Is Las Vegas a dying city? The latest metrics do not reflect a positive outcome for the immediate future of the Entertainment Capital of the World.
This is not to say it cannot comeback. This is not to say it is only Las Vegas dealing with these issues. I am simply pointing out what I can see in terms of tangible benchmarks.
Las Vegas, which took a massive hit during the pandemic in 2020 into 2021 and even the early portion of 2022, finally got back to pre-pandemic numbers near the end of last year. That did not last long.
However, this time it does not have anything to do with a highly-infectious, previously unknown disease. Las Vegas was eerily empty for the Super Bowl in February and casinos are starting to panic. And for good reason!
Harry Reid International Airport is the primary airport when you fly into Las Vegas. It released a report on March 27 that presented a concerning reality. International passenger traffic dropped 19.6% from January to February. Domestic traffic dropped by 6.9%.
Overall, only four million travelers flew through the airport in the month in February. That is a 7.5% decrease year over year.
A lack of tourists obviously does not bode well for the rest of the city. The Las Vegas Convention and Visitors Authority reported a 12% decrease in visitor volume for the month of February. Convention attendance dropped by approximately 20% and total hotel occupancy by 3.5%.
Not to get political, but I would imagine this crater has a direct tie to cost. Life is expensive these days. Las Vegas is even more so. Spending $30+ on a single drink at a club is not in the budget. Pumping hundreds (if not thousands) of dollars into a slot machine is a financial risk most people cannot afford.
Amanda Belarmino, an associate professor at UNLV, agrees with that hypothesis.
In the last 18 to 24 months, we’ve started to see some declines due to pressures from inflation, increased credit card debt, and issues with the price of gas.
— Amanda Belarmino, via NPR
She also explained to NPR that there are geopolitical factors involved with the decline as well.
We’ve seen a decline in international visitors ever since COVID, particularly from Asia, especially with changes in relationships with China. Southern California is Las Vegas’ largest domestic market, but we’ve seen some decrease in that because of the fires […]
Peace in both Ukraine and Israel would be very beneficial from a humanitarian standpoint, but also for our industry.
— Amanda Belarmino, via NPR
It will be interesting to see how the metrics from February compare to the metrics from March because Las Vegas saw a huge bump for March Madness. Hotel rooms were selling at normal (expensive) rates. Sportsbooks were popping. Pools were at capacity.
Was that a one-off occurrence or is Sin City at risk of collapse? It depends on who you ask. Only time will tell.