SEARCH NEWS:

 

Effects of 91 Gulf War Short Lived

LAS VEGAS -- The economic impact of the 1991 Persian Gulf War on Las Vegas at first went largely unnoticed in reports published at the time.

However, when the conflict's negative effects began showing up a few months later in economic reports, it became clear Las Vegas had been hit hard almost as soon as the war started, even though the impact was almost as short-lived as the war itself.

Then-Gov. Bob Miller, now a partner in the Las Vegas law firm of Jones Vargas, expects the impact of the second U.S. war in Iraq will be similar to the first, provided it also is a brief conflict and barring any new domestic terrorist actions.

The 1991 war amounted to a relentless, 42-day campaign to achieve limited military objectives. Allied casualties were small with 148 deaths, and popular support at home was successfully sustained.

Now, our objectives are broader and the country is committed to the reconstruction of Iraq and other long-term goals in the Middle East.

The $60 billion price tag for the United States to transport and sustain a force of more than 500,000 military personnel 12 years ago was largely underwritten by Saudi Arabia, Japan and other wealthy allies.

The local business community's concerns then were focused on manpower needs, as reservists were called up to serve.

Jim Spoo, then-director of the state Commission on Economic Development, said as America prepared for war in late 1990, the potential impact on Nevada was unknown because the threat of a costly war had been remote for the previous 15 years, and little relevant historical data was available.

The war, however, went well and lasted only seven weeks.

When the war started on Jan. 16, 1991, the U.S. economy already was coming out of the relatively short and soft recession to which Las Vegas had proved immune, said Keith Schwer, director of the University of Nevada, Las Vegas' Center for Business and Economic Research.

Early in 1991, however, two of the nation's largest airline companies, UAL Corp. and Delta Air Lines, announced large first-quarter losses reflecting a sharp slide in air travel brought on by the war and the recession that began with the third quarter of 1990.

The slowdown in air travel was a major concern for L as Vegas gaming companies.

As time dragged on, it became clear that the war and economic downturn that lingered through the first quarter of 1991 had created economic challenges that the Las Vegas gaming industry would have to surmount.

Occupancy rates and gaming revenues in Las Vegas both declined about 10 percent during the hostilities, compared with rates for the previous January and February.

For all of 1991, the local economy showed mixed results, with housing permits falling 13 percent and hotel occupancy down 5 percent, while gaming revenues and the visitor counts were up 1.7 percent.

For the most part, though, the local effects of the war were fast disappearing by the spring of 1991 when U.S. forces started their withdrawal, Schwer said.

And by the time 12 months had passed, the Las Vegas economy and the local gaming industry seemed to have recovered and were expanding.

"It's amazing how resilient the economy and gaming proved to be," said Deutsche Bank analyst Andrew Zarnett.

< Gaming News