Room Tax Revenue Expected to Decrease in Las Vegas

Amid the recently imposed tariffs by the United States that have the potential to spill into a global trade war, tourism across the country may be impacted. In particular, the recent tariffs imposed on Canada and Mexico, are raising concerns for the tourism industry in Las Vegas.

Tariffs May Impact US GDP and Tourism

The topic was up for discussion earlier this week during a regular meeting of the Las Vegas Convention and Visitors Authority (LVCVA). At the meeting, an expert analyst highlighted the potential uncertainties surrounding the tariffs, among other factors that decrease consumer confidence and may result in power results for the tourism industry in Las Vegas.

According to Jeremy Aguero, Applied Analysis’ principal analyst, who was recently quoted by the Las Vegas Sun, there are many unanswered questions at the moment, which is why it would be difficult to predict the impact of the tariffs. However, he acknowledged that there is a “very real threat” for the US GDP to record a decline due to factors that impact consumer confidence.

Aguero elaborated further that there is a “a combination of policies that are creating an unsettling condition throughout the entirety of the globe, including seeing the lowest consumer confidence we’ve seen in more than a decade — lower today than it was during the pandemic.” The expert added that “people are scared right now,” which is why they are likely to travel less, spend less and more unlikely to make major purchases.

LVCVA Expects Slight Dip In Room Tax Revenue

Steve Hill, LVCVA’s president, confirmed that the Authority expects a single-digit percentage decrease in room tax revenue. According to the executive, the LVCVA’s upcoming budget acknowledges a potential decrease of 5% in room tax revenue for the fiscal year ending June 30, 2025.

Out of the budget of $360 million, that potential decrease represents $18 million. Aguero supported LVCVA’s expectation for a decline in room tax revenue. However, the expert hoped that “reasonable minds will prevail.”

The impact of the recent tariffs is likely going to take a few months to materialize. Until that time, it would be difficult to predict potential decreases for tourism and visitation.

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