Truist Securities analyst Barry Jonas said he isn’t convinced lower rates are the result of a lack of consumer confidence. Here’s his take.
A gaming industry analyst has noted a downturn in second-quarter hotel room rates in Las Vegas, a possible indicator of a softening market, but isn’t ready to buy in to the Las Vegas Convention and Visitors Authority theory that it’s due to consumer uncertainty.
Barry Jonas, an analyst with Atlanta-based Truist Securities, noted rate weakness in a Tuesday report but said rates could be languishing due to typical downturns that occur when the weather gets hotter.
Jonas regularly surveys Las Vegas room rates by monitoring rates offered by MGM Resorts International and Caesars Entertainment properties. MGM and Caesars between them operate 20 Strip hotels.
“Our latest Las Vegas Strip room survey looks similar to the last one, still showing rate weakness into the warmer months,” Jonas said in his report. “Overall Q2 is trending down year over year, with April growth followed by softness in May and June, while our early read into July is down year over year as well.”
He said shorter booking windows also might be playing into the perceived rate weakness.
“While the LVCVA recently cited consumer uncertainty, we’re not ready to call anything structural just yet as we could still see improvements given shorter and shorter Vegas booking windows,” he wrote.
Jonas said he expects to have a better read of what the declining rates mean after meeting with Strip resort management next week.
