Las Vegas Faces Economic Uncertainty Amid Declining Tourism

Las Vegas Faces Economic Uncertainty Amid Declining Tourism and New Tariffs

Las Vegas is currently grappling with significant economic uncertainty as tourism declines and new tariffs loom, raising concerns among locals about their daily lives. Research presented by economic analyst Jeremy Aguero at the 45th annual “Las Vegas Perspective” event revealed that the Economic Policy Uncertainty Index is at its second highest level in the past 20 years, only surpassed by the onset of the pandemic.

Aguero pointed out that economic uncertainty tends to lead to a decrease in consumer spending, particularly on non-essential items. This drop in spending could pose serious implications for Southern Nevada’s economy, which heavily relies on consumer activity. Despite widespread concerns from consumers, the U.S. economy has performed relatively well, adding 1.8 million jobs over the past year, with wages increasing more significantly than inflation. However, Aguero highlighted inflation and tariffs as critical sources of anxiety for consumers, fueling their apprehensions about the economic climate.

To mitigate these concerns, Aguero suggested that locals refrain from overreacting to economic uncertainties that may not directly affect them in the immediate term. He acknowledged the potential negative impacts of tariffs, including upward price pressure and supply chain disruptions, but emphasized that the direct impact on consumers has not yet become critical.

Historically, Las Vegas and the broader region of Southern Nevada have demonstrated a remarkable ability to recover from economic challenges better than many other areas within the United States. Aguero expressed confidence in the community’s resilience, although he did recognize significant issues such as homelessness and housing affordability that the region needs to address. These challenges, while serious, are not regarded as existential threats to Las Vegas’s longer-term economic health.

Recent data further emphasizes the economic struggles facing Las Vegas. As of June 2025, tourist numbers have dwindled by 7% year-over-year, attributed largely to ongoing economic uncertainty and declining consumer confidence. The Las Vegas Convention and Visitors Authority reported an 11.3% decrease in June visitors, alongside a 7.3% drop in total tourists during the first half of 2025. This downturn is evident at major travel hubs; Harry Reid International Airport recorded a decline of approximately 318,000 passengers in June, with international travel experiencing a consecutive five-month decline, reflecting a 10% decrease.

Hotel occupancy rates have also taken a hit, decreasing by 6.5%, with the average daily room rate falling to $163.64, marking a 6.6% reduction. Additionally, significant events that typically attract large crowds, such as InfoComm and Cisco Live, reported drastically reduced attendance, which has further impacted convention attendance figures by nearly 50,000.

Industry experts note an uptick in visitor complaints regarding pricing, with many perceiving aggressive pricing strategies—commonly referred to as “the gouge.” Despite these challenges, there are some in the tourism sector who remain hopeful for a rebound, driven by upcoming events. Nonetheless, a UNLV economics professor has forecasted that declines in tourism volume, gaming revenue, and hotel occupancy will persist through 2025 and into 2026.

The continuing issues faced by the tourism sector carry broader implications for the state, particularly concerning revenue generation and the ability to service debt related to the construction of the Las Vegas Raiders stadium. As the situation evolves, the community remains on alert, striving to navigate the uncertain economic landscape.