Las Vegas Sun: How the Iran war is already further driving up Las Vegas travel costs

As the war in Iran continues, its economic shockwaves are already being felt in Nevada — most visibly through rising fuel costs that could ripple through the state’s tourism-dependent economy. From costlier jet fuel driving up airfares to higher gas prices affecting road travel, local officials and tourism leaders are bracing for potential pressures on visitation during one of Las Vegas’ busiest seasons.

The conflict, which began with U.S. and Israeli strikes on Iran in late February, has already pushed up global oil and jet fuel prices, raising concerns for airlines, travelers and cities reliant on visitor spending. Though the effects remain largely economic for now, analysts warn they could deepen if fuel and supply costs continue climbing into summer.

“The travel industry is navigating a complex set of challenges, with war-driven fuel prices adding to the headwinds,” Steve Hill, president and CEO of the Las Vegas Convention and Visitors Authority, said in a statement to the Sun. “Rising gas prices and significantly higher jet fuel costs are impacting travel affordability, but even in a shifting global environment, we remain focused on keeping Las Vegas top of mind for travelers worldwide.”

NBC News reported March 31 that a looming global jet fuel shortage from the war would have a direct effect on airfares in the upcoming months as airlines pass increased costs onto consumers.

The average price for a gallon of jet fuel reached $4.64 on Thursday, up from $2.50 the day before hostilities began Feb. 28, according to Argus Media’s U.S. Jet Fuel Index. That’s an increase of roughly 86% in about five weeks.

Globally, jet fuel has more than doubled since the war began, surpassing $195 a barrel, according to Foreign Policy magazine. In major U.S. airline hubs including Chicago, Houston, Los Angeles and New York, the average price was $4.88 per gallon Friday, according to Argus Media.

The U.S. refines nearly 2 million barrels of jet fuel daily but consumes roughly 1.8 million, according to Foreign Policy magazine. Most refining capacity is concentrated along the Gulf Coast, while the West Coast has long relied on imports from Asia — shipments now disrupted by war-related instability across major trade routes. As a result, cities such as Las Vegas, dependent on West Coast fuel supply chains, face heightened vulnerability to rising prices.

Some airlines already are taking steps. JetBlue recently announced it was raising baggage fees, citing “rising operating costs,” while United Airlines announced Friday it would begin charging most passengers an additional $10 per bag to check luggage.

“We have to raise prices to deal with higher fuel prices,” said Scott Kirby, CEO of United. In a later memo, he added that it “may be a challenge to continue passing through much of the increased fuel price if oil stays higher for longer.”

Airfares have already been rising too. Data from OAG, a flight information group, shows average airfares in the past week reached $465, the highest for that same period since at least 2019. Compared with the same time last year, ticket prices are up 24%.

Flight schedules could also be reduced, driving up demand — and prices — for flights that remain.

Southern Nevada has already struggled with tourism numbers since last year, seeing year-over-year rates of flight passengers, daily room occupancy and average daily room rates down since President Donald Trump returned to office in January 2025.

This February, the number of passengers traveling through Harry Reid International Airport in Las Vegas — nearly 3.9 million — was down 3.3% compared with the same month last year, according to data from the airport. The year-to-date total of arriving and departing passengers has decreased by almost 6%, with a 15% drop in international flights and almost 5% dip in domestic fliers.

In 2025, visitor volume was down 7.5% from a year earlier, daily room occupancy by 3.3% and average daily room rates by 5% by the end of the year in Las Vegas, data from the Las Vegas Convention and Visitors Authority showed. Among the few areas of growth at the end of 2025 was daily automobile traffic on all major highways, which rose by 1%.

But even the number of drivers who crossed the border from California — one of Las Vegas’ more represented visitor populations — also decreased.

Further dips in tourism could have far-reaching impacts, especially on local jurisdictions and their budgets. Officials with the city of Las Vegas said it already was considering possible effects the Iran war could have on its upcoming fiscal year 2027 budget.

Mike Janssen, city manager, presented the city’s tentative budget for 2027 with CFO Susan Heltsley and Rosa Cortez, deputy city manager, during the city council meeting Wednesday. The three echoed the same warning: Any ill effects on tourism to Las Vegas would trickle down to the city’s general fund.

In January, Janssen and his team met with the city’s financial advisory committee to review the outlook for consolidated tax, or C-tax, which is one of the major revenue sources for Nevada local governments. The committee — made up of financial officers from the casino industry, homebuilders and several economists — projected C-Tax growth of about 2.5% to 3%.

Fast forward almost two months later, and energy prices have now surged as a result of the conflict in Iran. Janssen said the hostilities could have “a big impact on our community, particularly as it relates to visitation” because of increases in the cost of both jet fuel and gasoline.

Since the onset of the U.S. and Israeli attacks on Iran, the price per barrel of West Texas intermediate crude oil has gone from around $67 to more than $112 per barrel in trading Monday, according to CNBC.

States like California, whose residents make millions of trips to Las Vegas annually, have already seen major jumps in gasoline prices, with a regular gallon already costing around $6 — a 28% increase from the $4.59 per gallon prior to the war.

“It’s a significant increase from where it was when we were looking at this in January, so we’re mindful of that if it gets corrected in a reasonable manner, we’ll be in a better position but we’re trying to plan for something that could be more impactful,” Janssen said.

Heltsley noted that “with jet fuel being up and the price of gas being up, we could see some tourists not coming and, of course, that’s what drives a lot of our c-tax revenue.”

The city is already predicting general fund revenue will be down by almost 3%, but there has been no mention of expected major cuts to city programs, and the general fund budget is still expected to be in a surplus.

Not everyone is as concerned about possible tourism effects.

The Nevada Resort Association told the Sun that it wouldn’t speculate, but President and CEO Virginia Valentine believes it’s a storm the region’s economy can weather.

“We’re closely monitoring consumer sentiment,” Valentine said. “As demonstrated during past challenges, including the pandemic, the Sept. 11 attacks and the Great Recession, Nevada’s resort industry has proven to be adaptive, resilient and well-positioned to navigate possible challenges ahead.”

At the Vegas Chamber’s Business Power luncheon Thursday, Gov. Joe Lombardo touted his administration’s work to diversify Nevada’s economy since he stepped into office in 2023.

He pointed to private investment in the state, the creation of more than 44,500 jobs, and the emergence of Las Vegas as a sports destination with events such as the annual Formula 1 Las Vegas Grand Prix and the Super Bowl, which was held in 2024 and will return in 2029. That sports economy was one way the region could help diversify its economy, he claimed.

“Diversifying the economy is important — you’ve heard me talk about that from Day 1,” Lombardo said. “Why is that? Because you saw the results of COVID. We were the first out and the last to come back in because of the lack of diversification. The more diversified we are, the stronger we are.”

Higher costs, other side effects and anti-war sentiment are fueling dissatisfaction among Americans as the war continues into its second month. Data from the Pew Research Center shows that about 6 in 10 Americans, or 61%, disapprove of Trump’s handling of the Iran conflict, and 59% believe the U.S. choice to use military force in Iran was wrong.

About 40% of Americans surveyed also said they thought the conflict in Iran was making the country less safe, the study reported.