Although most hotels have been seeing a turn around from this recession, Las Vegas has failed to see the end of it. This has been the worst economic fall for Las Vegas since the creation of casinos in Nevada in the 1940s.
Although economists are still hopeful that casino revenue will bounce back soon, they doubt that it will be able to make up for the fall of the construction industry which is a huge part of Las Vegas' success.
Unemployment in Las Vegas is at about 14%, whereas 10 years ago, it was at just about 4%. The Plaza Hotel and Casino has just announced that they are planning on laying off 400 workers and closing off parts of the hotel and casino for renovation, a common trend in hotels these days. (Nagourney)
Gaming revenues have been declining for the past three years and are continuing to. This is a result of the decreased recreational travel and gambling during recessions. Economists also believe the baby boomer generation is less likely to gamble because of belief that there will be a lack of retirement funds. (Nagourney)
It is tough to say that the hotel and casino industry in Las Vegas will pick up as soon as the economy does because people have not been saving much money during the recession. We have seen turnarounds in the hotel industry caused by business travel. This may be a large reason why things have not been looking any better in Las Vegas. Las Vegas is a huge recreational vacation and tourist spot, rather than business. However, I do think things will slowly begin to turn around as people's expectations for the economy go up.
http://www.nytimes.com/2010/10/03/us/03vegas.html?_r=1&scp=7&sq=hotel%20industry&st=cse
This is an interesting article and I am surprised that the hotel industry in Las Vegas is not doing well at all...Someone I know is always going to Las Vegas so I guess I just assume many other people are as well. But I suppose it makes sense, considering Las Vegas is primarily tourism. Las Vegas is a very expensive city to visit and many people do not want to pay that type of money to see a city set in the middle of a desert, especially during a recession.
ReplyDeleteI am also surprised by the unemployment rate in Las Vegas. I am not sure what the national average is right now, but 14% seems extremely high. I am curious to see what will happen to the hotel industry in Las Vegas over the next few months, as well as the city itself.