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Casino Industry Faces Building Drought

LAS VEGAS, Nevada – Dec. 13, 2001 –With no Strip megaresort openings scheduled for the next few years, Las Vegas needs to find new ways to market itself, a University of Nevada, Reno casino industry expert said Wednesday.

Three waves of Strip megaresort openings since 1989 have had a direct, positive impact on the number of tourists visiting Las Vegas, said Bill Eadington, director of UNR's Institute for the Study of Gambling and Commercial Gaming.

Steve Wynn's Le Reve project on the Desert Inn site, tentatively slated to open in mid-2004, is likely to be the first new megaresort since the Aladdin opened in August 2000.

With no new properties to excite the imagination of the traveling public, Las Vegas needs to re-create itself yet again, Eadington told about 500 tourism industry executives gathered at the Rio on the last day of the three-day Governor's Conference on Travel & Tourism.

"Las Vegas has a remarkable history of reinvention," Eadington said. "What is called for is an appeal to the next generation."

Among the ways Las Vegas could appeal to twenty- and thirty-something tourists would be a new generation of attractions and entertainment, linking the Las Vegas casino experience with cultural elements popular with the tattooed and pierced crowd.

Building extreme sports facilities and providing hip entertainment and links connecting the casino industry with movies, music and celebrities are ways Las Vegas can reach out to younger people and propel visitor growth, Eadington said.

Despite Wynn's plans for the Desert Inn site, it's difficult to foresee a fourth wave of megacasinos, Eadington said.

Casino operators recognize that the most recent wave of openings at Bellagio, Mandalay Bay, The Venetian, Paris Las Vegas and the Aladdin have reported disappointing returns compared with the billions spent to build the properties, he noted.

"Steve Wynn is the canary in the mine shaft," Eadington said. "If Le Reve is successful, perhaps other operators will also build."

And it was new megaresorts that drove the double-digit annual increases in tourist visitation in the early '90s.

"It's the appeal of the new megacasinos that puts Las Vegas on the front pages of travel magazines and spurs interest in the city," Eadington noted.

Las Vegas will have to use its marketing prowess to overcome the absence of new properties, he said.

"How long can Las Vegas hold the national spotlight with a stagnant and - in Las Vegas terms - aging market?" Eadington asked, before guessing that growth in the number of tourists visiting Las Vegas will likely remain relatively flat.

The national economy and the status of the war on terrorism will also have a significant impact on Las Vegas tourism, the professor added.

Another terrorist attack could further traumatize the public's willingness to fly, Eadington said, a circumstance with devastating implications for Las Vegas, as 46 percent of Las Vegas visitors arrive by air.

The city's resort economy would also take a big hit if the national economy stays in recession, he said, noting that the current problems aren't insurmountable.

"These times may be challenging for Las Vegas, but think for a moment about World War II," Eadington said. "During World War II Americans rationed gas and food, and it was patriotic to recycle metal for the war effort. Now President Bush says it's patriotic to travel, so Las Vegas can say 'It's patriotic. Come visit Las Vegas."

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