Forecast: Predicted £modest' expansion in 2025's Las Vegas residential market for locals
In the vibrant city of Las Vegas, the gaming landscape for 2025 presents a mixed outlook. This is according to analyst Carlo Santarelli, who points to the backdrop of moderating same-store trends and a slate of planned capital projects as the key factors shaping the future.
One company with considerable work lined up for 2025 is Red Rock Resorts. Their plans include Sunset Station renovations and a room remodel at Green Valley Ranch. Meanwhile, MGM Resorts International has announced significant renovations for its properties along the Las Vegas Strip, focusing on non-gaming areas such as hotel rooms and resort amenities.
The year 2025 is expected to see margin performance primarily related to revenue performance. This comes after a year of decline in same-store gaming revenue in 2024, with operating expenses edging higher. However, Santarelli estimates that the same-store year-to-date locals market is down about 3% year-over-year through October.
Despite this, there are bright spots on the horizon. Durango Casino & Resort, which came online in December 2023, has shown strong returns. Analyst Santarelli estimates Durango's annual net revenue for 2024 will be approximately $340 million.
The addition of Durango has fueled a 6% increase in locals-market gaming revenue through October. Durango also has expansions planned for parking, gaming, and food and beverage in 2025, which are expected to cause an EBITDA disruption of about $5.9 million.
Looking back, from 2014 through 2019, Las Vegas locals gaming revenue grew at a 3% compounded annual rate (CAGR). Since 2019, gaming revenue has grown at a 5.1% CAGR, while the employed workforce has grown at just a 0.9% CAGR. This 10% above trend gaming revenue growth from 2019 to present is a material discount to inflation, given the 23% inflation experienced since 2019.
In the competitive Las Vegas market, Boyd Gaming has served as a clear standout in the regional group, while Red Rock and Golden Entertainment lagged in 2024. Boyd Gaming has notable projects for 2025, including a room refresh at the Orleans and the completion of the ongoing Suncoast overhaul.
2024 was considered an "interesting year" in the Las Vegas locals market by Santarelli. External expense pressures are expected to subside a bit from a rate of change perspective, though still grow in 2025. Market-wide EBITDAR is likely to be down high single digits year-over-year in 2024.
As we move towards 2025, it's clear that the Las Vegas casino scene will continue to evolve, with a mix of challenges and opportunities for the various players in the market.
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