Vol. 4, No. 6, June 2008
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Feeling the pinch
Recession hits everyone hard
Record home foreclosures! Record gas prices! Increasing power bills! Record debt! Record bankruptcies! Record food prices!
These are the headlines we have become more accustomed to seeing in recent months. The dreaded “R” word, “recession,” has been whispered from economists and business leaders alike while hard-working Americans are feeling the pinch. The gaming and resort industries and its workers are no different.
It has been said that Las Vegas is recession-proof. I don’t think that is the case, but I do think the gaming industry does weather dramatic economic downturns much more easily than other industries. What makes this downturn hurt Nevada and our industry even more than in the past is that the resort industry and state depend less now on gaming revenue and more on dining, room occupancy and entertainment than ever before. People will still visit Las Vegas during harder times, but they will stay for shorter periods, spend less on dining and maybe go to one show rather than two.
Every resort company has seen reductions in revenue, and gaming revenues were down statewide four out of the last five months. Sales tax collection is dramatically lower than it was this time last year. The Las Vegas Convention and Visitors Authority reports that even though visitor numbers have only declined a little, what they spend while in town has dropped dramatically.
As an economy tightens, the first affected are those on the front lines. You are asked to reduce your hours, you receive fewer tips or, even worse, you find yourself or a friend out of a job. Reduced spending is not just a statistic, it’s something you feel.
It might get better sooner rather than later, but that doesn’t change the fact that we all are feeling the pinch today.
But I think it is important to keep in mind that as bad as it is, it could be far worse. Nevada has seen these cycles in the past. Many of you may remember how terrifying the months after 9/11 were. Casinos, beds and restaurants became empty overnight, and it took us nearly two years to look as if we recovered. It took time, but Nevada weathered the storm and Nevada will weather this storm, as well.
