Las Vegas visitation up, but still not to prepandemic levels

Visitation to Las Vegas continues to inch toward prepandemic levels, as May’s tourism totals reported Thursday showed growth in convention attendance, room rates and occupancy levels.

Most year-over-year comparisons with May 2021 showed major increases, the Las Vegas Convention and Visitors Authority said. But when comparing numbers from May 2019, only room rates, traffic on major highways to Las Vegas and gaming win numbers were higher than the period before the pandemic, the authority said.

The LVCVA reported 3.447 million visitors in May, 19.8 percent more than in May 2021, but 6.6 percent below levels of May 2019. Convention attendance of 391,100 was 336 percent more than in May 2021, but 24.9 percent below May 2019.

“Overall hotel occupancy reached 82.6 percent, 11.7 points ahead of last May and down 8.2 points vs. May 2019,” said Kevin Bagger, vice president of the LVCVA research center. “Weekend occupancy was again in the 90s (91.9 percent, up 4.1 points year over year and down 4.5 points vs. May 2019) while midweek occupancy exceeded 78 percent (up 16 points year over year and down 9.3 points vs. May 2019.”

Room rates stay high

Bagger said room rates soared again in May, thanks to special events like the Electric Daisy Carnival and the Canelo Alvarez-Dmitry Bivol championship boxing match. The May average daily room rate was $175.76, just under April’s record $177.12.

“Following last month’s record-breaking average daily room rate, May saw another month with ADR reaching nearly $176, 38.7 percent ahead of last May and over 25 percent above May 2019 while revenue per available room exceeded $145 for the month, significantly ahead of May 2021 (+61.6 percent) and 13.8 percent over May 2019,” Bagger said.

Convention attendance soared 336 percent to 391,100 for the month, but the amount of highway traffic on highways leading to Las Vegas was down 4 percent to 131,628. In addition, traffic at the California-Nevada border was down 6.4 percent to 47,515, a possible indication that higher gasoline prices were starting to take its toll on trips from Southern California in May.

The Nevada Department of Transportation does not differentiate local traffic from tourist traffic in their vehicle counts.

Potential inflation offset

One analyst said inflationary pressures could be offset with future increases in international traffic and convention attendance.

“We recognize the risk that aggressive and persistent inflation could start to weigh on consumer spending,” Las Vegas-based John DeCree of CBRE Equity Research said in a Thursday report to investors.

“However, we view the continued recovery in both international tourism and convention attendance to Las Vegas as a potential offset to any moderate erosion in leisure spending,” he said. “Moreover, while inflation remains an issue, if the Fed can engineer a softer landing and avoid a sharp spike in unemployment, Las Vegas could avoid a significant demand drawdown.”

Despite higher airline ticket prices, passenger volume at Harry Reid International Airport increased 20.5 percent to 4.578 million passengers, the third highest monthly total in the airport’s history.

Southwest Airlines continued to lead the market with 1.599 million passengers in May, or 34.9 percent of all Reid passengers. Southwest had a 26.1 percent increase over the number of passengers served in May 2021.

Deep discounter Spirit Airlines followed with 599,167 passengers, up 47.4 percent from last year, and then Delta Air Lines with 432,940, up 15.9 percent. Of the 10 domestic air carriers serving Las Vegas, only American Airlines had a decline in passengers in May from last year, off 3.8 percent to 355,524.

International air service rises

International air service increased substantially from May 2021, with the number of passengers up 377.9 percent to 240,199 passengers.

For the first five months of 2022, domestic air traffic is up 56.9 percent to 18.423 million passengers with international up 515.2 percent to 788,890 passengers. Air Canada leads the pack among foreign carriers with 162,683 passengers while Canadian discounter WestJet is close behind with 148,554 flying. Mexican discounter Volaris had 91,939 passengers for the month while British Airways led overseas carriers with 70,438 passengers.

Visitor volume to Laughlin was down from May 2021 and 2019.

The LVCVA reported Laughlin visitor volume at 110,400, down 5.9 percent from a year ago and down 30.4 percent from three years ago.

The authority also said Mesquite visitation was at 85,000, down 29.1 percent from May 2019. It has no totals from last year to compare May with 2021.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.