Finally, Las Vegas looks poised to bust out of the Covid doldrums in a big way.
“We could be heading into the strongest summer in a long time,” says Brent Pirosch, director of Gaming Consulting with the Las Vegas office of real estate giant CBRE.
A number of critical factors are coming together, Pirosch told GGBNews:
- People are getting comfortable again about traveling and gathering in large numbers, thanks to the stepped-up pace of vaccinations nationwide.
- They have discretionary cash in the form of federal stimulus payments and tax refunds
- And with summer just around the corner, there’s something of a perfect storm brewing out there, of the good kind, for a change, that’s ready to spill over into go-to destinations like Vegas
“We’re in a situation where people and businesses are sitting on large reserves of cash,” Pirosch said. “And, as far as Las Vegas is concerned, there isn’t a lot of competition elsewhere right now from sporting events and other forms of entertainment like live concerts.”
CBRE’s research indicates that around 2 million doses of Covid vaccine are being administered daily, a rate that could see around 70 percent of the U.S. population inoculated by the end of July, the baseline for “herd immunity”, according to data from the Centers for Disease Control and Prevention.
The state of Nevada has responded by relaxing capacity limits on the resort industry to 80 percent, and is set to restore them to 100 percent by June 1.
And the timing couldn’t be better, Pirosch notes, because May, June and July are historically Las Vegas’ best tourist months.
“All the signs are encouraging,” he said.
Back to the ‘B’
March ended with the best statewide gaming revenue total in years, surpassing $1 billion for the first time since the pandemic hit last March. Significantly, it was also better than March 2019 by more than 4 percent.
The Las Vegas Strip generated half of it, $501.4 million, an increase of more than 67 percent over March 2020.
Downtown’s casinos set a new single-month record, winning nearly $71 million, a year-on-year jump of 63.4 percent that was driven in part by an influx of capital investment that’s now bearing𑁋headlined by the opening in October of the all-new Circa Resort & Casino𑁋and by a resurgent Las Vegas locals market, which comprises some 20 percent to 25 percent of the gaming volume in and around Fremont Street.
“And Downtown was doing well before all this,” as Pirosch said. “All the numbers point to Downtown having an excellent year.”
Other key metrics appear to be aligning heavenward as well.
Year to date through February, CBRE’s research shows mass-market win citywide up nearly 53 percent over pre-pandemic January-February 2020.
Arrivals from outside the U.S. remain soft—not surprisingly, given the uncertainties surrounding the pandemic globally—but within the country the lift has been robust. March’s total passenger volume at McCarran International Airport was up 60 percent over February and up 24 percent over March 2020. It was the first year-on-year increase since the pandemic began.
Visitation Still in Recovery
Visitation still has a ways to go. Citywide through March, it’s down 39.8 percent year-to-date compared to the first three months of 2020 and down 50.8 percent compared to the same period in 2019. But at 2.2 million arrivals, March delivered the best single-month total in more than a year and better than February’s by almost 45 percent.
“The comeback is here, now,” as Governor Steve Sisolak boldly declared on a visit to town last weekend.
What remains to complete the recovery is the return of the conventions and meetings trade to something approaching pre-Covid levels.
In a normal year, convention and trade show attendees comprise 15-16 percent of total visitation to Las Vegas. But they generate impacts that far exceed their numbers. They’re the foundation underpinning midweek hotel occupancy rates, which, in 2019, topped 86 percent. They spend more, too, around 24 percent more per trip than Las Vegas visitors as a whole, more than $1,000 per capita on average, according to Las Vegas Convention and Visitors Authority figures. In 2018, their direct contributions to the local economy surpassed $6.6 billion.
Not surprisingly, their absence throughout the pandemic, for the year through March their numbers amounted to exactly zero, has compounded the general devastation.
April, though, showed the first shoots of a recovery with the arrival of Las Vegas Market, a twice-yearly gathering of buyers and sellers in the home furnishings and décor industries that drew 10,000 attendees to Downtown’s World Market Center.
Next month will see the arrival of World of Concrete to the Las Vegas Convention Center, an event that drew more than 60,000 attendees in 2019. It will be the first major show hosted at the center’s newly expanded West Hall.
“The large conventions, those with 15,000 attendees and above, traditionally make up about 30 percent of the market,” said Pirosch. “So they’re really important. These are the shows that really move room rates. World of Concrete will be an excellent example of that ability. But the 500-and-under shows are a much larger percentage and don’t take as much time and effort to organize, and there’s a good chance of recovering those shows more quickly. The ramp-up of that business could be better than expected.”
Accordingly, the mood was optimistic as Las Vegas gaming and tourism leaders gathered one day last month to view the new Convention Center.
“We’re making great strides, and I think things will continue to improve,” said Steve Hill, the LVCVA’s president.
Stephanie Glanzer, chief sales officer and senior vice president of sales for MGM Resorts International, told the Las Vegas Review-Journal. “People are ready. Groups have been surprised by how popular face-to-face gatherings are.”
Mike Massari, chief sales officer for Caesars Entertainment, said the sector is picking up right where it left off in 2019. “We’ve booked more in the past 12 months than we’ve had” leading up to the closures, he said. “And that’s how you grow.”