Evan Savar and Nabu Reyes, both from Nevada, play blackjack with dealer Leah Prerost at Red Rock Resort after the property opens for the first time since it closed March 17 due to the coronavirus (COVID-19) pandemic, on June 4, 2020 in Las Vegas, Nevada.
Ethan Miller | Getty Images
Las Vegas has yet to see signs of an imminent recession, according to the CEO of two major casinos.
Bill Hornbuckle, CEO of MGM Resorts International, said at CNBC’s Evolve Global Summit on Wednesday that he expects inflation and rising gas prices to eventually affect his business, but that “hasn’t happened yet.”
“What’s happened over the past 18 months has been quite literally historic, but if you look at the way we thought we were going to do versus our performance, we’re exactly where we thought we’d be,” Hornbuckle said.
Despite rising inflation, gaming revenue in May was up 7.9% compared to the same period last year, according to the Gaming Association of America. March, April and May represented the best three months in the industry’s history, each exceeding $5 billion in total revenue.
However, Jim Allen, CEO of Hard Rock International, warned in May that record inflation was affecting his clients, while Frank Fertita III, CEO of Red Rock Resorts, said in his quarterly earnings call on May 3 that higher prices were affecting his clients. Only on people who spend less.
Despite increases in food and gas costs, among other things, technological adjustments made during the Covid – such as capsules and various configurations of gaming floors – have allowed MGM resorts to bring more millennials to their casinos than ever before.
“You’ve brought millennials to the table in a way that’s never been there before in this industry,” Hornbuckle said. “We have 20% more millennials business than ever before.” “I am very optimistic about the space.”
Meanwhile, Wynn Resorts CEO Craig Billings is confident it can tackle another economic challenge if necessary.
“I think the industry here in Las Vegas is better prepared, because of Covid, to see what levers we need to pull so we get through whatever comes,” Billings said.