Las Vegas Tourism in 2025: Navigating Shifting Consumer Behavior and Rising Costs

The Las Vegas Strip, once a beacon of relentless growth and unshakable allure, is now at a crossroads. In 2025, the city's tourism and hospitality sectors are grappling with a seismic shift in consumer behavior, driven by rising costs, economic uncertainty, and a recalibration of traveler expectations. For investors, this presents a complex landscape: a market in transition, where traditional models are faltering, but innovation and strategic adaptation offer long-term potential.

The Decline in Value-Driven Appeal

Las Vegas has long thrived on its reputation as a destination where “value” is king. However, 2025 has seen a stark erosion of this perception. Hotel occupancy rates on the Strip have plummeted to 66.7% in July 2025, a 16.8% drop year-over-year, while RevPAR (revenue per available room) has collapsed by 28.7%. The culprit? A cocktail of rising resort fees, exorbitant ancillary charges, and inflationary pressures that have priced out mid-market travelers. A $33 bagel, $26 bottle of water, and $50-per-day resort fees now dominate headlines, with critics labeling the city a “nickel-and-dme” destination.

International visitors, a critical pillar of the Las Vegas economy, have also withdrawn. Canada, once a top source market, has seen a 14.5% decline in 2025, with travelers citing U.S. visa policies and economic instability as deterrents. Domestically, the Consumer Confidence Index, under Trump-era trade policies, has reached pandemic-era lows, further dampening discretionary spending.

Shifting Demographics and Experiential Demand

Amid the downturn, a new generation of travelers is reshaping the city's economic model. Millennials and Gen Z now account for nearly 50% of visitors, with the average tourist age dropping to 43.6 from 46.2 in 2019. These younger demographics prioritize immersive experiences over traditional gambling or nightlife. Dayclubs, pool parties, and “experiential” attractions like Universal Horror Unleashed and Grand Prix Plaza are now major draws.

The LVCVA's 2024 visitor profile study underscores this shift: 46% of tourists are millennials, 7% Gen Z, and 25% of hospitality workers are part-time employees vulnerable to hiring freezes. To retain this cohort, hotels are pivoting toward all-inclusive packages, budget-friendly summer deals, and tech-driven services like Zoox's driverless robotaxis. Resorts World's “All Resort, No Fees” campaign—eliminating resort fees and offering complimentary parking—has been a lifeline for budget-conscious travelers.

Investment Opportunities in a Changing Market

For investors, the key lies in balancing short-term challenges with long-term resilience. While summer 2025 has been a disappointment, the fall and winter outlook is cautiously optimistic. The LVCVA's 30% increase in marketing spend and focus on group conventions (which account for 10% of 2025's revenue growth) signal a strategic pivot.

1. Luxury and Full-Service Hotels Outperform
   High-end properties, which cater to the 46% millennial segment, are outperforming economy hotels. RevPAR for luxury and upper-upscale properties rose 4.2% year-over-year in early 2025, compared to 1.9% for economy hotels. Investors should prioritize assets with strong convention space, such as Caesars Entertainment and The Strat, which have seen 7.3% group RevPAR growth in Q1 2025.

2. Value-Driven Promotions and Tech Integration
   Properties that eliminate hidden fees and leverage AI-driven personalization (e.g., customized dining, immersive tech experiences) are attracting price-sensitive travelers. The Sahara Las Vegas's “$100 Under” campaign and Resorts World's robotaxi partnership exemplify this trend.

3. Event-Driven Recovery
   Las Vegas's calendar of major conventions (SEMA Show, CONEXPO-CON/AGG) and cultural events (CES, NCAA tournaments) is expected to drive a 10.7% increase in convention attendance in 2025. These events are critical for stabilizing occupancy rates and boosting RevPAR.

Risks and Mitigation Strategies

The city's reliance on international tourism and its vulnerability to economic cycles pose risks. Rising interest rates have also stifled new hotel construction, with developers opting for renovations over new projects. Investors must monitor the LVCVA's $460 million 2026 budget and its ability to attract Gen Z travelers through TikTok-driven marketing.

Conclusion: A City in Transition

Las Vegas's tourism model is no longer anchored to its past glory. The decline in occupancy and value-driven appeal has forced the industry to innovate. For investors, the path forward lies in supporting properties that embrace experiential offerings, leverage technology, and prioritize transparency. While 2025 has been a year of reckoning, the city's ability to adapt—through conventions, budget-friendly strategies, and a focus on younger demographics—positions it for a rebound in 2026.

The question is no longer whether Las Vegas can survive this shift, but how quickly it can evolve to meet the demands of a new era. For those willing to navigate the turbulence, the Strip's resilience offers a compelling long-term opportunity.