🚨 Las Vegas has logged a sustained visitor downturn. June visitation fell 11.3% YoY and July declined ~12% YoY to ~3.1M, extending a multi-month slide. The weakness is visible in Strip occupancy and RevPAR and is amplified in national stats where Las Vegas and Houston have been outsized drags on weekly performance. Operators counter with “value” messaging and a loaded events calendar, but near-term comps and price sensitivity keep risk skewed to the downside.
Visitor volume: Jun −11.3% YoY; Jul ~−12% YoY (~3.1M visitors).
U.S. hotels: RevPAR YoY −1.6% (week ending Aug 9), −1.3% (week ending Aug 23); Las Vegas and Houston cited as key drags.
Inbound travel: industry trackers flag continued shortfall vs. 2019 and added friction from higher U.S. visa costs.
Loan Performance
Hotel cash flows tied to the Strip’s mid-week and shoulder periods are vulnerable when group pace softens and international mix thins. Lower occupancy against sticky labor and energy costs compresses flow-through, raising DSCR pressure on floating-rate or recently refinanced assets. Lenders widen spreads ~50 bps for non-top-quartile properties and underwrite to today’s weaker TTM, which can force covenant cures or cash sweeps on larger boxes.
Demand Dynamics
Price fatigue is real. Elevated ADRs, fees, and airfare shift marginal travelers to alternatives, while shorter booking windows add volatility. Convention cadence is improving but not uniformly month-to-month; international segments remain below pre-COVID, muting premium gaming and F&B capture. Weather- and event-driven comps distort weeklies, but the multi-month visitor slide signals a broader normalization of leisure demand.
Asset Strategies
Operators that pivot from rate-led to occupancy-led tactics can defend share: targeted shoulder-night promotions, segmented offers for drive-to markets, and upsell pathways to backfill per-guest spend. Cost control focuses on flex staffing, contract renegotiation, and energy management without eroding service scores that anchor convention re-bookings. Properties with diversified demand lanes (leisure + group + sports/entertainment) outperform single-threaded resorts.
Capital Markets
Debt remains available for stabilized, well-sponsored Strip assets at lower proceeds. Underwriting bakes higher debt yields, conservative mid-week occupancy, and modest ADR growth. Bid-ask is wide for value-add hotels; sponsors with cash and a cost-takeout plan can find basis-reset opportunities if the slump extends. Forward event calendars support recovery narratives, but lenders will price to current NOI until visibility improves.
Visitor declines are material and multi-month; comps and pricing are the culprits.
Vegas/Houston have skewed U.S. weekly RevPAR down this summer.
International headwinds and new visa fees extend the timeline for full recovery.
Balance sheets matter: higher spreads and stricter underwrites reward strong sponsors.🛠 Operator’s Lens
Shift to occupancy-first: protect mid-week with group/value bundles; monetize on-site spend to offset rate moderation.
Tighten costs without dinging service: flex scheduling, laundry/utility renegotiations, and dynamic pricing guard NOI when RevPAR slips.
Short-term: choppy through early 2026 as price sensitivity persists and inbound recovers slowly. Medium-term: convention and mega-event pipelines add lift, but ADR growth likely trails inflation until occupancy stabilizes.
Watch policy and FX; any easing of visa frictions or dollar strength can unlock high-margin international demand. Allocate capital to assets with diversified demand stacks and operational levers; avoid basis that requires near-term rate growth to pencil.
LVCVA monthly indicators; STR Weekly Insights; CoStar/STR weekly performance notes; AP and other coverage on inbound headwinds. STR
