The Las Vegas Strip says goodbye to the iconic Tropicana property tonight

The Las Vegas Strip will see the first implosion of a major resort property since 2016 when three Riviera hotel towers were brought down. The Tropicana Las Vegas is scheduled to be imploded at 2:30 a.m. Pacific Time to clear ground for a $1.5 billion 30,000-seat baseball stadium expected to be ready in 2028 for the A’s major league baseball team and a “world-class” entertainment resort destination that is being created in partnership with Bally’s Corporation (NYSE:BALY).

The Tropicana Las Vegas, opened in 1957, was once considered the epitome of luxury and flash on the Las Vegas Strip after setting a record for development costs. Despite its ties to organized crime figures like Frank Costello, the Tropicana became a haven for legendary entertainers and was used in iconic films like The Godfather and Diamonds Are Forever. The closing of the Tropicana means that the Sahara and Flamingo are the properties on the Las Vegas Strip with the closest ties back to the 1950s.

The implosion of the Tropicana is expected to give a minor bump to Excalibur, MGM Grand, Luxor, and New York, New York this week as some visitors look to book rooms to watch the pyrotechnics. In general, casino operators on the Las Vegas Strip have a near-term earnings catalyst on the horizon after the closing of the Tropicana and The Mirage Hotel & Casino reduced the total room supply on the Las Vegas Strip by almost 5%. The company that operates the most hotel rooms on the Las Vegas Strip is MGM Resorts International (NYSE:MGM), with nearly 37,000 rooms across 13 properties, including Luxor, Aria, Excalibur, Bellagio, Mandalay Bay, The Cosmopolitan, Park MGM, and New York-New York. Caesars Entertainment, Wynn Resorts (WYNN), and Genting Group are also major players. Behind the scenes, VICI Properties (VICI) owns Caesars Palace Las Vegas, MGM Grand, and the Venetian Resort Las Vegas. In particular, analysts think some of MGM Resorts (MGM) and Caesars Entertainment’s (NASDAQ:CZR) middle-tier properties could see a benefit until Hard Rock International develops the former Mirage site. Hard Rock International announced in May that it plans to reopen as the Hard Rock Las Vegas in spring 2027.

CBRE Equity Research analyst John DeCree and his team estimated potential incremental EBITDAR generation for Caesars Entertainment (CZR), Golden Entertainment (GDEN), MGM Resorts International (MGM), and Wynn Resorts (WYNN) based on each operator taking their fair share of The Mirage’s one million occupied room nights in FY23. For investors, DeCree believes the significance and longevity of the supply contraction remain largely underappreciated.