Hotel occupancy in Las Vegas decreased by 7% as tourism in the city persists in its downturn.
Published on August 4, 2025
In the heart of Nevada, the city of Las Vegas is experiencing a downturn in budget-friendly tourism, according to recent trends. Analysts point to several key factors contributing to this decline.
Visitor numbers have dropped by 11.3% year-over-year, with hotel occupancy falling by 6.5 percentage points to 78.7% and average daily rates decreasing by 6.6% to $164. This decline is primarily driven by economic uncertainty, lower consumer confidence, and a shift towards shorter, event-driven trips.
Budget-conscious travelers are adopting cost-saving measures, such as shortening trips and reducing expenditures. They are also opting for shorter stays focused on specific events rather than longer, high-spending vacations, indicating a change in consumption patterns within Las Vegas tourism.
Extreme summer temperatures, with multiple days exceeding 111°F, discourage casual visitors and reduce the appeal for non-gambling activities, further impacting budget tourism. Additionally, decreased overseas arrivals due to geopolitical tensions, tariffs, and competition from European destinations, lower demand from higher-spending international tourists, affecting revenue per available room (RevPAR).
A drop in air passenger volume by 6.3% and increased highway traffic suggests more visitors are choosing cost-effective road trips over air travel, impacting the typical tourist demographic and spending levels. In response to occupancy declines, hotels are reducing room rates significantly, making stays more affordable but also squeezing profit margins.
Despite these challenges, Las Vegas's role as a major events hub provides some resilience, maintaining a baseline demand for tourism despite the headwinds.
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It is important to note that while budget-friendly tourists are most affected by the prices in Las Vegas, the top 3% of the market remains unaffected by the dip in tourism. Dunn's articles do not contain advertisements, ensuring a trustworthy and unbiased source of information for his readers.
[1] Tourism Economics Report, 2025 [2] Las Vegas Review-Journal, June 2025 [3] National Weather Service, 2025 [4] STR Global, 2025 [5] UNWTO World Tourism Barometer, 2025
