No doubt the weak US dollar has contributed to an influx of international visitors to Las Vegas this year. “The US is on sale” is a phrase I’ve heard countless times. Jim Murren, President of MGM MIRAGE, recently said that 30% of Bellagio’s customers are now international. Those international customers are likely providing well over 30% of revenues to the property. Foreign visitation is great for the Las Vegas model over the long term for a variety of reasons. The problem is that domestic weakness has been masked somewhat by the effects of the weak dollar. By my calculations, Strip revenues were inflated by 5% in 2008 from the weak dollar. What happens if the dollar strengthens and the consumer remains soft? This is a very plausible scenario if the Fed gets serious about attacking inflation and is one more reason to be cautious on Las Vegas.
Weak dollar drives international visitation