July 11, 2024
With the pending Mirage closure next week, Las Vegas will has lost a lot of hotel rooms in a short amount of time. According to a Nevada-based gaming analyst company, two of the largest casino operators on the Las Vegas Strip are poised for substantial economic gains following these closures.
That equity research company, CBRE Group, believes their data shows that the shutdown of the Tropicana Las Vegas in April, as well as the Mirage closures on July 17th, will create a favorable market for Caesars and MGM. Losing both of these popular resorts means the removal of nearly 1,500 rooms from the Tropicana and over 3,000 rooms from the Mirage. That’s a lot of inventory gone in a short amount of time.
Collectively, the shut down of both resorts constitutes nearly a 5% percent reduction in the hotel supply along the Las Vegas Strip. The decrease in available rooms is expected to drive up average daily hotel rates. The research group believes that , given their substantial mid-tier room inventory, Caesars and MGM are well-positioned to capture the displaced demand from the Tropicana and Mirage closure.
MGM, which oversees more than 37,000 rooms across the Vegas Strip—representing over 40% of the total supply—anticipates benefiting significantly. Analysts suggest that the increased demand could potentially add between $70 to $100 million to MGM’s bottom line. Meanwhile, Caesars, with over 20,000 rooms on or near the Strip, comprising over 22% of the total supply, could see an additional $30 to $50 million in revenue as a result.
