Fitch Ratings is predicting in a report that the Las Vegas Strip will not fully recover from losses brought on by thee Covid-19 pandemic until 2024 and that total revenue could still be down by 50 percent next year.
Analysts Alex Bumazhny, Colin Mansfield, and Connor Parks predicted the Strip’s overall gaming revenues will be down 60 percent in 2020, 50 percent in 2021, and 20 percent in 2022 when compared to the more than $6.58 billion recorded in both 2018 and 2019, according to an analysis by CDC Gaming Reports.
“A full recovery to pre-pandemic levels is not expected until 2024,” Fitch analysts wrote. “The Las Vegas Strip will experience the slowest recovery relative to other major gaming markets and segments globally.”
The Strip also relies heavily on revenue from non-gaming sources such as hotel rooms, dining, entertainment, retail, and other attractions, the report said. Those revenues are especially influenced by conventions and air travel.
Airline volume into Las Vegas is down 56 percent through August and there have been no conventions on the strip the last five months, with most major trade shows canceled or delayed.
“Recent easing of group restrictions is a positive,” Fitch analysts wrote. “But we don’t envision a material improvement in air capacity or consumer comfortability with flying until a widespread (COVID-19) health solution is present (e.g. vaccine, antiviral drugs), consistent with Fitch’s global airline group’s expectations.”
Northern Nevada, however, is way ahead of Southern Nevada in returning to pre-Covid-19 days. Carson City is just 700 employees shy of those levels.
In September Nevada added 3,400 jobs, but the Las Vegas area lost 129,700 jobs since September 2019, based on figures from the Department of Employment, Training and Rehabilitation.
“September saw Nevada adding back jobs for the fifth month in a row,” said David Schmidt, chief economist for the agency. “Despite this good news, the Las Vegas area remains at unemployment levels above what has ever previously been seen.”
Almost 15 percent the Las Vegas area’s workforce was unemployed in September, mostly in the leisure and hospitality trades. Several casino operators warned of more layoffs resulting from the coronavirus pandemic, according to the Las Vegas Review-Journal. Still, Nevada’s unemployment rate reached 33 percent in April just after the resorts closed down to stop the spread.
The September hiring gains in Nevada were driven by service-providing industries, but leisure and hospitality continued to lose jobs. Nevada’s seasonally adjusted unemployment rate dropped to 12.6 percent in September, down from 13.3 percent in August, but still up from 3.7 percent from a year ago. September marked the fifth straight month with jobs added, but the pace has slowed.
