“F1 stuck in neutral for now,” wrote Truist Securities analyst Barry Jonas, leading off a September 16 investor note on the subject of Las Vegas room rates. He deemed them “fairly stable but soft” into the fourth quarter.

A Truist survey of Las Vegas hotel-room prices had shown growth in August followed by slowness throughout the fall. Jonas said these findings were congruent with MGM Resorts International’s forward-looking commentary during its second-quarter earnings call.

Wrote Jonas, “While our survey is just one facet of the market and can change, we note continuing investor concerns around slowing growth amidst tough comparisons.” He added that he remained bullish on Sin City and that the valuation of favored companies MGM and Caesars Entertainment was still undemanding.

Truist had tracked 13 weeks of Internet-based advance room rates at 28 Las Vegas Strip casinos. It found MGM and Caesars room rates to be five and seven percent lower than last September, respectively. Wynn Resorts defied the trend with 20 percent higher room rates in the third quarter.

Room prices rode a rollercoaster over the summer. MGM rooms were down six percent in July and flat with 2023 during August, while Caesars’s went from being 12 percent off the pace to 14 percent ahead of it. By comparison, the overall Strip market was down six percent in July and up seven percent in August.

Jonas reported that “September’s data tracking is weak,” showing MGM and Caesars both down by double digits. MGM rates fell 15 percent and at Caesars hotels’ 18 percent. “Of course, September 2023 had MGM’s cybersecurity incident, creating some noise in our survey,” allowed the analyst.

In a CNBC appearance, MGM CEO Bill Hornbuckle projected potent forward movement in room bookings. However, Jonas described “signs of moderation,” both for Hornbuckle’s company and for Caesars. He also noted that the Jewish holidays, which begin October 3, could be pushing out some convention business.

Characterizing weakness in Las Vegas Grand Prix-related rates as “well known,” Jonas wrote, “We have been surveying F1 weekend rates for 7 weeks now, and rates seem to have stabilized recently with little data to suggest improvements (or deterioration) over that time.”

Another impediment was a soft start to ticket sales for Las Vegas Raiders games around Formula One Week. A Denver Broncos game at Allegiant Stadium on November 24 had almost six percent of tickets (3,693 seats) still unsold.

An MGM-cited $30 million loss “could potentially narrow as we get closer to the event given efficiency/cost controls and the benefit of a Raiders game that weekend potentially driving more traffic to the South end of the Strip during F1 weekend.” The only Raiders games with higher numbers of unsold seats were around the Christmas holidays (December 22 and 29), and a September 22 home opener against the Carolina Panthers, “a dull matchup, in our view.”

Truist researchers also looked at room prices for Station Casinos properties and found Durango Resort to be maintaining parity with Red Rock Resort. He added that both casinos were experiencing week-over-week price acceleration heading into autumn.

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