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Benjamin Spillman

Las Vegas tourism: Holiday blues foreseen

23 May 2008

LAS VEGAS, Nevada – Forgive the grand pooh-bahs of America's foremost party town if they don't seem too festive this holiday weekend.

Las Vegas, a remote desert town built to indulge Americans' fantasies, is feeling fiscal pain from the rising cost of mundane commodities such as gasoline and food.

Simply put: Every extra dollar would-be tourists cough up at their hometown gas stations and grocery stores is a buck that won't be shoved into a slot machine, slipped to a hotel desk clerk in hopes of a room upgrade or tucked into a dancer's G-string this weekend.

"It feels more expensive these days than it was last year," said Steve Chen, 25, of Foster City, Calif.

Chen and five friends are scheduled to arrive in Las Vegas on Saturday night. But when they do, he expects to pay closer attention to his spending than during past visits.

"What we're looking for is more clubs or bars, lounges that don't charge cover," said Chen, a product manager for a Bay Area software company. "There have been many trips in the past where in general I just had more money."

He's not alone.

Through March, the most recent month with tourism data reported, Las Vegas visitation is flat compared to last year, with about 9.7 million visitors. Occupancy is down slightly to 89 percent, still good enough to lead the nation. But room rates were down 2.7 percent to an average of $132 per night, according to the Las Vegas Convention and Visitors Authority.

It will be months before official statistics are available to confirm or refute whether Memorial Day weekend was slower than last year. Anecdotal evidence suggests it will be.

Southern Nevada's largest resort companies, several of which committed to billions of dollars in debt to fund massive building projects during an economic boom that until recently seemed limitless, now are slashing room prices and tossing in food, gambling and entertainment comps to induce demand., a popular vacation-booking Web site, reports room rates are down 8 percent to 10 percent from Memorial Day weekend last year.

MGM Mirage, a resort giant with 10 major hotels on the Strip, says its resorts are "full or near full" for the weekend, but at lower rates than last year.

Station Casinos, which had a net loss of nearly $30 million during the first quarter, is promoting "locals only" vacation packages geared toward putting Las Vegas residents in hotel rooms at Red Rock Resort and Green Valley Ranch.

"There is still a lot of inventory out there," Bryan Allison, vice president of marketing for, said Wednesday afternoon. "We have more than 40 hotels still available right now."

It's no surprise people are finding it harder to set aside money for a trip to Las Vegas.

The current average cost for a gallon of gasoline compared to last year at this time is up 17 percent in California and Arizona and 16 percent in Nevada, according to data from the American Automobile Association.

Prices of food basics such as milk, eggs and meat have risen at double-digit rates since last year, as well.

At the same time the value of homes, a commodity that accounts for much of the wealth of typical Americans, is lower than last year in many places and could drop further.

The confluence of foreboding economic trends makes it tougher to convince people to crack open their wallets for a vacation to Las Vegas, or anywhere else.

"Obviously, we have a lot of meetings in reference to how we can fill our hotel," said Horst Dziura, general manager of the South Point resort on Las Vegas Boulevard at Silverado Ranch Boulevard. "An empty room never put a bet on a craps table."

South Point's Web site advertises double points for gamblers on Memorial Day weekend and Dziura said the hotel offered wholesalers two rooms for the price of one.

"If you make it more affordable, people tend to be more motivated to travel," he said.

Still, the price of oil topped $135 per barrel for the first time on Thursday, meaning gasoline prices will continue to rise and there is no apparent relief in sight.

Dziura is counting on the loyalty of repeat customers, who make up 72 percent of South Point's clientele, and looking further afield for new business.

The weak dollar, an economic phenomenon that makes Americans feel poorer, is providing Canadians and Europeans more purchasing power when they visit Las Vegas.

Dziura expects foreign customers, a group that represents about 12 percent of Las Vegas visitors, to become a larger presence.

In the short term, it isn't too late for Las Vegas to turn a bad beat into a run of gambler's luck -- at least for a weekend.

Allison said it is common for people to wait until the last minute before booking a Las Vegas vacation, especially if they plan to drive in from Southern California.

Attractions such as a UFC title fight, a concert by the Police and a performance by comedian Robin Williams are among the major events scheduled this weekend in Las Vegas.

New shows such as Cher's concerts at Caesars Palace and the "Jersey Boys" musical at Palazzo are also generating tourist traffic.

"As far as we see, there is still strong demand for the higher end shows," Allison said.

Despite the current downturn and turbulent economic outlook, it doesn't appear Las Vegas will dry up and blow away anytime soon, even if folks like Chen are cutting back.

"I still have got to relax and try to get away," he said.