Recent economic indicators may forecast an economic slowdown, but experts are optimistic Las Vegas will weather an economic downturn.
Tourism statistics in the 21st century haven’t been encouraging. Visitor volume to Las Vegas fell 3.9 percent in February from last year, and a combined 1.8 percent for the first two months of 2001.
The last time there was a monthly drop in visitor volume was August 1998.
At the same time, there was a 3.1 percent dip in hotel occupancy levels, and a 4.3 percent slide in the drive-in traffic from California.
The figures released by the Las Vegas Convention and Visitors Authority (LVCVA) came on the heels of a Gaming Control Board report that showed Las Vegas Strip casino revenues dropped 12.6 percent in February from a year ago, and 2.2 percent for the first two months of 2000.
Most analysts attribute the slumping numbers to a combination of a slowing economy, and competition from Indian gaming, especially in California.
"In the first quarter, we definitely saw a slowdown in business out of Southern California," said Jason Ader, an analyst at Bear Stearns, who added Indian gaming "is starting to have an effect" on certain areas of Nevada.
Another factor that is largely overlooked by financial analysts is the diminishing number of first time visitors to Las Vegas.
According to the LVCVA’s 2000 Visitor Profile released last week, only 21 percent of Las Vegas visitors indicated they were first-time visitors - a significant decline from all four of the previous years. (About 32 percent of Las Vegas visitors were first-time visitors five years ago.)
Marketing professionals say the steady decline in first-time visitors reflects a lack of the new and quirky resort hotels that fueled a sharp surge in tourism during the 1990s.
"There really hasn’t been anything new on the Strip in a couple of years, and it doesn’t look like there’s anything special on the horizon for the near future," said a public relations executive, who wanted his name withheld. "Las Vegas has also lost those curiosity-seekers who came here in droves because of the so-called ”˜family attractions.’
"Well, the city is no longer promoting family values and, unless it comes up with something innovative, those visitor statistics will likely remain flat."
While Las Vegas would like to attract a greater number of first time visitors, the city’s repeat customers have remained loyal.
According to the LVCVA visitor profile, repeat visits to Las Vegas were virtually the same last year as in 1998 and 1999.
Customer loyalty may play a factor in Las Vegas’ ability to weather a slowdown.
"With the downturn in the economy, many American families are seeking to vacation at home this summer, instead of traveling abroad," said James Shillinglaw, editor-in-chief of Travel Agent magazine. "While Las Vegas isn’t totally recession proof, it’s the type of resort town that won’t lose a lot simply because of a softening in the economy."
Shillinglaw added that Las Vegas could actually attract vacationers who would have traveled overseas.
"When it’s too costly to travel abroad, many Americans hop in the mini van and drive to their vacation destination," Shillinglaw said. "Las Vegas should snare a lot of those travelers."