Tough comps suggest red ink for the Strip in July
Based on slightly lower airport traffic and taxi trips YoY, we estimate Strip gaming revenues may have declined 8-12% YoY, assuming normal hold for slots and tables. Last July, slot hold was 7.8%, slightly higher than normal due to an accounting adjustment related to the calendar. July 2012 also contained one extra Sunday. Baccarat comps will be particularly difficult as July 2012 baccarat volumes rose 29% YoY on a high hold of 16.1%.
We remain optimistic that normalized growth will resume. Remember that rolling 12-month gaming revenues and slot volumes still have ample room to grow - 14% and 10% below the 2006-07 peak, respectively. With housing continuing to improve, the macro looks better for Las Vegas.
While gaming struggled in July, we're seeing good growth in room rates. Vegas should outperform the regional gaming markets for the rest of the year with housing potentially providing an extra boost to the locals market.
Here are our projections for July on the Las Vegas Strip: