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Gaming Guru

Chris Jones
 

Increase in Tourism Spending Bodes Well for Las Vegas, Official Says

23 March 2004

American travelers and the businesses that serve them spent more money in 2003 than in any 12-month period since 2000, the last full year before widespread economic troubles and the terror attacks of Sept. 11, 2001, disrupted global travel, a new federal report says.

That turnaround could represent great news for tourism-dependent destinations like Las Vegas, industry experts suggest.

Data released last week by the U.S. Department of Commerce's Bureau of Economic Analysis show the nation's tourism industry last year grew to $722.1 billion in total sales, up 3.5 percent from its prior-year total of $697.8 billion. The annual gain was the industry's first since 2000, when domestic tourism generated approximately $737.2 billion.

Jeremy Aguero, a principal with Las Vegas-based research firm Applied Analysis, cited improvements in the U.S. housing market, widely reduced tax rates and an improved sense of security as factors in America's apparent willingness to spend more on travel-related activities last year. Through 2004 and beyond, he expects this city will continue to reap the benefits of the sector's renewed health.

"While terrorism concerns remain on the mind of every American, people are getting back to their normal routines as time passes, both on a national and international stage. That bodes well for Southern Nevada, which bodes well for Las Vegas, which bodes well for new construction," Aguero said Monday.

"As we start to enter a new uptick with new properties coming on line like The Hotel (at Mandalay Bay), the Bellagio expansion and Wynn Las Vegas in April 2005, the timing of this upward trend couldn't be better for Southern Nevada."

Terry Jicinsky, senior vice president of marketing for the Las Vegas Convention and Visitors Authority, agreed.

"When demand goes up, obviously the pricing can go up to follow," said Jicinsky, who cited this January's 15.5 percent growth in average daily rates charged at area hotel and motels as further evidence of last year's growth momentum.

Broken into three major categories, last year's Commerce Department data offered mixed results for different sectors of the national tourism industry. Air transportation sales grew by $2.7 billion to $96 billion, a marked turnaround following losses of $15.7 billion and $9.8 billion in 2001 and 2002, respectively.

Restaurants and bars also reported steady growth for the third consecutive year with $387.3 billion, up $4.4 billion from 2002.

The news wasn't as good for the nation's hotels, motels and other lodging places, which dipped by approximately $100 million to $105.7 billion. Compared with 2000, last year's U.S. hotel and lodging sales were down $9.3 billion, data show. The report also factored several smaller categories that included automobile rentals, travel agency and professional sports club sales, among others, to calculate an industrywide total.

The survey included direct sales, such as how much a consumer paid for a meal or airline ticket, as well as indirect travel-related expenditures between suppliers and their industry, including food sold to restaurants or fuel purchased by airlines or railway operators.

Last month, the Las Vegas convention authority issued an annual visitor survey that showed local travelers budgeted less money for gambling and spent less on local shopping and entertainment in fiscal 2003 than they did in the previous 12-month period.

However, because that survey period ended June 30, its data would not include progress made during the final six months of last year, when citywide visitor volume, occupancy rates and gaming revenue were typically stronger than those from 12 months before.