In a 2015 Las Vegas visitor profile, only 10% of those surveyed said their main reason for visiting the city was to gamble. The survey of 3,600 respondents, produced by the Las Vegas Convention and Visitor Authority (LVCVA), showed that only 1% of those visiting for the first time said the main purpose of their trip was to gamble, down from 4% last year.
So if people aren't going to Vegas for the casinos, what's driving the influx of visitors that rose to a record 42.3 million in 2015?
What the visitor profile shows
Gambling is by no means irrelevant. It still brings in an incredible amount of money for the casinos inside resorts built by the likes of MGM International (NYSE:MGM) and others. Seventy-seven percent of visitors questioned did gamble during their trip, and of those who did, their total trip gambling budget rose to $578 on average, up from $447 in 2011. On average for all respondents, each visitor spent $422 on gambling.
However, there is a distinct shift away from going to Las Vegas primarily for gambling, and toward a more diversified and entertainment-driven total vacation package. Respondents spent an average of $292 on food and drink, $172 on hotels, $122 on shopping, $61 on shows, and $15 on paid sightseeing. Altogether, that means visitors spent about $1,166 while in Las Vegas, only about a third of which was gambling.
For the second year in a row, 100% of respondents said that they were satisfied or very satisfied with their trip (88% claiming "very satisfied," the highest level), and 90% said that they were very likely or extremely likely to visit Las Vegas again. This high satisfaction signals that we should expect more record visitation in the coming years, just as there were the past two years.
The best company to take advantage of Las Vegas' growth
Wynn Resorts (NASDAQ:WYNN) CEO Steve Wynn spoke during the company's most recent earnings call about the need to diversify away from gambling and offer much more. While explaining that he's planning to renovate the massive golf course on the company's property and add a 38-acre lagoon with a new hotel, restaurants, and other attractions, he said flatly that he didn't care "if they put a nickel in a slot machine," adding: "I want them to pay my admission; I want them to stay in my rooms; I want them to drink my booze and eat our food."
Wynn is clearly understanding the need to make gambling just one part of the overall Las Vegas experience, but the company that's driving this point home even more is MGM Resorts.
Ninety-two percent of people in the study stayed in hotels, and about 75% of those stayed on the Las Vegas Strip, as opposed to Downtown Las Vegas or outlying areas. Of the 70,000 or so rooms on the Las Vegas strip, MGM controls around half. MGM, in fact, dominates the Strip on both ends, with more properties than any other resort company, and it continues to invest in convention space and entertainment to attract visitors and dollars. To that end, MGM opened a 20,000-seat arena in April that will host conventions, concerts, and the city's newly designated NHL team.
Las Vegas growth looks to be holding steady. As of May, the most recent data released by the LVCVA, visitation is already up 1.7% compared with this time last year, with hotel occupancy and the average daily rate both continuing to grow. This data seems to be part of the reason MGM recently raised guidance for 2017 EBITDA from $300 million to $400 million.
One thing is certain: The growth and transition in Las Vegas is not lost on MGM, and the company is investing in areas outside gambling to make sure it remains the dominant company in Las Vegas.
Bradley Seth McNew has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.