A UNLV economics professor released a report this week suggesting Las Vegas’ visitor volume, gaming revenue, and hotel occupancy will decline in 2025 and 2026 due to a softening of the nation’s economy.

According to Stephen Miller, director of research for the Center for Business and Economic Research, the Nevada economy and its tourism sector “will hit some bumps in the road” next year and the year after. CBER projects some retrenchment of economic activity or slower growth over the next two years, “absent any large economic shocks from within or outside the system.”
While Miller doesn’t see a recession on the horizon, a softening within the economy impacts Las Vegas.

“Absent a new wave of a coronavirus variant, a financial crisis leading to a recession, assuming a resolution of the war in Ukraine, and limited global reach from the Israeli-Hamas conflict, the southern Nevada economy will experience a slow contraction in the rest of 2024, 2025, and 2026,” Miller said. “Gross gaming revenue over time will likely return to pre-pandemic trends, as savings and discretionary income return to where they were before the pandemic, adjusted for higher wages and inflation.”

Miller forecasts southern Nevada visitor volume, which is up 2.1% through September, will decline 5.8% in 2025 and 6.9% in 2026. He said visitor volume will end 2024 just ahead of 2023 figures, which suggests a decline in the fourth-quarter numbers.

Through September, gaming revenue is up 0.1%, but Miller forecasts it will end the year down less than 1% from 2023, which again suggests a slowdown in the fourth quarter. Gaming revenue will decline over the next two years, falling 5.4% in 2025 and 4.6% in 2026, Miller said.

“Visitor volume, gross gaming revenue, employment, and the unemployment rate respond to the business cycle. We anticipate slower national economic activity as the Fed navigates toward the soft landing,” Miller said. “In other words, since the national economy plays an outsized role in southern Nevada’s economic outlook, CBER’s current forecast shows a slowing economy.”

The major risk to the economy at the moment is whether the Federal Reserve Board can ease interest rates, while maintaining a strong labor market, Miller said.

“Consumers have spent down their pandemic savings, only to find that the costs of purchasing consumer goods and services have gone up, as well as the interest payments on their credit cards. Will they start to pull back their spending? What will happen with wage increases if the job market does soften? What about the slow moving but serious impact on debt markets in commercial real estate and corporate debt as companies renegotiate loans in the coming twelve to eighteen months if interest rates don’t decline as expected? What about broader, unpredicted, geopolitical events from the dysfunction of the U.S. Congress and an incoming administration? And will there be a slowdown in global economic activity starting with the property market in China?”

Miller also cited the war Russia-Ukraine and Middle East conflicts as ongoing concerns that can impact energy prices and the economy.