Nevada Looking at 3-Year Recovery to Reach Pre-Pandemic Levels

Recovery in Nevada to pre-pandemic levels could take up to three years, economic analyst Jeremy Aguero has cautioned.

Nevada’s Recovery Road Could Take 3 Years

Nevada is looking at a long and sinuous recovery road, one analyst estimates, with Southern Nevada facing various challenges, from job cuts to reduced visitation rate, and the dangers of the novel coronavirus spreading throughout the Silver State unchecked.

According to Las Vegas economic analyst Jeremy Aguero, it could take between 18 and 36 months for Nevada to recover to pre-virus levels of economic activity. In other words, the most skeptical outlook puts Nevada’s recovery for 2023, providing there are no extenuating circumstances, such as another novel coronavirus outbreak.

With a vaccine reportedly underway, the virus could be fought on time. Aguero spoke at the Las Vegas Perspective, an online presentation dedicated to the economic impact of the gaming industry and the challenges it faces today and hosted by the Las Vegas Global Economic Alliance.

Recovery Slowly in the Making

According to Aguero, who held a 40-minute keynote, there is a difference between the economic problems that Southern Nevada now experiences and the problems ushered in by the coronavirus downturn. He did agree, though, that the health crisis has quickly transitioned into an economic one.

“Our economy is in recession,” Aguero said, and urged listeners to not second-guess the truthfulness of this statement. He drew historic parallels with the Great Recession which left 196,000 people out of a job within 2 and a half years, but the current crisis only took two months to out 280,000 people out of a job.

The key to recovery, Aguero explained, was in consumers who are now acting very differently according to him.

Incentivizing Consumers as the Saviors of Nevada

According to Aguero there are several types of consumers. The first ones are going to stick to health authorities’ advice and go out about their lives as recommended by health authorities. Others will choose to stick and live in a bubble for as long as they can, minimizing contacts with third-parties.

In any eventuality, airlines have been struggling as the inbound flights for Las Vegas have dropped significantly. Most fliers aren’t interested in risking getting infected on a flight, and they have been avoiding it.

According to the Transportation Security Administration, some 2.3 million people fewer cross checkpoints at airports every day, comparing the numbers with prior to the pandemic. Airlines have tried to do their part as well, offering to fly in planes with only 67 people in and keep the middle seats on their Boeing 737s empty to ensure some form of distance.

However, to start climbing out of the financial precipice, airplanes will have to be filled to at least 75% of their capacity. Visitors have been mostly driving to Nevada, but as things stand, Aguero cautioned, Nevada had little control in what happens with the state economically if consumers stop visiting again.

Inter-State Quarantines Imposed

Another issue that Las Vegas and Nevada in general will face is the introduction of quarantines between states. In other words, a person may not go back to their own state without having to sit in a mandatory 14-day quarantine period, which will make the idea of traveling to Las Vegas even more off-putting to some. 

Aguero believes that the right way to proceed is by putting employees back to work, but that would also require spending down reserves and getting more federal stimulus. Treasury Secretary Steven Mnuchin introduced a rescue package worth $1 trillion dollar designed to help struggling businesses.