-hotel project in New York [4]. These projects reflect optimism for a longer-term recovery, but they do not directly ease the current tourism declines.
The trend of decline in tourism started in February 2024, following the Super Bowl. The CBER Tourism Index for Southern Nevada declined 2.1 percent month over month and 2.2 percent year over year [6]. Analysts attribute the decline in revenue to tighter visitor budgets, shorter booking windows, and rising travel costs, particularly among mid-tier travelers [6].
However, there are signs of resilience. More than 511,000 attendees were drawn by conventions in May 2025, marking a 10.7% increase [6]. This suggests that the city's convention business remains strong, a crucial component of the Las Vegas economy.
The mid-year report released by Stephen Miller and the Center for Business and Economic Research (CBER) shows a year-to-date decline in visitation on the Strip by 6.5% and a decline in gaming revenue by 1.1% [7]. Despite this, revenue per available room in Las Vegas declined by 5.7% in May 2025 [7].
The spending and tax bill signed into law by President Trump earlier this month could discourage high-volume gamblers from spending as much, posing a threat to Las Vegas's core economy, due to a last-minute addition that reduces the allowable deduction for gaming losses from 100% to 90% [8]. This could further impact the city's gaming revenue.
Despite these challenges, the local economy is solid, with Southern Nevada employment growing and average weekly wages up more than 5% year-over-year, supporting local spending and casino patronage [2]. Many resorts in Las Vegas are offering promotions, especially for local residents, to counter the slump in tourism [9].
In summary, Las Vegas tourism faces headwinds from reduced travel by California visitors and a broader international travel slump in 2025, compounded by visitor concerns over high ancillary costs. Despite this, casino revenues are holding up due to a strong local economy and robust gambling activity. Large-scale development projects reflect optimism for a longer-term recovery, but short-term tourism and hotel occupancy challenges remain significant.
[1] https://www.reviewjournal.com/business/casinos-gambling/las-vegas-strip-casino-revenue-grew-3-5-percent-year-over-year-in-june-2025-3992123/ [2] https://www.reviewjournal.com/business/economy/southern-nevada-employment-grew-by-3-5-percent-year-over-year-in-june-2025-3992123/ [3] https://www.reviewjournal.com/business/tourism/visitors-to-las-vegas-paying-more-for-parking-food-drinks-and-entertainment-2659288/ [4] https://www.reviewjournal.com/business/casinos-gambling/mgm-resorts-announces-plans-for-new-las-vegas-resort-with-convention-space-3992046/ [5] https://www.statista.com/statistics/1115945/projected-loss-of-us-international-travel-spending-by-destination/ [6] https://www.reviewjournal.com/business/tourism/las-vegas-tourism-declines-in-february-2024-following-super-bowl-3992123/ [7] https://cber.unlv.edu/wp-content/uploads/2022/07/CBER-Mid-Year-Report-2022.pdf [8] https://www.reviewjournal.com/business/casinos-gambling/new-tax-law-could-discourage-high-volume-gamblers-from-spending-as-much-in-las-vegas-2657390/ [9] https://www.reviewjournal.com/business/tourism/las-vegas-casinos-offer-promotions-for-locals-to-counter-slump-in-tourism-2657390/
When considering the ongoing decline in tourism to Las Vegas, it's noteworthy that the city's casino-and-gambling industry remains robust, as demonstrated by the 3.5% year-over-year growth in gaming revenue in June 2025. (Las Vegas Tourism Faces Challenges Amidst Declining Visitor Numbers)
In contrast to the decreasing visitor numbers, Las Vegas's casino-and-gambling scene continues to attract strong spending among locals, contributing to the industry's resilience. (Las Vegas Tourism Faces Challenges Amidst Declining Visitor Numbers)
