Las Vegas casinos could see growth as business travel recovers
Global business travel has yet to return to pre-COVID-19 crisis levels. But it could happen as early as next year, potentially providing a catalyst for Las Vegas casino-hotel operators, particularly those with conference rooms on the Strip.
The Global Business Travel Association (GBTA) found in a recent report that the business travel industry is recovering from the COVID-19 pandemic faster than expected. Spending next year is likely to exceed 2019's $1.4 trillion before rising to $1.8 trillion in 2027.
This latest forecast suggests spending will return to pre-pandemic levels sooner than expected, with growth expected in the coming years. Business travel spending is an important indicator, but it remains to be seen how travel volumes will continue to recover. ” GBTA CEO Suzanne Neufang said in a statement.
The forecasts in the GBTA Business Travel Outlook are consistent with recent events in Las Vegas. These include the Las Vegas Convention and Visitors Authority (LVCVA), which increased exhibitor fees at the Las Vegas Convention Center. Executives at some casino operators said they expect meetings and conferences business to rebound in the second half of 2023 and possibly next year.
Drivers of business travel upturn
Nearly four years after the coronavirus devastated the U.S. economy, including the gaming industry, it's clear the virus isn't going away and companies are learning how to live with it. This could pave the way for a renaissance in business travel.
"Progress in the fight against the Covid-19 pandemic has been a key driver of the recovery in global business travel over the past 18 months," the GBTA added. "The two biggest drivers of industry stability over the past six months have been the return of in-person meetings and events and the restoration of some international business travel capacity and volume.”
This feeling is critical for casino operators with large convention spaces, including MGM Resorts International. Earlier this year, Chief Operating Officer Corey Sanders said 2023 would be a "decent year" for MGM's convention business on the Las Vegas Strip. But the outlook for 2024 and 2025 is better. Last October, MGM announced a $100 million renovation of the Mandalay Bay Convention Center.
Additionally, both Caesars Entertainment and Wynn Resorts have extensive meeting space that is not being used due to the pandemic. Circa also debuted 35,000 square meters of meeting/meeting space in downtown Las Vegas in September 2022.
Macau operators can also benefit
The rise of business travel is not just an American phenomenon. There are also potential benefits for Macau operators as China's economy officially begins to reopen earlier this year.
Regionally, the Asia-Pacific region significantly underperformed last year due to delays in the reopening of China's economy. “China’s business travel spending fell by 4.6% last year, returning China to the world’s second-largest business travel market for the first time since 2014,” GBTA concluded. “However, by the end of 2023, China is expected to regain its position as the world’s leading business travel market market."
That could be good news for Las Vegas Sands, MGM and Wynn, the three U.S. franchises based in Macau.
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Source: www.casino.org
