Visitor volume was off 4.6% to 3.22 million, down approximately 155,000 from the same month in 2007. Hotel occupancy fell precipitously, dropping 470 basis points to 91.3% from 96%. The average daily room rate fell 10% to $105.97 from $117.76. Gaming revenue – the amount gambler lost in casinos, fell 15% to $819.68 million from $964.72 million in Clark County as a whole. Within that percentage is 21.81% drop in North Las Vegas, an 18.89% drop along the Boulder Strip and a 14.67% drop along the Las Vegas Strip.
Continuing on the down the data sheet, the total number of airplane passengers getting off in Las Vegas fell 8.6% to 3.92 million from 4.29 million. Within that number is a 13% drop in charter and international passenger traffic, which runs counter to the theory that international gamblers are offsetting the loss of domestic gamblers. Finally, auto traffic at the Nevada-California border on Interstate 15 fell 6.4% to 89,717 from 95,848.
In fact, the only numbers higher in July 2008 than July 2007 are the number of hotel rooms, the number of conventions and the number of conventioneers. Room inventory grew by 2.4%, to 136,990 rooms from 133,781 rooms. The number of conventions grew 8.9% to 1,316 from 1,208 in the same month last year but the number of people attending conventions didn't keep pace, growing by just 0.6%.
Brian Gordon, a principal with Applied Analysis, a locally based business research and advisory firm tells GlobeSt.com that while business is down in Las Vegas like it is across the country, the casino industry seems to be getting hit harder than the rest. "Wall Street has responded to a decrease in revenue by some gaming operators with significant downward pressure on stock price, but there's seems to be a bit of a disconnect" because while casino stock prices have fallen by double digits the revenue declines are in the mid-single digits," Gordon says.
The good news is that "while stock prices have been hammered fundamentals have only modestly softened," Gordon says. That could mean that gaming companies, which had a tough fourth quarter last year, may be positioned to improve on their fourth quarter numbers on a year-over-year basis.
The LVCVA is taking several steps to try to stem the tide, including cutting $28 million from its budget, which relies on hotel room taxes, and slowing down on its $890-million overhaul of the city's main convention center. LVCVA officials also are working with officials at McCarran International Airport to encourage airlines to increase seat capacity, which is off 13% percent from a year ago despite an increase in the number of hotel rooms that will peak in 2009 with the addition of some 16,000 new hotel rooms. It also continues to try to lure more international visitors through its 12 out-of-market offices and is encouraging travel agents to book Las Vegas by offering gifts such as debit cards and gas cards to top producers.
"We haven't seen these types of declines in this market for quite some time and the question is how long will it last," Gordon says. "We are not only down we are down from a high point, so that dip is much more painful today."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
