Vegas Workers ‘Starting to Freak Out’ as Tourism and Tips Drop

What good are tax-free tips if there’s no around to do the tipping?

That’s the question facing workers in Las Vegas these days amid economic uncertainty and a decline in travelers from Canada, The Wall Street Journal (WSJ) reported Saturday (July 26).

As the report noted, the government gave these workers a boost earlier this month when it exempted up to $25,000 per year from personal income taxes. Workers say they’re happy with this move, but it’s not much help at a time when tipping income is falling.

“No tax on tips, that’s a rad thing. But it doesn’t really do us much good if there isn’t any people to get tips from,” said tattoo artist Charlie Mungo.

After the COVID pandemic, Mungo said he would earn from $3,000 to $6,000 each month, including tips. More recently, that number has fallen to $1,500 per month. The Canadian travelers who once amounted to nearly a third of his customers have become rare.

“We’re all starting to freak out,” he said.

Trips to Las Vegas for the first five months of 2025 were down 6.5% compared to the same period in 2024, the report added, citing data from the Las Vegas Convention and Visitors Authority. Foot traffic on the Strip is also down, according to phone-tracking data from Placer.ai. The hotel industry is hurting too: occupancy fell 14.6% year over year in June, with revenue per available hotel room declining by 19.2%, per figures from CoStar.

“It’s an old saying that if the economy sneezes, Vegas gets the flu,” Ted Pappageorge, secretary-treasurer of the 60,000 member Culinary Workers Union, told WSJ.

A downturn in tourism has retailers around the country concerned, with nearly $20 billion at stake, as noted here last week.

A report on the trend by Bloomberg News said that some travelers were avoiding the U.S. due to White House immigration policies. But even the tourists who do come have begun to reconsider spending amid higher hotel and restaurant costs.

Meanwhile, PYMNTS wrote earlier this year that a higher number of workers and businesses moving to tips in the wake of the tax law could trigger some pushback. PYMNTS Intelligence research last year found that nearly 30% of consumers felt tipping had gotten “out of hand” and that 17% of consumers had reduced spending due to tips.