According to Morgan Stanley report, Las Vegas market is back to running at nearly 95% occupancy on weekends, with the operators able to push room rates higher, and midweek occupancy is now running at 50-60%, up from February's nearly 30%. Companies are using price as a tool to bolster midweek traffic.
Mark Tepper, CEO of Strategic Wealth Partners, told CNBC’s “Trading Nation” on Monday that Las Vegas is gearing up for visitors.
“Airline tickets from Cleveland to Vegas have quadrupled over the last few months. My boots-on-the-ground research informs me that the pool party staff at the hotels have been rehired. They’re getting ready for an influx of people right now,” said Tepper.
Tepper agrees with Morgan Stanley that one of the Vegas Strip casinos looks to be the best bet on the recovery: MGM Resorts.
“You’ve got a great sports club exposure, you’ve got fantastic properties that focus on the non-high roller gambler. ... You’ve got pricing power coming back, and you’ve got an absolute ton of pent-up demand for people to vacation, socialize and just have fun,” said Tepper.
Las Vegas accounts for 40% of MGM’s total revenue. For fiscal 2021, the company is expected to narrow its loss to US$1.92 a share from US$3.94 a share a year earlier.
Michael Bapis, managing director of Vios Advisors at Rockefeller Capital Management, noted another crucial part of Las Vegas’ offerings: business conferences.
“Vegas is going to be one of the first places that conferences come back to when people need to meet and where people need to get together, probably in the third and fourth quarter,” Bapis said during the same interview. “As this rollout continues, and the demand just keeps going higher, you’re going to see these stocks go higher.”
MGM and Caesars have both roared off their April 2020 lows. MGM is up 317% since then, while Caesars has soared 842%.
Source: CNBC
