Resort CEOs to keep high-end hotel rates up despite visitor decline

Three Las Vegas resort CEOs say they expect to continue keeping their high-end hotel rates up, even if it means sacrificing occupancy rates because the city continues to be an exciting draw with its numerous attractions.

Bill Hornbuckle, CEO of MGM Resorts International; Tom Reeg, CEO of Caesars Entertainment Inc.; and Craig Billings, CEO of Wynn Resorts Ltd., kicked off the second day of the 26th annual Global Gaming Expo — the world’s largest gaming industry gathering with an estimated 25,000 in attendance – at The Venetian.

Hornbuckle, Reeg and Billings were interviewed in a wide-ranging panel discussion on a variety of casino industry topics by CNBC anchor Contessa Brewer, covering how they believe Las Vegas continues to thrive as a value destination, even though prices have climbed.

But the three CEOs said they don’t worry much about potential revenue slippage because there are so many different attractions visitors are willing to experience that keep bringing people back.

Better than New York, L.A.

They also note that Las Vegas pricing is comparatively better than other big tourism markets like New York and Los Angeles.

“Our average rates have crept up from like the 35th biggest market to like No. 17 or 18, but we’re still 40 percent lower (on hotel rates) than New York,” Hornbuckle said. “We’re 7 percent lower than L.A. Las Vegas still is an incredible value.”

The executives cited events at the Sphere as a major draw that keeps the city vibrant, but lamented cost factors over which they have no control.

They cited higher airfares on Southwest Airlines and shutdown of Spirit Airlines as obstacles that keep visitation from soaring.

The executives said in addition to the Sphere and Major League Baseball on the horizon, they view the next big opportunity for large numbers of visitors to the city to be the NBA and what it could bring to Las Vegas.

“It’s the leisure customer,” Reeg said. “When the group business is not here, the leisure customer is not as strong as it has been. But I think we’re living through it. And we’re still living through the impacts of the pandemic. I think what we had was a bubble that started post-reopening, that went to regional markets, then went to destination markets.

“We had summers here, a couple that were exceedingly strong, and we’ve kind of gone back to the normal seasonality in Las Vegas as things have gotten back to normal, and to the market. And those of us who lived through the days when we were 98 percent occupancy in the summer — it’s jarring. But I think we’re really back to where we were pre-pandemic in terms of the rhythms in the market.”

Airfare hikes take a toll

Hornbuckle said the higher cost of airfare and reduced numbers of flights are taking their toll, but MGM still managed to have a slot tournament event that drew heavy crowds.

“The luxury segment continues to do exceptionally well,” Hornbuckle said. “The convention business is up, I think, 11 percent this year. The summer was great, and so we think about gaming, you think about convention business, think about luxury. All those segments are either performing well or are doing better. We literally this weekend had our best slot tournament in the history of the company. That $5 million tournament was the best thing we’d ever done. So certain cylinders are pounding and pounding hard.”

The panelists said geopolitics are behind much of drop in international visitors, including Canadians.

“It’s a complicated world out there,” Billings said. “I don’t know what else to say. The state of the state of geopolitics and the state of international relations is more complicated.”

He added that changes in international visitation actually began in around 2016.

“We’ve done a lot of work over the course of really the past nine years, changing and diversifying our business,” Billings said. “And so the recent drop in international visitation for us has been very straightforward to backfill. We don’t like to see it, but we’ve been able to adapt to deal with it.”

While international visitation to Las Vegas has slumped in 2026, two of the companies are taking their products abroad instead.

Building abroad

Billings said Wynn’s project in the United Arab Emirates is progressing despite the turmoil of war in the Mideast. He said work crews have missed only one construction day on the Wynn Al Marjan Island.

MGM, meanwhile, is taking its resort product to Osaka, Japan.

Wynn Al Marjan Island is due to open in September 2027, while MGM Osaka is scheduled for a fall 2030 opening.