Las Vegas is hurting as tourism drops. Are Canadians behind the Sin City slump?

Yahoo

2 days ago

After doing gangbuster business in the post-COVID era, Las Vegas is in the midst of a slump, with the number of tourists down sharply as Canadians in particular avoid Sin City amid bilateral bad blood over trade.
The total number of visitors is off more than 11 per cent year-over-year, according to data from the Las Vegas Convention and Visitors Authority, one of the most dramatic declines in recent memory outside of the pandemic.
Airline figures reveal there's been an even steeper decline among Canadians going to the desert gambling mecca.
The number of Air Canada passengers dropped by 33 per cent in June compared to the same month last year, airport figures show. WestJet, the largest Canadian air carrier at the region's Harry Reid International Airport, saw a similar 31 per cent drop. The decline was even more dramatic for low-cost carrier Flair, which saw its passenger numbers fall by a stunning 62 per cent.
Some U.S. travellers are also avoiding the self-described entertainment capital of the world — due, in part, to a backlash over higher fees and fewer perks for some gamblers. But resort operators say the Canadian boycott has been a notable hit to the bottom line.
On a quarterly conference call with investors last week, MGM Resorts president and CEO Bill Hornbuckle said the number of Canadian visitors started to fall earlier this year — around the time U.S. President Donald Trump launched his trade war — and there hasn't been much of a rebound.
That company owns some of the city's top properties, such as Aria, Bellagio and the Cosmopolitan and part of the NHL rink, T-Mobile Arena.
"International visitation has been an issue," Hornbuckle said. "Particularly earlier in the year, with Canada, we host a lot of hockey games, and we saw visitation down. And I think — I don't think, I know — it's still down," he said.
Thomas Reeg, the CEO of Caesars Entertainment, another major resort and gaming company that owns properties up and down the Strip, pointed to Canadians as one reason for the company's disappointing second-quarter results.
"International business, particularly Canadian, is softer," he said on a call with stock analysts.
Explaining why fewer rooms were filled with guests over the last three months, Reeg said, "Canadians are a significant piece of that."
Local union leaders have even taken to calling the dip in Canadian tourists the "Trump slump."
Canadians cite Trump's 'disrespect'
Winnipeg resident Martyn Daly is one of those visitors who's staying away. In an interview with CBC News, Daly said he and his wife typically go to Vegas once a year, but he can't bring himself to do it this year with the trade war raging.
"We're pretty upset with what's going on in the U.S. and the disrespect that's been shown by the Trump administration towards Canada. I just feel obliged to do something — and one little thing I can do is not patronizing a place we enjoy," he said. "It's not a good idea to be spending any of our hard-earned money in the States. I can spend it elsewhere with a clear conscience."
He's also leery of what he may face at the Canada-U.S. border amid reports some travellers are being held up for questioning or, in some rare instances, detention.
Guy Kerbrat, of Regina, cancelled a long-planned trip to Vegas to see an AC/DC concert to protest Trump's treatment of Canada.
"The thought of going down there right now — it doesn't make you feel warm and fuzzy. We just couldn't do it," Kerbrat said in an interview.
"My wife and I, we are Vegas-goers. It's a destination we enjoy. But we looked at each other and said, 'We can't support Trump and these policies that are so anti-Canadian.' I hate to hurt the people, the workers who aren't supportive of what Trump's doing, but we had to take a stand," he said.
Economic hardship
There's evidence that Nevadans are facing some economic challenges as a result of these disruptions.
Nevada's unemployment rate, at 5.4 per cent, is the highest among the states and second only to Washington, D.C., where there have been Trump-induced federal layoffs.
One of Nevada's U.S. senators, Catherine Cortez Masto, was part of a bipartisan delegation to Ottawa last month to meet with Prime Minister Mark Carney to try and patch up relations amid what she called "the chaos of the Trump presidency."
The Democrat said cratering tourism is "having an impact" and she wants to see "de-escalation" to normalize visitor numbers to the Silver State.
Local politicians have good reason to be anxious about the Canadian travel boycott, said Stephen Miller, an economics professor at University of Nevada, Las Vegas.
As the director of the university's business and economic research centre, he crunched the numbers and found Canadians contributed $3.6 billion US to the local economy last year.
Canadian spending supported some 43,000 jobs in the region, more than those employed in the manufacturing sector, Miller said.
That $3.6-billion figure comes close to the economic output of the local Nellis Air Force base — and that's saying something, given it's one of the largest and most important military installations in the U.S., with some 15,000 personnel.
"The Canadian numbers have gone down dramatically and it's an area of concern for the casinos," Miller said. "After all, the main goal of the resort industry is to put heads in beds."
He expects more promotional activity in the weeks ahead to try and break the patriotic boycott.
"You might get people saying, 'Oh wait a minute, that's a really tempting offer. Let me reconsider my decision.'"
Daly said he's already received "exceptionally good" offers with low room rates to try and lure him back. But he's not budging.
"I know Canada is small but we do have a voice, and I think it's great that we're using it," he said. "I think the only thing that Trump seems to understand is when people take action that hits them in the pocketbook."