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Following the release of Q2 earnings by Las Vegas casino operators in late July, a recent report by Octus highlighted how both MGM and Caesars were facing a decline in patronage. This prompted a strategic reevaluation of their customer acquisition and retention strategies, with Canada playing a significant role in this.
The Number of Visitors Has Been Declining
One of the main conclusions from the earnings report was that MGM and the industry as a whole will need to be more deliberate about how to draw in value-oriented clients. The report also noted that both resorts have been suffering from midweek softness, a decline in international visitor numbers, particularly from Canada, and a deterioration in their value-tier offerings.
There are now those in Las Vegas who laugh at the claims that the city is in peril, that it is too expensive, and that younger people are less inclined to bet there.
Devin O'Connor of Casino.org, however, has authored a number of articles about the health of Las Vegas tourism, pointing out that July is the second-worst month of 2025 for foot traffic.
Diverse Views on Sin City Tourism
The Octus report, which summarized MGM and Caesars' profitability, states that visitor volumes decreased by 11.3% in June 2025. The number of visitors to Las Vegas has decreased each month in 2025. William Hornbuckle, the CEO of MGM, implied on the company's call that "value-oriented properties" that are more susceptible to fluctuations in the economy are under comparatively more ADR pressure.
Caesars recorded 97% occupancy, up from 99% during the same time last year. After a "strong April," the company's performance started to deteriorate in May and June. "The forward booking numbers have stabilized, but it was not'some huge bullish turn,'" Caesars Entertainment CEO Tom Reeg stated on the results call. More "like you patched your tire after it sprang a leak."
Canada's Role in the Challenge
The reduction in Canadian travel to Las Vegas is influenced by a number of reasons. Passengers traveling to Las Vegas this year have decreased, according to Canadian airlines like Air Canada and WestJet.
According to the Octus report: “Reeg said the company’s international business is softer, especially Canada. Caesars was down 27,000 room nights during the second quarter, and Canadians were a “significant piece of that,” even though they are only “3% or 4% of the total pie.” He added that when he looks at the business as a whole, the company’s consolidated performance does not suggest that there is anything particularly concerning about the U.S. consumer.
According to LVCVA President and CEO Steve Hill, Canadian tourism has decreased by about 15% so far.
Two factors, according to Kyle Owusu, CFA, Director of Credit Research at Octus, are responsible for the ongoing decline in Canadian travel: the status of the Canadian economy and the degree of resentment among Canadians toward U.S. President Donald Trump, who has made public remarks this year about how Canada would benefit from becoming the 51st state in the union, as well as intensifying a tariff war with Canada.
The Trump Anger Factor
In addition to a nationwide push to "buy Canadian" at supermarkets, Canadians are furious and have placed more emphasis on traveling within the country or to other countries, such as Europe, before entering the United States.
“My base case is continued year over year declines through the first half of 2026 before the year over year trends begin to stabilize in the second half of 2026, but it’s hard to forecast destination travel trends from Canada to the U.S. with any degree of confidence given the high degree of human emotion involved,” said Owusu.
“I think the shift in booking behavior will change how Las Vegas properties market to and price for Canadian visitors, but it depends on the asset,” he said. ““Canadian volumes represent a low-single-digit % of overall Las Vegas visitation so if certain assets are performing well enough with U.S. consumers, or U.S. consumers and other international travels ex-Canada, and operators think they can get away with holding firm with regard to price then they probably will.”
Owusu continued, "It is important to restore Las Vegas as a value destination instead of its reputation as an expensive luxury destination, taking into account criticism over high resort fees and high food and beverage prices. This will entice more Canadians to come back."
Restoring Las Vegas as a Value Destination
“That’s hard to quantify percentage-wise, but restoring the value destination appeal matters a lot. Vegas has benefitted from price increases for the past four years, especially within the hotel, food and beverage business line,” said Owusu. “Eventually you start to hit a ceiling regarding how much value you can deliver in relation to how much you’re asking people to pay.
“If we are heading into a more uncertain global trade environment, restoring value destination appeal probably matters with regard to most (if not all) destination assets that aren’t catering to high end or luxury consumers, and we appear to be heading into an increasingly uncertain environment, so I think restoring Las Vegas’ value destination appeal is going to be front of mind for operators in 2026.”
On a broader note, regarding travel to the Vegas Strip, Owusu mentioned that: “The key takeaway is for now, casinos catering to luxury customers have been spared from the pressure affecting destination travel.”
Professional Sports Teams Making a Beneficial Effect
A Toronto-based marketer claims that with the NHL's Vegas Golden Knights ramping up in October and the NFL's Las Vegas Raiders preparing to begin a new season, pro sports teams in Las Vegas play a significant role in drawing Canadians to the area.
The Bjarke Ingels Group (BIG) and the architectural company HNTB have developed a 33,000-seat, fixed-roof ballpark on the Las Vegas Strip that will house the new Major League Baseball franchise in 2028. The Tropicana Casino was demolished to make way for the stadium.
“The key for us is to bring players into the casinos,” said Lora Green one of the managing partners at Casino Marketing Group in Toronto, an exclusive service, where her company puts together white glove, exclusive trips for her network of high-roller gamblers to luxury casinos like Ceasars Palace.
“So having NFL, NHL, and MLB in Las Vegas is a great draw for clients. They can enjoy a live sporting event and go back to the casino and gamble, hoping their teams win and they win in the casino as well.”
