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Benjamin Spillman

Vegas tourism continues to slide

11 December 2008

LAS VEGAS, Nevada -- Las Vegas visitation fell 10.2 percent to 3 million people in October, the biggest drop since a 14.1 percent decline in September 2001.

That's according to the Las Vegas Convention and Visitors Authority's latest monthly visitation report.

The report is yet another indicator the Las Vegas economy is suffering a massive hangover from several years of living high on cheap gasoline, easy mortgage money and generous airline service.

There's little solace in the 41 categories of numbers the authority uses to track visitation to Southern Nevada -- save for a 14.3 percent decline in the average daily room rates, which is good news for skinflints looking ahead to their next vacation.

The average rate of $115.68 in Las Vegas reflects a demand decline that has resorts cutting rates to levels that put even top-tier properties within reach of folks still fortunate enough to have steady jobs and stable mortgages.

The occupancy rate in Las Vegas, a number that measures the percentage of full rooms, was 83.8 percent for the month, a decline of 8.5 points from the previous October.

"People are not opening their wallets to the level they have been in the past," said Kevin Bagger, the authority's director of Internet marketing and research.


And the fallout is clearly rippling through the Las Vegas economy.

The ratio of employees to hotel rooms is down to 1.25-to-1, the lowest level since the Sept. 11, 2001, terror attacks crippled the travel industry. The ratio peaked at 1.4-to-1 in January 2001.

Jeremy Aguero of the economics firm Applied Analysis, the source of the staffing-to-room ratio, said October was bad for a couple of reasons.

For starters, October of last year was perhaps the peak for the national economy and visitation and spending in Las Vegas was particularly high. As a result, October of this year looks especially bad.

On a more fundamental level, the most recent October was the time when Americans were first coming to grips with a fiscal crisis that included massive bank failures, widespread home foreclosures and layoffs.

"We don't expect that level of decline to continue, but those are the effects we're seeing immediately," Aguero said.

To put the October decline in fuller perspective, the dip of about 300,000 people year-over-year represents roughly the total number of visitors in Las Vegas on a busy weekend or holiday such as New Year's Eve.

"You have 180,000 workers dependent on that spending," Aguero said.

It isn't just Las Vegas, either.

Visitation to Laughlin fell 10.5 percent for the month to 225,375. For the year, the gambling town on the Colorado River welcomed about 2.4 million visitors, a decline of 7 percent from 2007.

Room rates were up 3 percent in Laughlin to an average of $39.14 per night.

Mesquite visitation was off 14 percent for the month to 129,434. The yearly pace through October is down 7.4 percent to 1.3 million.

Room rates in Mesquite fell 32 percent to $53.91. The October numbers don't reflect a decision by Black Gaming to close the casino and restaurants at the Oasis on Friday, which put 340 people out of work and will likely contribute to more dismal numbers coming from Mesquite for December.

Officials at the Las Vegas Convention and Visitors Authority are reacting to the tourism slump by pumping $4 million into their efforts to market Southern Nevada as a recession-friendly getaway. Spokesman Vince Alberta said the agency this fall implemented 5 percent cuts throughout the organization to infuse the marketing effort with $2 million in the fourth quarter and another $2 million in the first quarter of 2009.

Alberta also said landing the winter baseball meetings for the first time will contribute to the cause.

The meetings, held this week at the Las Vegas Convention Center and the Bellagio, don't attract a huge number of participants but are widely covered in the news.

"It is getting (Las Vegas) a lot of publicity on the sports shows," he said.