 The
Las Vegas Economy:
How Is Sin City
Coping?
Las Vegas, long
thought to be immune
from any recession,
suddenly found
itself among the
hardest hit in the
shadow of a rattled
economy.
Surging fuel prices
and a mortgage
meltdown continue to
wreak havoc in
Vegas.
Gambling itself may
be "recession proof"
(the struggling
economy hasn't
necessarily affected
the online gambling
establishments), but
it's getting to
Vegas where the
problems may arise.
Having to pay higher
air fares, gas
prices for those
traveling by car and
the realities that a
Las Vegas vacation
may not necessarily
fit into one's
financial budget are
just a few of the
variables affecting
Sin City's economy.
The housing crisis
has made it more
difficult for locals
to enjoy the casinos
as well. Even
those not involved
in direct
foreclosures may be
hurt indirectly as a
result of increased
maintenance fees and
rises in monthly
mortgage payments.
"I am concerned
(about the Las Vegas
economy),"
Congresswoman
Shelley Berkley told
US Today.
The former
cocktail waitress
and casino lawyer
hardly seems
optimistic.
"I represent a
couple of million
people who depend on
hotels and gaming in
some way. We've
usually been
recession-proof, but
(after big casino
layoffs this year)
our unemployment
rate is a tick above
the national
average. And 46% of
visitors come
through the airport,
and they're cutting
flights."
Tim Poster: A gaming
expert who partnered
with Breitling in
the Golden Nugget,
can concur with
Congresswoman
Berkley.
"We're more
vulnerable to
recession this time
around. Once, rooms
were $40-$50 a night
and meals were
cheaper."
Now there are lots
of pricier
properties with
higher overhead.
In many ways, the
economic woes faced
by Vegas could
benefit visitors.
Industry analysts
expect hotel room
rates to be slashed
significantly.
"You are going to
see great deals on
the Strip, even
double-digit rates
(at lower-end
properties),"
Tom Breitling:
Former co-owner of
the Golden Nugget
casino, told USA
Today. "For a lot of
people who felt
Vegas was
overpriced, it's
getting more
affordable."
"The overall
economic uncertainty
this country is
facing ... makes the
outlook for the next
several months very
murky," said Gary
Thompson, spokesman
for Harrah's
Entertainment Inc.,
owner of seven Las
Vegas casinos.
Airlines Cut Flights
US Airways announced
Thursday it would
cut its Las Vegas
operations nearly in
half by the end of
the year. It'll go
from a high of 141
departures last year
to 81 flights on
Sept. 3 and to 74
flight by year's
end.
The US Airways
night-flight hub
operation,
established in 1986
by predecessor
America West
Airlines, makes the
carrier McCarran's
second busiest
airline.
"We've seen airlines
increase and
decrease service
periodically.
Clearly, never to
this extent all at
once," said Alan
Feldman, a spokesman
for MGM Mirage Inc.,
which owns 10
casinos on the Las
Vegas Strip and
plans to open
CityCenter next
year.
"As far as filling
the rooms, the lack
of airline service I
think is going to
have an impact on
the entire
community," Thompson
said.
The top five largest
scheduled airlines
at McCarran in
number of passengers
carried in 2007 are
Southwest Airlines
(34.63%), US
Airways/ US Airways
Express (21.98%),
United Airlines/
United Express
(7.16%), Delta
Airlines/ Delta
Connection (5.67%),
and American
Airlines/ American
Eagle (4.84%).
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There will be
beneficiaries from
the cutbacks:
Specifically
Southwest Airlines,
the industry's only
profitable carrier.
Las Vegas is
Southwest's busiest
airport with 240
flights. It is
one of the few
airlines that has
announced continued
growth plans over at
least the next year.
Newcomer Virgin
America will also be
adding flights to
and from Las Vegas,
albeit on a smaller
scale.
Despite a 10 percent
cut in flights from
the airline, which
is less than a year
old, Virgin says
they intend to move
forward with a
planned New York to
Las Vegas route.
Likewise, long
established Virgin
Atlantic has
announced an
increase in their
services between
Gatwick Airport and
Las Vegas from the
six flights every
week that they
operate to a
dedicated daily
service.
In the end, Las
Vegas is going to
have to become even
more creative.
The Venetian has
already started to
lead the way.
That hotel property
is offering rooms
set according to the
temperature in the
desert oasis,
anywhere from $104 a
night to $115 a
night later in the
summer.
----
Christopher
Costigan,
Gambling911.com
Publisher
CCostigan@CostiganMedia.com
Originally published
June 20, 2008 9:43
am EST
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