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Howard Stutz

Vegas visitor volume dips in August

12 October 2009

LAS VEGAS, Nevada -- Las Vegas visitor volume fell 3.7 percent in August, the 15th straight month the number of tourists coming into the region has decreased.

Almost 3.1 million travelers came to Las Vegas during the month, compared with 3.2 million in August 2008, figures released Friday by the Las Vegas Convention and Visitors Authority show. Visitor numbers have fallen 18 times in the past 20 months.

For the first eight months of 2009, 24.4 million visitors traveled to Las Vegas, a decline of 5.8 percent compared with 25.9 million visitors in the first eight months of 2008.

Room occupancy in August was 81.4 percent, down 6.9 percent from a year ago, despite various promotional activities used by casino operators to spur visitation during the summer months.

"Occupancy levels are pretty much back to where they were. They've stimulated a lot of people to come to market with very aggressive pricing discounts," Robert LaFleur, an analyst with Susquehanna Financial Group, told Bloomberg News. "People showed up and didn't spend anything much on the rooms so they're spending more on gaming."

For the first eight months of 2009, room occupancy levels are down 6.2 percent compared with 2008. The average daily room rate was down 21.5 percent in August, compared with a year ago, and 25.4 for all of 2009.

In its monthly summary, convention authority officials said the year-to-date citywide room occupancy rate of 82.7 percent continues to track higher than the national average of 56.6 percent reported by Smith Travel Research.

Convention business also took a hit in August. Attendance was down 58.9 percent with almost 300 fewer conventions held in Las Vegas during the month. For the year, convention attendance is off 30.2 percent.

USA Today reported Thursday that Las Vegas is losing convention business to cities deemed to be not as lavish or those that might raise concerns that companies are frivolously spending travel dollars.

The convention authority said the economic climate and scheduling differences were the primary reasons convention attendance was down by more than 339,000 attendees.

Wells Fargo gaming analyst Dennis Farrell Jr. said the recession continues to influence consumers' cautious spending attitudes concerning travel and entertainment.

"Our thesis remains unchanged as we still believe Las Vegas Strip operators will continue to face a challenging environment," Farrell told investors. "Economic weakness continues in California, the Strip's largest feeder market."

He said visitation will continue to be hurt as tourists cut back on their number of trips to Las Vegas and reduce their spending habits. Farrell said new hotel rooms, such as the 6,000 rooms opening in December at MGM Mirage's $8.5 billion CityCenter project, will continue to keep room rates at lower levels.

Outlying areas in Clark County also had tourism declines.

Laughlin visitor volume decreased 8.8 percent in August and travel to the Colorado River community is down 10.8 percent for the first eight months of the year.

Visitor volume to Mesquite was off 41.2 percent in August and the community has seen 29.7 fewer travelers throughout all of 2009.