Las Vegas Casinos Dying in the Desert
Las Vegas Economy was Built on a Week Foundation
To understand why the unemployment rate is so high and the economy is tanking so badly in the Las VegasValley one must only look to the hard numbers – who provides the Jobs in the Las Vegas Metropolitan Area.
The Numbers Published by City-Data suggests the real reasons:
Number of employees by the Top Employers
- Clark County Schools 20,000+
- Clark County 9,000+
- Bellagio 8,000+
- MGM Grand 7,000+
- Mandalay Bay 7,000+
- The Mirage 5,000+
- State of Nevada 5,000+
- Caesar's Palace 4,000+
- Las Vegas Police 4,000+
- UNLV 4,000+
As you can see the vast majority of jobs are in Government and Services. When services go south there are few opportunities and Government is reliant on a continually shrinking tax base.
All the big casino companies are feeling the pinch. Las Vegas Sands Corp., which owns the Venetian and the Palazzo on the Strip, as well as the Sands Bethlehem Casino in Pennsylvania, 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. – Philadelphia Inquirer
Room rates are down 25% year to year, and convention attendance is down 27.1%. According to the Las Vegas Convention and Visitors Authority the drop in convention attendance resulted in a $166 million decline in non-gaming revenue to the local economy.
Airlines are cutting back the number of flights into Las Vegas and raising the price per seat. With a decline in the Economy and the number 1 ranking in home foreclosures at 1:69 it’s easy to see why the construction industry is all but depleted and the 80,000+ construction jobs are all but gone. Las Vegas is experiencing negative population growth for the first time in decades.
Now add in the recent opening of the City Center Project jointly owned by Dubai World (Who just took a $10 Billion Dollar cash infusion and is more than $60 Billion in Debt) with it’s 8,000 additional high end hotel rooms and you have a real occupancy problem. CityCenter is going to put more pressure on older resorts to lower prices in order to compete for the high end traffic.
What does this all mean? It means Las Vegas is a great place to avoid right now… and probably into the foreseeable future. Economists at UNLV are predicting more job losses in 2010 with a trickle of job rehiring in 2010. All this based on some pie-in-the-sky hope for a general recovery.
UNLV’s report is wishful thinking in my opinion Even if I believed in a recovery, I do not believe that people will ever get back to the free spending ways of the past. Why? With more job loss, mortgage foreclosures, and the tightening of credit markets the impending inflation that will accompany even a moderate recovery is going to drive the price of Las Vegas Vacations beyond the point that consumers will find value in the proposition.
Las Vegas is a relic of past indulgence. Las Vegas is a testimony to poor planning, greed, and failed economic forecasting. Las Vegas is bad value for the money. Who would have thought Sky Rise Hotel Suites, Smokey Casinos, and 3rd Rate Shows would have survived this long?