- Las Vegas hotels face slower demand.
- Lodging companies raise RevPAR, EBITDA forecasts.
- Wynn leverage expected to fall after expansion.
Travel spending has held up despite higher fuel prices, airfares, interest rates and hotel rates. A stable labor market, high financial asset prices and an aging population have helped support spending. Lodging companies also have enough financial flexibility to manage a possible downturn.
While the wider lodging sector remains steady, Las Vegas continues to face challenges. Visitor numbers were largely unchanged year to date, while airline passenger traffic fell 7 percent. Domestic passenger traffic has declined for 13 consecutive months and annual visitor numbers remain below pre-pandemic levels. Hotels are also struggling to attract higher-spending guests and the report expects weak third-quarter results.
Some industry participants expect demand in Las Vegas to improve in the fall. Group bookings, conventions, sports and entertainment events could bring in more visitors. They also expect travel patterns to return to normal seasonal levels as visitors avoid the summer heat.
Orlando is also facing slower visitor traffic. Airline passenger traffic fell nearly 7 percent year over year in August, while year-to-date traffic remained flat. Disney reported a 3 percent increase in domestic park attendance in the second quarter of 2026, but attendance at Universal Orlando and United Parks Orlando declined.
Despite these challenges in key markets, lodging companies are generally expected to remain within their credit rating limits. Wynn Resorts is an exception, with leverage expected to remain temporarily above its downgrade threshold as it funds the Al Marjan joint venture and Wynn Palace expansion. Its leverage is expected to decline after the projects are completed.
CoStar data showed U.S. hotel occupancy rose to 70.6 percent, ADR reached $179.58 and RevPAR climbed to $126.79 in the week ended Oct.10.
