Optimism prevails as Strip gaming operators hoping for a post-pandemic bounce back By Howard Stutz, Executive Editor, CDC Gaming Reports March 16, 2021 at 6:30 pm Can you smell the optimism? A cautious confidence is emanating from Las Vegas casino operators that the early stages of an economic rebound is on the horizon. On Monday, gaming floors and restaurants boosted capacity levels to 50%, just ahead of the NCAA’s March Madness. The buoyant mood also comes from gaming leadership in the regional markets and Macau. Las Vegas Strip tourists in August 2020. Investment firm J.P. Morgan hosted a gaming and lodging management forum recently in which negative feelings after a year of pandemic-related shutdowns and COVID-19 operating restrictions seemed to be checked at the front entrance. Analyst Joe Greff, who helped lead the discussions, said optimism was the conference’s tone. The view of gaming and tourism leaders centered on Americans spending more on trips and vacations heading into the second half of the year. Greff said fiscal stimulus programs and savings were helpful, but the general expectation surrounds Las Vegas visitors wanting “to return to a more normal life of socializing and travel.” Nevada’s easing of capacity limits for conventions and tradeshows also sent a positive signal to the Strip’s long-stagnant midweek business meetings and convention segment. “Las Vegas Strip operators are gaining confidence in a material inflection in the second half of 2021, driven in part by the return of group business,” Greff said. Already, casinos and the Las Vegas Convention and Visitors Authority have booked tradeshows during June and July that will jumpstart the market segment. It’s not totally “back to normal” in Las Vegas. Facial masks and social-distancing measures are still required for customers and businesses. However, frontline casino and restaurant employees, now eligible for COVID-19 vaccines, have lined up at vaccination centers, hoping to send a “safe-to-visit message” to potential travelers. Caesars Entertainment CEO Tom Reeg told the forum’s participants that the company has seen increased bookings for its nine Strip resorts, with half of the new reservations setting dates some 30 days or more into the future. The increase in business was one reason Caesars expanded the operating hours of the Linq and Planet Hollywood that had been limited since the summer months. The optimism on the Strip extends into the Las Vegas locals market. Red Rock Resorts Executive Vice President Rodney Atamian said the company’s Southern Nevada business since the start of the pandemic has been driven by a customer segment that is age 40 and under. Red Rock’s older customer base – aged 55 and above – has stayed home. But that absence is slowly abating. “As (COVID-19) vaccination trends have improved, this core customer has begun to return as well,” Greff noted. Golden Entertainment CEO Blake Sartini expressed a similar view during the company’s fourth-quarter conference call. Golden, which operates more than 60 Las Vegas-area taverns and two locals-oriented casinos, is seeing its age 65 and older customer demographic “starting to trickle back in” as they become vaccinated. Older customers are also returning to the company’s Strat resort near the Strip’s north end. “We see that as a great catalyst going forward,” Sartini said last week. “So when I say trickle, it is kind of trickling in now, but we’re seeing that trend build, and that’s going to be highly advantageous for us as they come back.” Las Vegas’ COVID-19 troubles have been well documented. The nation’s largest gaming market was hit harder than any other U.S. gaming destination. Strip casino revenue fell to its lowest overall figure since 1996 and tourism numbers plummeted to their smallest total in 30 years. During its 78-day gaming shut down between March and June, the Strip couldn’t rely on igaming (such as New Jersey and Pennsylvania) to boost numbers. Conventions and meetings went dormant for nine months. The locals market experienced gaming-revenue declines that topped 30% in certain areas. The capacity increase arrived just as the NCAA Basketball Tournament begins play this weekend around Indianapolis. Las Vegas casinos lost out on March Madness a year ago when the pandemic forced the event’s cancellation. Strip resorts normally see a boost in customer volume during the three-week tournament. “Collectively, the NCAA tournament is the biggest event of the year that we book,” Art Manteris, vice president of race and sports for Station Casinos told ESPN’s David Purdum. “It’s a significant part of business, so it was a big hit to lose it last year.” While 50% capacity is not 100% capacity, the March Madness audience in Las Vegas could be a boost to both the bottom line and the area’s psyche. “To me, it’s the beginning of the end of the pandemic,” Manteris told ESPN. “I’m looking at it as the very first step toward regaining normalcy. It will be an emotional moment.” Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at firstname.lastname@example.org. Follow @howardstutz on Twitter.