Traffic inside Las Vegas casinos is picking up again, but it’s not all driven by young travelers with pent-up demand.
Casino operators say customers 65 and over have started to return, spurred by the growing availability of COVID-19 vaccines across the country.
“As more of the older end of the customer spectrum receives vaccines and becomes more comfortable with leaving their houses … that for sure means they’ll start to step out and go back to their favorite casinos again,” said gaming consultant Josh Swissman of The Strategy Organization.
‘Starting to trickle back in’
Bob Bransdon, a 68-year-old Las Vegas local, said he used to visit casinos with his wife about once a week. Then the shutdowns came.
The two spent months away from casinos while they were closed and continued to avoid the properties after their June reopenings out of caution. They weren’t alone: The pandemic had led to a sharp decline in casino visitation from the 65-plus age group, which is more susceptible to severe illness tied to COVID-19.
That could be turning around. Bransdon, who started visiting casinos again in August, said he has noticed an uptick in the 65-and-older crowd, especially in the afternoons. He said the numbers aren’t what they were before the pandemic, but there is “no shortage of people there.”
Some casino operators have noticed the uptick too. Several executives discussed the trend in recent weeks during the latest round of casino companies’ earnings calls.
“We’re beginning to see that part of the database, that 65 and older, if you will, database starting to trickle back in,” Golden Entertainment Chairman and CEO Blake Sartini said during a March 11 call. “We see that as a great catalyst going forward.”
The heads of other Las Vegas casino operators — including Red Rock Resorts Inc., Boyd Gaming Corp. and Penn National Gaming Inc. — also have said they have started to notice that this age group is rebounding.
“I think up until very recently that the 65-year-plus demographic has been fairly shy about coming back to the facility,” Frank Fertitta III, CEO of Red Rock Resorts, said during a February call with investors. “If the vaccine has continued ramp-up and rollout, we are cautiously optimistic that we’re starting to see the 65-plus demographic slowly return back to our facility.”
One of the major driving forces behind this demographic’s return has been the rollout of vaccinations. As of Friday, 22.4 percent of American adults had been fully vaccinated, according to the Centers for Disease Control and Prevention. Many of those vaccinations have gone toward those in older age groups, with 53.5 percent of Americans 65 and older fully vaccinated.
Jo Ann Woodward, 72, has not yet received a vaccine, but that hasn’t stopped the Phoenix resident from making her regular Las Vegas trips.
Woodward has made two solo trips to Las Vegas during the pandemic and plans to return in April. By that time, she hopes to be vaccinated — she’s waiting to receive a Johnson & Johnson vaccine so she can have a “one and done” shot — and she expects more friends will be ready to join her once they’ve all had shots in arms.
“They think that now that they’ve had the vaccine, they’re immune (from the virus) and they can go wherever they want,” she said. “I probably will have more people that want to go with me when I’m vaccinated.”
More confidence to venture outside the home paired with pent-up demand is good news for casinos, according to Stifel analyst Steve Wieczynski.
“We expect a significant amount of pent-up demand from the (55 and older) demographic as vaccinations kick in and the country slowly goes back to normal,” he said in a Feb. 25 note.
Spokespeople for the two of the six largest casino operators in Las Vegas — Wynn Resorts Ltd. and Las Vegas Sands Corp. — did not respond to requests for comment. Spokespeople for Boyd, MGM Resorts International and Caesars Entertainment Inc. declined to comment, and a Red Rock spokesman referred to comments made by executives during the latest earnings calls.
A lucrative customer
The fact that any age group is coming back to Las Vegas is “huge,” said gaming consultant Debi Nutton, but the 65-plus demographic can be especially lucrative.
“Your kids are off to college; you’ve established yourself in your career,” she said of the age group. “They have more discretionary income.”
According to a 2019 report from the Las Vegas Convention and Visitors Authority, baby boomers spent more than millennials in nearly every category, including food and drink, transportation, shopping and sightseeing. They also spent far more on gambling, budgeting an average of $838.20 per trip compared with millennials’ $350.47.
“You’re talking about a majority of the (casinos’) customer base,” said Clyde Barrow, a gaming industry expert and professor at the University of Texas Rio Grande Valley. “Certainly for the core (gambling customer), the table games and the slot machines. Maybe not so much for the clubs and the concerts, the pool parties and those things.”
Those spending habits should carry forward in 2021. Management at Red Rock Resorts said they believe older customers have plenty of discretionary spending after months of lockdowns and limited entertainment options.
“They seem to be in pretty good shape from a financial standpoint because they just haven’t been spending their money. There’s a lot of disposable income there,” said Lorenzo Fertitta, vice chairman of Red Rock’s board, during the company’s earnings call. “They’re anxious to come back.”
This crowd also could help solve one of the greatest challenges Las Vegas resorts have faced since the onset of the pandemic: filling rooms midweek.
Midweek occupancy rates aren’t expected to bounce back to pre-pandemic levels anytime soon — conventions probably will need to make a full comeback before that can happen — but UNLV Assistant Professor of Hospitality Amanda Belarmino said as far as midweek leisure travel goes, older customers lead the pack.
Their return is “highly significant for Las Vegas,” she said. “They’re retired. They have that flexibility to travel midweek.”
Convergence of young and old
Virginia Valentine, president of the Nevada Resort Association, said the state’s resorts are “excited” to welcome back more guests as vaccines roll out and people feel more comfortable traveling.
“Those guests 65 years and older have had earlier access to the vaccine, and we would anticipate their return as they feel more comfortable venturing out and resuming activities they enjoy,” she said. “Our members value this customer segment, and we’re happy to have them back.”
Boyd Gaming, which has started to see its older, core customers return, expects the trend to broaden in the second and third quarters, according to a March 11 note from J.P. Morgan based on conversations with Boyd CEO Keith Smith and CFO Josh Hirsberg.
The operators’ challenge will be figuring out how to attract older gamblers while also keeping their newer, younger gamblers interested in returning. It’ll be easier said than done, especially as other entertainment options such as clubs and shows reopen and vie for the attention of younger crowds.
“Most operators believe that as events, movie theaters, restaurants open up, that younger customer could be fleeting,” Macquarie analyst Chad Beynon said.
But online offerings could help gaming companies earn the loyalty of these newer, younger customers even as other entertainment venues open their doors, Beynon said.
“Given the convergence of land and digital — with online and land-based (betting) — these customers may appreciate that a little bit more,” he said. “They’ll spend money online betting on a sports game, but then maybe go to the land-based property that’s tied in with that asset.”
The Review-Journal is owned by the family of Sheldon Adelson, the late CEO and chairman of Las Vegas Sands Corp.