Not even Las Vegas is immune to the economic effects of the Coronavirus pandemic. In fact, Las Vegas will be one of the most affected cities in the country and possibly the world when it is all said and done. It’s been two months since Las Vegas was shut down and there is still no definitive end in sight.
Tourism Key to Las Vegas Success
In a typical year, Las Vegas can expect to see nearly 42 million tourists visit its city. Going from more than 3.5 million people per month to zero is a big loss. As a result, businesses throughout Las Vegas are looking at an uncertain future. More so than the businesses, employees also face uncertain futures.
Nevada relies on tourism more than any state in the country, mostly due to Las Vegas. In 2017, the hospitality industry accounted for about 18.4 percent on Southern Nevada’s gross domestic product, nearly one-fifth.
According to the Las Vegas Convention and Visitors Authority, tourism generates around $58 billion annually for Southern Nevada while supplying nearly 370,000 jobs. That represents nearly 40 percent of the employment in Clark County.
Tourism represented nearly 16 percent of Nevada’s total economic output in 2018. Hawaii was second at 10 percent.
Casinos Feeling the Effects
Within a month of the Las Vegas shut down, casinos were already feeling heavy pressure from the lack of money coming in. In early April, Caesars furloughed approximately 90 percent of its domestic workforce. Penn National Gaming Inc. announced that it was selling the Tropicana casino for $307.5 million. According to Bloomberg, that figure was more than $50 million less than what Penn National paid for the property five years ago.
Nevada set a new record with more than 92,000 unemployment claims the week after the state-mandated shutdown. The Economic Policy Institute predicts that unemployment will reach nearly 20 percent by summer, according to The New York Times.
Approximately 25 percent of Nevada’s labor pool works in leisure and hospitality.
Las Vegas Future
Not only is Las Vegas feeling the effects of Coronavirus this year, but the effects could bleed into next year as well. Steve Hill, CEO of the Las Vegas Convention and Visitors Authority, said that “we’re modeling between 50 and 70 percent of what we anticipated in a normal year next year in terms of room tax revenue”. He also noted that “We’re not going to just flip a switch and things are going to return to normal.”
Some casinos across the country are working on reopening as soon as this week. Las Vegas will not be one of those cities to do so. After their initial target date of Memorial Day as their reopening date, numerous resorts are pushing that date back now. Some are now targeting June 1st as their earliest scheduling date for reservations.
While a handful of casinos are currently accepting reservations prior to the June 1st date, there is no official date set as to when casinos will be able to open. Governor Steve Sisolak and the Nevada Gaming Control Board have yet to announce an official reopening date for casinos. Even when casinos get the green light to re-open, things will be very different.
Capacity could be limited to a certain number of guests at a specific time. While some dedicated gamblers will be making the journey to Las Vegas, tourism won’t be as prominent as it has been in the past, at least not right away. Some gamblers may prefer a less crowded Las Vegas but regardless, Sin City will not be the same as it was prior to the Coronavirus pandemic for some time.