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Las Vegas Rebounding from Economic Slump

“Vegas has emerged as a strong bet in an uncertain economic climate largely because more leisure travelers and convention goers are driving to Sin City rather than flying to places such as San Francisco and New York since the Sept. 11 attacks.

“Gaming and tourism statistics show that Vegas has almost fully recovered from the travel slowdown that paralyzed the country immediately after the terrorist attacks, and analysts note that the industry's high-rolling companies are spending with bullish confidence, seemingly oblivious to the worst bear market in decades.

“…Indeed, much of the gains reported by casino companies last week were attributed to higher hotel revenue; the Las Vegas Convention and Visitors Authority said weekend rates have returned to pre-Sept. 11 levels and the city is running at a consistent 93% hotel occupancy rate. Overall, average daily room rates were about $76 through August -- down about 5% from a year ago.

“…`Gaming revenues like this indicate rising consumer confidence and an improvement in discretionary spending,’ said David Givens, an associate economist with Economy.com. `It's believed to be an early indicator of economic growth.’

“…Still, shares of the top Vegas casino operators fell after earnings were reported last week. Analysts speculated that was because forecasts were either lower than expected or the companies didn't provide enough guidance for the future.

“Jason Ader, a gambling analyst with Bear Stearns Cos., said he anticipates another two or even three "tough quarters" for the high-end gaming industry as consumers resume their search for travel deals in what continues to be an unsettled economy.

“…City tourism officials say a full recovery isn't far away, due in large part to an increase in convention business that has already exceeded 2000 levels for the year. Nearly 4 million convention goers had traveled to Las Vegas through August, bringing in about $4.4 million for the city during their stays. That compares with 3.8 million for all of 2000, when convention spending totaled $4.2 million…”

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