Virus’ impact to dampen Las Vegas regional gaming, study finds

A Thursday study from investment firm SunTrust Robinson Humphrey found Las Vegas Strip room rates are continuing to drop amid the virus outbreak. Analyst Barry Jonas expects regional operators will be affected by the outbreak as well.

According to the report, MGM room rates — serving as a proxy for Strip rates as a whole — are down 48 percent the week of March 20 compared to rates listed Feb. 27.

When SunTrust looked at room rates on March 5, rates were down only 26 percent that week.

“We are now seeing sequential declines for late-March rates accelerate,” Jonas said.

Conference cancellations, a positive COVID-19 case at the Mirage and rising consumer fears as the virus was upgraded to a global pandemic could all be factors in the price drops.

But the virus’ effects likely go beyond the Strip.

While operators had been suggesting Strip and regional gaming trends were stable, Jonas said regional visitation will take a hit as travelers become wary of exposure to large crowds.

“This trend (in regional casinos) is likely further pronounced given the at-risk older demographic is a key customer,” he said.

Additionally, while mobile sports betting was initially thought to be low-risk, Jonas pointed out that NCAA tournament cancellations the NBA and NHL’s decisions to suspend their seasons will likely impact the industry.

Contact Bailey Schulz at bschulz@reviewjournal.com or 702-383-0233. Follow @bailey_schulz on Twitter.