Las Vegas Prepares for Things to Get Worse Before They Get Better

The head of the tourism agency, Steve Hill, has said that the current situation was one of subdued demand, at a time when resorts have sought to discontinue resort fees temporarily to boost short-term demand.

Las Vegas’ Immediate Results Won’t Improve, But the Future Is Bright

This may work to an extent, but the Las Vegas Convention and Visitors Authority’s boss cautions that it probably won’t change the situation on the ground over the coming weeks. Visitation numbers are down by 6.5% or $1.15 million fewer people have visited Las Vegas through May.

Demand will not be picking up much over the summer either, with Las Vegas reporting the second-largest drop in hotel occupancy only behind Houston.

“The last couple of months haven’t been quite as good, and things are down a little bit, as everybody knows,” Hill acknowledged in a statement, taking stock of the known facts and what may follow.

But it’s not just visitation – revenue per room has also tanked by 14%, Hill added, which may be the more important metric of the two. He described the events of recent months as some of the worst on record, bar crises such as the September 11 attacks or the Great Depression – hardly a reassuring comparison. Lower visitation numbers has also meant another thing – lower gaming revenue.

Hill similarly spoke about the job market, acknowledging that there was stress among workers. “The top of the market is still doing fine and not having any difficulty, but folks around the country are concerned about their jobs and their financial situation, causing them to hesitate,” Hill explained.

He also talked about businesses’ abilities to absorb such shocks. The top of the market, Hill added, has gone mostly unscathed. They have been driving a decent number of people, even fewer, but it is the middle third of the market that could bear the brunt of the decline in visits.

Those Who Suffer a the Bottom Spread Their Pain to the Top

Just because the top is insulated to an extent doesn’t mean that it is not subject to shocks and knock-on effects, however, Hill clarified:

“But as the bottom of the market has suffered a little more, you will start to see the numbers happen that affect the entire city and you’ll start to see some of the properties that have six, eight or nine hotel resorts manage them differently depending on who their target audience is.”

 Hill also believes that these recent results are temporary and the subject of geopolitical jitters, confident that there is no alternative to Las Vegas and that people would be returning: “There is no place that provides the escape and opportunity for celebration with the intensity that Las Vegas does.”