Tag Archives: Las Vegas economy

That potent one-two Las Vegas punch has lost its zing. 

All year long it’s been a hard fought battle, with the bad economy and slashed discretionary spending yielding the crushing blows. 

Adding to the demise, with more than 150,000 hotel rooms and heavily dependent on convention business, the tough times are getting unbearable. 

Fewer people are visiting, let alone spending.  Many casino floors are half-empty during the day. 

Taxi drivers up and down the Strip complain that they wait a long time between pickups. The fares they do get negotiate nearly every rate and no longer tip even minimally. 

Even fewer flights are landing in Las Vegas – US Airways Group Inc. announced last month that it was cutting arrivals in half.  Las Vegas hotels are heavily discounting and are doing anything it takes to lure folks back. 

At the Imperial Palace, rooms are going for $25, $65 on Saturdays. At the Palms Casino Resort, a standard room costs $59, $99 for a studio suite. 

High-end casinos such as Mandalay Bay are offering rooms for about $109.99, with a special two-night-minimum promotion that includes a 50 percent discount on a suite upgrade, a two-for-one House of Blues restaurant voucher, $25 resort credits on food, beverage, or merchandise, and 30 percent off tickets for The Lion King. 

Las Vegas’ woes are also not a good omen for other casino towns – or tourist destinations in general.  The falloff effect is pronounced and enduring. 

“What happens in Vegas doesn’t stay in Vegas. What happens in Vegas spreads out to all the rest of us,” said Meryl Levitz, president and chief executive officer of the Greater Philadelphia Tourism Marketing Corp. 

“When Las Vegas greatly lowers its rates, consumers don’t think of it as Vegas being Vegas. They think along the lines, ‘Well then, I should be able to get a good deal anywhere.’ ” 

In September, for the first time since May 2008, the number of visitors to Las Vegas went up year over year – 4.3 percent. But the average daily room rate was down nearly 25 percent, to just over $92 a night. Gambling revenue was down 3.6 percent, the 21st straight monthly decline, according to figures released last week by the city’s convention authority.

All the big casino companies are feeling the pinch. Las Vegas Sands Corp., which owns the Venetian and the Palazzo on the Strip, reported a $123 million net loss for the third quarter that ended Sept 30. MGM Mirage, which owns 10 casinos, the most on the Strip, posted a $750.4 million net loss. And Harrah’s Entertainment Inc., which owns eight casinos here, had more than a $1 billion net loss. 

Conventions and meetings, which characteristically drive midweek Las Vegas room occupancy, are way off this year. Attendance is down 27.1 percent compared with the same period in 2008; the number of gatherings is down 18.2 percent. 

About 400 meetings were canceled from late 2008 to May, resulting in $166 million lost in nongaming revenue, so says the Las Vegas Convention and Visitors Authority. 

One reason: restrictions on using federal-bailout funds for certain types of corporate travel, said Rossi Ralenkotter, the authority’s president and CEO. The other: Las Vegas’ reputation as a lavish meeting destination. 

The town’s party-hearty image had to be tweaked, said Billy Vassiliadis, chief executive of R&R Partners Inc., the Las Vegas public relations firm that created the “What happens here, stays here” slogan. Its current campaign features high-level executives hard at work in Vegas. 

“We began delivering a much more sober business message and didn’t talk much about the play side,” Vassiliadis said yesterday. “We were dealing with the perception of whether it would be frivolous to hold a meeting in Vegas. Clearly, after the first quarter of the year, executives needed validation and support to come here for a meeting.” 

During a panel discussion last week at the annual Global Gaming Expo, also known as G2E, Ralenkotter said: “Las Vegas [has] worked hard to ensure that the value of face-to-face meetings was better understood. We have also worked hard to attract new business to Las Vegas and have signed 24 new contracts with [trade] shows that have either never been . . . or have not been here in more than five years.” 

G2E seemed to mirror its host town: more subdued, less boisterous. The event drew an estimated 25,000 gambling executives, regulators, slot manufacturers, and suppliers to discuss industry trends and showcase the latest products – down from 26,500 last year. Registered exhibitors numbered 566, down from 724, and the amount of exhibit space used at the cavernous Las Vegas Convention Center was 258,600 square feet, down from 335,480 in 2008. 

With the supply of convention visitors dwindling, luring back the leisure traveler became a priority, Jacob Oberman, a casino consultant with Los Angeles-based commercial real estate firm CB Richard Ellis Group Inc., said at a recent panel discussion on filling hotel rooms in a down economy. 

“They’re doing this by either giving gaming customers more favorable complimentaries than in the past, increasing their allotment of rooms, and presence with Internet wholesalers such as Expedia, [or] offering creative discount room offers and packages to the general public. 

It appears everyone in Las Vegas, or planning to go there, are cinching their belts a few notches.  It’s not that parites are not happening– it’s just they’re not as lavish or widely participated in as in the past.