Tag Archives: Las Vegas economy

Las Vegas’ Rough Road Continues

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.

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Las Vegas Mothballs $4.8 Billon Echelon Resort

With a growing list of partially finished resort projects dotting the Las Vegas skyline, the shelving of the $4.8 Billion Echelon project joined the ranks of the Strip boneyard late last week. Echelon

The Boyd Gaming project, on the site of the formed Stardust, which was imploded in August 2008, plans to remain dormant for three to five years.  It’s across the street from the bankrupt and shuttered Fountainbleau, who is still courting suitors, Echelon is located on 87 acres of what was prime real estate.  Only an unusuable parkeing garage, unfinished power plant and bare steel-and-concrete remain. 

In the meantime, Boyd will spend an estimated $15 million a year to secure and maintain the property that was once destined to be five hotel tower site with 5,000 rooms.

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Holy Cow! Huge Las Vegas Casino, Sign Planned

In another bit of welcome good economic news, the Las Vegas City Council approved plans for a new casino and sign at the corner of Las Vegas Boulevard and Sahara Avenue by the end of this year. 

Not just any usual Las Vegas sign, mind you, but a 98-foot, 11,200-square-foot electronic sign at a high-profile intersection where the city of Las Vegas meets the Strip. 

On the site of the former home of the Holy Cow! brewery, which closed in 2002, plans now call for a 37,100-square- foot bulding with a 9,000-square-foot casino, a 6,000-square-foot restaurant and 4,000 square feet of retail space, including a Walgreens. 

Bucking the construction tide (not suprisingly, with Las Vegas facing an excess of room inventory), no hotel rooms are planned for the property. 

In 2004, the Las Vegas City Council approved plans for a 73-story building with 960 condominius on the site, but the lands was placed back on the market in 2005; new owners bought the property in 2007.

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Las Vegas Ranks Last in Forbes Magazine List for Working Mothers

If you’re a working mom, there are at least 49 better cities to live in than Las Vegas, according to Forbes magazine. The publication ranked Las Vegas at the bottom of the list for working mothers. workingmoms

The list is based on a recent evaluation of the 50 largest U.S. metro areas in such categories as earnings, unemployment, cost of living, violent and property crimes, health care, per-capita school expenditure per pupil, the number of day care facilities and preschools, and park acreage.  

Las Vegas also achieved near cellar dweller status in many contributing categories, including ranking 43rd in employment, 49th in pediatricians, 46th in school quality, 47th in violent crimes.   Other categories didn’t fair much better, mostly in the mid-30s ranking.  The only bright spot of sorts, surpisingly, was a 14th ranking in health care.  

“There are numerous considerations for what working moms want in their choice of a city,” ForbesWoman writer Heidi Brown, who edited the list, said in a statement. “We based our rankings on the premise that different mothers have different needs. Beyond good health care and safety, mothers who work want a city which offers plentiful jobs, high salaries and abundant day care options.”  

The New York metro area took first place on the list, followed by Austin, Texas; Minneapolis/St. Paul; and Milwaukee.

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Las Vegas Performing Arts Center Breaks Ground

Any cultural and business development in Las Vegas is a good thing in our sputtering economy.    But the Smith CenterSmithCenter Smith Center of the Performing Arts groundbreakingfor the Performing Arts groundbreaking ceremony at the newly named Symphony Park yesterday in Las Vegas wasn’t just any commonplace development- it provides a significant cornerstone to energize the Las Vegas economy, not just when it opens early 2012, but all during the building crescendo. 

“This is being built to be here for the next couple of hundred years and that’s significant in a town that has a tendency to blow things up after 30 to 40 years,” said Don Snyder, the center’s chairman told approximately 150 invited guests, including Fred W. Smith and wife Mary, the namesake for the center. 

The Las Vegas Philharmonic and Nevada Ballet Theatre will be permanent residents of the center. Smith Center of the Performing Arts groundbreaking

The center will be anchored by a 2,050-seat main theater and includes an education facility, a cabaret theater and space for children’s and community events. 

Asked afterward about those skeptical of the money spent on the $485 million center and its cultural mission in a city that struggles to get past of its “Sin City” reputation, Las Vegas Mayor Oscar Goodman had some choice words for skeptics:Smith Center of the Performing Arts groundbreaking

“To those people I say, we have a lake out there, they can jump in it.  And I’d put the cement on their feet…This is the equivalent of getting an NFL franchise…We still want to have great entertainment and hotels and food and bring in tourists, but for people who live here, these are things that make a world-class city.”

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Las Vegas Tourism Industry Faces Tough Times

The $231.2 million budget for the Las Vegas Convention and Visitors Authority – the group charged with the responsibility for attracting visitors to Las Vegas – will be punctuated by 12 months of spending cuts, a hiring freeze and ban on employee overtime. 

“We’ve had to adjust in ways we’d never dreamed of,” said board member and MGMG Mirage executive Chuck Bowling, in a board of directors meeting last week. 

The loss of $65 million from room tax is creating challenging budget choices, which is 11 percent smaller than the budget for the 2009 fiscal year. 

The authority will save $23 million in the upcoming year as a result of a decision to suspend work on a proposed $890 million renovation of the Las Vegas Convention Center.   

It will save an additional $2.4 million on salaries, wages and benefits across all departments, thanks in large part to a current hiring freeze that covers 50 open positions and tight overtime restrictions. 

Their advertising budget is not immune from the axe, as the authority shaved $3.3 million, leaving a budget of $86.5 million to advertise Las Vegas to the world. 

Declines are expected to become less steep in September, which will be one year since the Las Vegas economy went into a nose dive.

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One Up, One Down in Las Vegas Recession Game

The recession has slowed much of the recent growth in downtown Las Vegas, but Mayor Oscar Goodman’s dream of a downtown renaissance is still alive.  Goodman cut the ribbon at last Thursday’s opening of the El Cortez Cabana Suites, a boutique hotel adjacent to the longtime downtown property. 

The Cabana Suites, developed on the site of the 100-room Ogden House, is located at the corner of Ogden Avenue and 6th Street.  Billed as the “sassy younger sister” to the El Cortez, owners hope the aqua-blue exterior and posh lobby make the property stand out in a neighborhood that has seen stunted growth in recent years. 

Word also came last Friday that another Las Vegas downtown business, the Galaxy Theaters at Neonopolis, closed its doors. The move leaves the once promising entertainment complex without an anchor tenant.

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