Vegas Strip Sees Soft Q1, Hotel Demand Hints at Rebound

Las Vegas had a soft start to the year, at least that’s what the situation on the casino floor looked like. Nonetheless, beneath the headline numbers, there are signs that things may be picking up.

11% YoY Gaming Revenue Drop 

After the Nevada Gaming Control Board reported an 11% year-over-year drop in January Strip gaming revenue and a total “gaming win” of $1,345,164,920 in the first of the month for “nonrestricted gaming licensees reported”, marking a 6.55% YoY drop, concern around first-quarter performance grew. 

Still, Barry Jonas of Truist Securities says most operators were already bracing for a slow quarter.

“Despite these improvements, we still think most operators are not expecting Q1 EBITDAR growth, and we are looking closely at Q2 for a potential inflection,” Jonas wrote in a note to clients.

The weakness in January was largely tied to baccarat, which came in very soft. Despite Strip gaming revenue being down 11%, Jonas pointed out that when results are normalized, revenue was actually up 4%. 

Excluding baccarat, total casino win edged up 0.5%, a small gain but still a better signal about the market’s overall health.

Slots, on the other hand, told a steadier story, with revenue rising 3% year over year, driven by a 7% increase in handle, even though the hold percentage slipped slightly. 

For the fiscal year July 1, 2025-January 31, 2026, gaming win also went up 0.69%.  

J.P. Morgan‘s Daniel Politizer argued that January’s 7% slot handle growth was the strongest recorded since last September. At the same time, table drop increased 9%, reaching its best level since January 2025.

Stable Numbers for Tourism 

Outside the casinos, tourism numbers were more stable. The Las Vegas Convention and Visitors Authority reported a 2.2% decline in January visitation, the smallest drop in a year. Convention attendance actually rose 7%.

Hotel performance is where optimism starts to build. Revenue per available room increased 4.5% in January, and average daily room rates climbed 7%, marking the first monthly improvement in eight months. 

February trends look even better, with surveys showing Strip revenue per room up 23% and average daily rates up 8%, with occupancy tracking 13% higher.

Local casinos also saw headline revenue dip 3.5%, but normalized figures showed a 3.5% increase.

Put together, the first quarter may not deliver earnings growth. However, if hotel demand and convention traffic continue to strengthen, the second quarter could look very different for Strip operators.