Published on: August 26, 2025, 01:03h.
Updated on: August 26, 2025, 01:03h.
- Operators acknowledged a weak Q2 and anticipate similar trends for the ongoing quarter.
- While Q4 was expected to show improvement, recent signs indicate declining October bookings and room prices.
Recent second-quarter earnings reports from Caesars Entertainment (NASDAQ: CZR) and MGM Resorts International (NYSE: MGM) confirm a sluggish phase for the Las Vegas Strip, extending into the current quarter with uncertain prospects for recovery in Q4.
Barry Jonas of Truist Securities indicates that initial observations for October are not promising, suggesting that the anticipated recovery in Q4 may not happen as hoped.
However, there are slight improvements in week-over-week trends (from August to October), reflecting a shorter booking window. Company feedback hints at November, where current data is not available, as a time for potential positive changes in rates,” notes Jonas. “Although the summer struggles were somewhat expected by operators, a crucial question for investors in MGM and Caesars is if we will witness a significant turnaround in the Strip this Q4.
This perspective is juxtaposed against low visitation and disappointing revenue per available room (RevPAR) statistics, which are impacting investor confidence in Las Vegas Strip stocks. Jonas maintains “buy” ratings for both MGM and Caesars, the largest operators on the Strip.
Declining Las Vegas Casino Room Rates in Q3
After releasing their second-quarter results, both Caesars and MGM informed stakeholders that Q3 would likely mirror previous weak performance in Las Vegas, and this prediction is proving true.
According to Jonas, using MGM and Caesars as benchmarks, third-quarter Strip room rates are declining by 5% year-over-year, with weaknesses evident on both weekends and weekdays. He reported that July experienced a 4% decrease in Strip room prices at MGM locations and a 10% drop at Caesars.
Further complicating matters, August room rates on the Strip are expected to fall year-over-year, mainly driven by weakened weekend bookings. Jonas also notes that September appears to be another weak month, with both weekday and weekend prices lower compared to the same month last year, casting doubt on whether October can signify a genuine rebound.
“We continue to observe soft trends in October, with the following year-over-year rate drops for the Strip Proxy/MGM/CZR at -5%/-14%/-12%, respectively,” adds Jonas. “Nonetheless, management teams are noting November as a potential catalyst for Q4 growth. Overall, operators remain optimistic for Q4 and 2026 due to the robust event/convention calendar.”
Positive Trends in Other High-End Strip Properties
Prospects are not entirely grim on the Strip, as some upscale properties are exhibiting resilience. High-end casino hotels, typically classified as those with average nightly rates of $250 or more, include establishments like Fontainebleau, Venetian/Palazzo, and Wynn/Encore.
“In Q3, the rates for this ‘other high-end’ category have risen by 8% year-over-year and are projected to increase by 16% year-over-year in October, aligning with higher-end consumer trends we have observed throughout the year,” reports Jonas.
Recently, I visited Fontainebleau on a Tuesday afternoon and was impressed by the high volume of visitors and bustling activity in the casino, including in the high-limit areas.