A recent article in Newsweek highlighted the fall out from economic malaise and higher gas prices, and called for Las Vegas’ March tourism numbers to drop, even though the author admitted that February numbers were up 1.2%.
Well, despite the gloomy predictions, tourist traffic was actually up in the first quarter this year, including March. A recent summary of the Las Vegas economy published by In Business Las Vegas said:
According to the Las Vegas Convention and Visitors Authority (LVCVA), more than 3.4 million visitors came to town in March, putting the year-to-date count at nearly 9.7 million. This represents a 0.4% increase over the first quarter of 2007. Average daily auto traffic was also up.
These increases are in the face of the highest gas prices on record, airfares that are significantly higher than they were a year ago, and the lingering effects of the credit crunch and weakened consumer confidence.
Even more impressive is the fact that these numbers are benchmarked against 2007, Las Vegas’ strongest year ever. That tourism numbers are up even in today’s climate bodes well for Las Vegas’ future.
The Newsweek piece also discusses a drop in conventions in the first two months of the year. The article conveniently fails to mention that many conventions rotate from location to location, and that you can’t determine any meaningful trends from just one or two months.
For example, the International Builders Show , which historically draws around 100,000 people, is coming back to Las Vegas in 2009 and 2010 after being in Orlando the past few years. When you’re looking at just a couple of months a show like that can significantly impact the convention statistics- in either direction.
The article also keys on average daily room rates being down 3.8%, yet according to the LVCVA, total room nights occupied by tourists increased 8.7% for the month of March. That tells us that the hotel/casinos have found an equilibrium between demand and pricing. They’re trading a relatively small price decrease for a significant increase in occupancy, a strategy that makes sense when you consider that a significant portion of their revenue comes from gaming, entertainment, and restaurants.
Average room rates dropped just .8% in March versus 2007, which adds credence to the argument that rates won’t be going much lower.
In Business goes on to mention that:
Total Las Vegas employment is up 3% over last year to 932,400, and the total labor force is up 4.4% to 987,800.
Again, this is in a “down” economy, and is taking place nearly a year before we start to see the massive job growth that projects like CityCenter will spur.