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Rod Smith

Concern Over Economy, Terrorism on the Rise

11 September 2003

Two years after the Sept. 11, 2001, attacks on the United States, concern is rising among Las Vegas visitors about both the threat of terrorism and the economy, an MRC Group Research Institute survey released Wednesday showed.

Further, while concerns about economic conditions far outrank the fear of terrorism, the new poll found visitors ranked Las Vegas fourth among U.S. cities likely to be a terrorist target.

The combination of terrorism concerns and falling consumer confidence bodes ill for leisure travel to Las Vegas, said MRC Chief Executive Officer Jim Medick.

Nearly one-third of the respondents in the survey ranked the national economy as their biggest personal concern, followed by 23 percent who ranked terrorism first. Another 18 percent ranked job security at the top, while 14 percent were most concerned about health care costs.

"If you combine the economy and job security, half of the visitors named the economy as their No. 1 concern," Medick said.

Nearly 40 percent of 296 respondents expressed doubts about the U.S. economy. Less than 25 percent indicated growing confidence.

Overall, the level of confidence in the economy among local visitors sampled has dropped by about one-third since a similar survey in June.

MRC Group, Nevada's largest market research and public polling firm, conducted the survey of Las Vegas visitors in the Canal Shoppes at The Venetian between Aug. 28 and Sept. 1.

"This finding may have a definite negative impact on U.S. travel as a whole as well as here in Las Vegas," Medick said. "It's the economy, stupid, with an unhealthy dose of terrorism thrown in, a real one-two punch for the Las Vegas economy. Overall, we can't expect a full (local) recovery in tourism with the economy being an albatross around our neck right now."

Nearly one-third of the visitors said they feared another domestic terrorist attack, compared with 24 percent who said they felt safe from terrorist attacks.

And, as with economic concerns, the fear of domestic terrorism has increased about 50 percent since the last survey in June.

Despite its second-place ranking in the poll, terrorism is in the forefront of peoples' minds. Some 23 percent of visitors polled said they considered the threat of a terrorist attack while planning their most recent Las Vegas trip.

Also, 36 percent said they would postpone travel here if the Department of Homeland Security announced a severe, or red, alert level.

Other experts suggested the poll's results may not reflect everything happening with the Las Vegas economy right now.

Deutsche Bank analyst Andrew Zarnett said current economic data suggest visitors continue coming to Las Vegas despite the concerns expressed in the survey.

"Las Vegas is experiencing stronger growth, especially in (revenue per available room) and occupancy than at any time in the past three years. Booking calendars look very strong. So people are coming despite the concerns," he said.

The other experts' explanations could help explain why visitors can list Las Vegas as the fourth most likely terrorism target while still continuing to come here.

"Las Vegas is viewed as a place I can escape to for a couple of days," said R&R Partners Chief Executive Officer Billy Vassiliadis, who called the poll a malaise or misery index.

"Travelers don't view travel to Las Vegas as a commitment like going to Disney. There is not the same level of trip anxiety," he said. "They can get out of their (anxiety) and decompress. In times like this, Vegas becomes a place people seek out because they can escape. That's a greater motivation than anything else."

Bill Thompson, a University of Nevada, Las Vegas professor and gaming industry expert, took it a step further, suggesting that visitors to Las Vegas tend to be gamblers and less risk averse than visitors to other destinations.

"Risk takers will say, 'The hell with it. We still gotta roll the dice.' That won't be true in Orlando," he said.

New York ranked highest in the surveyed group as a possible terrorist target, with Washington, D.C., second and Los Angeles third.

Still, Thompson said visitors' attitudes show Las Vegas is vulnerable to nationwide trends, but resistant to concerns that may hit competing destinations harder.

"Gambling accounts for only half of the visitor industry, but it's still the biggest single activity (for people coming here). It involves risk and there is a self-selection for people coming here. Still, we have to protect the image that this is the national mecca for gaming," he said.

The poll had a sampling error of plus-or-minus 5.7 percentage points at a 95 percent confidence level.