Las Vegas Recovery Slows as Las Vegas Strip Room Rates Drop

According to JP Morgan analyst Daniel Politzer Las Vegas is losing momentum in its recovery. Politzer is citing weaker room rates and renewed pressure on gaming stocks. Politzer Flags Slower Las Vegas Recovery as Casino Stocks Fall Politzer said the current trends suggested the recovery in the Las Vegas market was slowing in an investor note issued on Tuesday. The comments come as casino stocks face broader headwinds, although regional properties have held up relatively well. Another sign of the slowdown, Politzer said, was the price of hotels on the Las Vegas Strip. In August, room rates were down 10% from last year and down 5% in September. However, October was up 7%, suggesting the weakness has not been across the calendar. The analyst also expressed doubts about the status of Barry Diller’s investment group’s proposed acquisition of MGM Resorts. MGM shares have fallen below $40, with investor concerns heightened by uncertainty over the proposed $48.30-per-share bid, as reported by CDC Gaming. If the deal falls apart, MGM could come under additional pressure, Politzer said. He estimates the stock could fall to $35 and that the completion of the deal could add potentially $10 to its value. He has a $53 price target on MGM. Wynn Resorts is in a different kind of trouble. Shares of the company were trading at a 52-week low, with Politzer pointing to instability in the Middle East and unclear recovery trends in Macau. Investors are also concerned about Wynn’s planned resort in the United Arab Emirates. Wynn Al Marjan Island was supposed to open in 2026, but there are still questions about when that will happen and how fast the property can ramp up business. Conditions in Dubai have returned to a relative state of normalcy. Regional Casinos Show Resilience Despite Market Pressure Regional casinos, meanwhile, have proven more resilient. Politzer said August was flat year over year, but said 2026 had still brought modest growth so far. He also noted this year’s calendar did not include a Labor Day weekend in August, which impacted comparisons. The comments come after a rough period for casino stocks. Boyd Gaming, Churchill Downs, Penn Entertainment and Station Casinos had all declined about 9% as a group, although Politzer saw potential value in the sector. Among others, he liked Station Casinos. Now the operator could start to reap the benefits of its recent capital investments, said Politzer. He also talked about the planned North Fork casino in California as a future source of management fees and cash flow. He was also bullish on Penn Entertainment. The operator may continue spending on properties such as Boomtown New Orleans while keeping a lid on costs in its online business, the analyst said. The slowdown comes after a weaker tourism performance in 2025. Las Vegas saw 38.5 million visitors last year, down 7.5% from 2024, according to a report from Applied Analysis. Spending by visitors was down $4.3 billion to $50.8 billion. Las Vegas is now looking for more demand from overseas. The LVCVA approved up to $1.45 million for an Australian marketing campaign related to Qantas’ new Sydney-Las Vegas service, as reported last week. The seasonal route will launch in December, coinciding with major sporting events including NRL games at Allegiant Stadium. In 2025, Australia was already the second-largest market of international visitors to Las Vegas, with an estimated 275,000 arrivals.