Evan Savard and Naboo Reyes, both from Nevada, play blackjack with dealer Leah Prerost at the Red Rock Resort after the hotel reopened for the first time since closing March 17 due to the coronavirus (COVID-19) pandemic, June 4. 2020 in Las Vegas, Nevada.
Ethan Miller | Getty Images
According to the CEO of two major casinos, Las Vegas is yet to see signs of an impending recession.
Bill Hornbuckle, CEO of MGM Resorts International, said at the CNBC Evolve Global Summit Wednesday that he expects inflation and rising gas prices to eventually affect his business, but “so far, that hasn’t happened.”
“What has happened over the last 18 months has been literally historic, but if you look at how we thought we would operate and how we operate, we are exactly where we thought we would be,” Hornbuckle said.
Despite skyrocketing inflation, gaming revenue rose 7.9% in May compared to the same period last year. American Gaming Association. And March, April and May were the three best months in the history of the industry, when the total income of each of them exceeded $5 billion.
Jim Allen, CEO of Hard Rock International, however, warned in May that record inflation was affecting its customers, while Red Rock Resorts CEO Frank Fertitta III said in his May 3 quarterly earnings report that Rising prices only affect those who spend the least.
Despite the rise in the cost of food and gas, among other things, technological adaptations made during Covid, such as pods and different playground configurations, have allowed MGM Resorts to attract more millennials to their casinos than ever before.
“It brought millennials to the table in a way that has never happened before in the industry. We have 20% more millennials than ever before,” Hornbuckle said. “I’m very optimistic about space.”
In the meantime, Wynn Resorts CEO Craig Billings is confident the company can handle another economic challenge if needed.
“I do think that because of Covid, the industry here in Las Vegas is better equipped to know what leverage we need to use to deal with what could happen,” Billings said.