LAS VEGAS (KLAS) — The Las Vegas tourism economy is coming off a down year in 2025 and pressures on Americans’ pocketbooks continue to weigh on travel. Still, a Las Vegas vacation might not be out-of-reach in 2026.
“We are watching to see how the American consumer responds to the $175 billion in tax cuts in the One Big Beautiful Bill Act,” Andrew Woods, director of UNLV’s Center for Business and Economic Research, told 8 News Now.
“Combined with likely moderation of (short-term) interest rates, we believe this will have a positive impact on consumer spending heading into summer, assuming the job market does not deteriorate any further,” Woods said. He noted that jobs have been stagnant recently with the exception of the health care industry.
President Donald Trump’s tariffs, shot down by the U.S. Supreme Court, are coming back as an across-the-board 10% tariff, expected to increase to 15%, adding to the economic uncertainty that throttled tourism last year.
Is the Las Vegas tourism economy resilient enough to weather another difficult year? That could depend on consumers and their faith in the economy.
Woods cautions not to overestimate the magnitude of the impact of tax changes.
“That doesn’t mean that middle- and lower-income consumers are necessarily going to see their financial condition substantially improve,” Woods said. “But it should provide a one-time boost for families and help with vacation planning this summer,” he said.
“But it takes two to tango,” Woods said.
Last summer, tourism slipped into a funk. Travelers across the country were choosing to stay home. Las Vegas resorts were under attack on social media by people who were saying the city just isn’t a good value anymore. Resort leaders countered those arguments, but they didn’t ignore what people said.
Bill Hornbuckle, CEO of MGM Resorts International, said his company learned fast that it can’t treat customers at Excalibur and Luxor the same as luxury travelers at Bellagio and Aria. He was open about the company’s mistakes in pricing, saying customers had every right to be upset about a $12 coffee when they were only paying $29 for a room. “Shame on us,” he said in October.
Could 2026 bring a replay of that narrative?
Locals-focused Station Casinos and Boyd Gaming are among the companies expecting that tax changes will put extra money in their customers’ hands.
Lorenzo Fertitta, director of Red Rock Resorts (corporate owner and manager of Station Casinos in the valley), said this month, “We talk a lot about the VIP and the high-end gaming play and the higher-end restaurants, but I think we have also positioned the brand and the company such that we also have a strong value position. You know, $1.99 margaritas, food specials in the cafes, we don’t charge for parking.”
The Strip was the focus of many of the complaints last year. But Wynn Resorts offered a perspective that others couldn’t shout out loud: It wasn’t high-end customers who were complaining. MGM and Caesars have a range of customers, from bargain hunters to high rollers. They had to be more careful about what they said.
Strip resorts and locals casinos are fundamentally different, one Station Casinos executive said. Strip hotels are huge, and they provide a customer base for the casino and restaurants.
Attracting travelers is an absolute must for Strip resorts.
“I believe our Strip operators will also continue to make adjustments to their pricing model to entice low- and middle-market consumers to come to Las Vegas. We are forecasting around 40 million visitors this year, more than the 38.5 million last year and less than the 41.7 million in 2024,” Woods said.
Those numbers would signal that healthy tourism is still out there. The COVID-19 pandemic showed Las Vegas that gamblers don’t stay away for long. But there’s no shortage of opportunities out there as sports betting spreads nationwide and iGaming finds its niche.
Caesars Entertainment CEO Tom Reeg said last week that there’s no crisis in Las Vegas. Lower revenue and earnings are cyclical, he said. They follow two record years.
But he acknowledged the impact of the drop in visitors last year, saying in October that the soft summer resulted in about 90,000 empty hotel rooms across the 10 resorts Caesars owns on the Strip.
That’s illustrated by the close relationship between room nights occupied and travel patterns. The graph below shows how room nights paralleled auto traffic at the Nevada-California border. And auto traffic follows roughly the same pattern as air passengers at Harry Reid International Airport.
The Flamingo Las Vegas, a Caesars property, was at the forefront of efforts to attract travelers last summer, offering some of the lowest rates in all of Las Vegas.
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