After rough 2025, Las Vegas on a hot streak

LAS VEGAS — Driven by an uptick in group business and the city’s continued evolution into a major sports and entertainment hub, the Las Vegas hotel market is poised to rebound from a tough 2025 with robust gains expected in 2026.

The Las Vegas Strip, which accounts for 70% of the metro area's room inventory, has experienced lofty gains in occupancy and profitability through the first three months of the year, driven by a stellar March.

Year-to-date, the Strip has seen RevPAR increase 8.6% through March, driven in large part by a 6.2% gain in ADR, according to CoStar data. Occupancy, meanwhile, has increased 2.2% year-to-date to 83.1%.

In March, specifically, the market experienced double-digit gains in RevPAR and ADR, increasing 24% and 19%, respectively. In addition, occupancy in March exceeded 87%, a 4.2% spike from the same period in 2025.

Michelle Steffens

Michelle Steffens, COO of Newton, Mass.-based Sonesta International Hotels, which includes the Sonesta Simply Suites Las Vegas Convention Center and Sonesta Select Las Vegas Summerlin, touted the performance of the market this year.

“From our perspective at Sonesta, we have seen steady year-over-year demand growth in Q1 in Las Vegas,” she said, later adding, “we expect Las Vegas to continue delivering solid performance through the remainder of the year.”

Michael Stathokostopoulos, research analyst, CoStar, parent company of STR, further amplified the point.

“They are doing much better than we expected. Year-to-date, we were projecting performance would be flat or slightly negative, and actually they're up by [more than] 8%, which is a big number. That was a surprise,” he noted.

Demand generators

Hotel executives point to the Sphere, a new world-class entertainment venue, as well as the addition of professional sports franchises such as the NHL’s Golden Knights and NFL’s Raiders in the past few years, and the expected arrival of MLB’s Athletics in 2028. Furthermore, event-related demand in 2026 is being further driven by a handful of large events, such as the Las Vegas Grand Prix, WrestleMania 42 and the 2026 FIFA World Cup (though the city isn’t hosting any games, it still thinks the World Cup will draw in fans for the North American-hosted event).

“Demand in Las Vegas remains well-diversified and resilient. Group and convention business continue to be primary drivers, complemented by strong leisure demand tied to entertainment, sports and large-scale events,” said Steffens.

Stathokostopoulos maintained that such demand generators have been game changers for the market, effectively altering perceptions of Las Vegas and the types of visitors it’s attracting.

Michael Stathokostopoulos

“The drivers of demand are changing. The city is doing all the right things in order to transition to that new type of customer, which is more driven by large-scale entertainment and events that are happening, as well as sports,” he said.

With demand on the increase, Stathokostopoulos further emphasized that the market has been able to drive rate, particularly within the upscale and luxury hotels. As an example, he noted that rates in Las Vegas are 142% of 2019 levels, representing the biggest gains in the U.S. New York is the third-highest market, with rates at 125% of 2019 levels.

“This reflects the fact that Las Vegas has been shifting a little bit more upscale and everything has become a little bit more expensive,” he said.

Stathokostopoulos noted that one of the few negatives for the market has been a reduction in international tourism, particularly from Canada, which has seen a 25% drop during the first three months of the year.

Meanwhile, Caesars Entertainment Inc. recently extended a period of exclusive talks regarding a potential $18 billion takeover by Tilman Fertitta, the owner of the Golden Nugget casino chain. Fertitta has been in talks to purchase Caesars for roughly $32 a share. Icahn Enterprises, the firm of investor Carl Icahn, has also reportedly been involved in discussions to acquire the publicly traded company.

Hotel development, meanwhile, continues to move forward in the market. Major projects include a conversion of Mirage into a 600-key  Hard Rock Hotel & Casino; the 531-key Dream Las Vegas; and Tropicana redevelopment, which is expected be home to the New Athletics ballpark and a Bally’s Resort.

Sonesta Simply Suites Las Vegas Convention Center

“Developments that are moving forward tend to be large-scale, experience-driven and backed by well-capitalized sponsors. There is a clear emphasis on differentiation and integrated offerings that can drive both rate and ancillary revenue streams,” noted Steffens.

Beyond the Strip, My Place Hotels has two locations in the greater Las Vegas metro area. The midscale hotel brand’s location in North Las Vegas opened in 2018, while the location in Henderson opened in February 2025.

Developments that are moving forward tend to be large-scale, experience-driven and backed by well-capitalized sponsors. There is a clear emphasis on differentiation and integrated offerings that can drive both rate and ancillary revenue streams.

Michelle Steffens

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Ryan Rivett, president and CEO of Aberdeen, South Dakota-based My Place Hotels, pointed out that demand growth in the market has primarily come from “corporate, trade, logistics and medical segments.”

While the greater metro area hasn’t experienced quite the same uptick as The Strip, Rivett noted he is largely optimistic for results in 2026.

“The fourth quarter peak season is too far away — and the macro-travel environment is shifting too rapidly for a confident prediction — but I would not be surprised to report the full year 2026 as a RevPAR growth year,” he said.

He later added, “Overall, the submarkets of Las Vegas we find ourselves in have given us confidence regardless of the condition or trend in the greater metro area.”

Steffens, meanwhile, noted that the franchise company remains quite bullish on the market’s prospects.

“Overall, we see continued steady growth with Las Vegas maintaining its position as one of the most resilient and dynamic lodging markets in the U.S.,” she concluded.