The Virus Has Hit Las Vegas Hard, and the Future Looks Dim
A year ago, the Mandalay Bay Convention Center in Las Vegas was humming with activity. In preparation for the annual Consumer Electronics Show, organizers and staff alike were working literally, around the clock.
In the past, the fact that the CES was in progress was unmistakable. Hotel rooms were hard to get, and the rate for those available skyrocketed. It was hard to get seated in a restaurant, and clubs and casinos were packed with people. In 2021, 170,000 people attended the show. It has been estimated that they left behind $169 million in direct spending. The estimated economic impact on ‘Vegas was over $290 million, according to the Las Vegas Convention and Visitors Authority.
This year, 2021, could not be different. The activity is gone, the work is gone, and so is the money. Like many events, the CES this year has gone all-digital. The move to an all-digital format was decided on as a way to place health and safety as the number one priority during the COVID-19 pandemic. This move only serves as a further blow to a city already put on its knees by the current health and economic situation.
Money in Las Vegas is Running Out
The job market in the United States metro markets has been hit hard. The hardest hit among the major metro areas in the country is Las Vegas. The area is heavily reliant on business conferences, exhibitions, travel, gaming, and large gatherings of all kind. Suddenly, this income stream has been throttled.
Shut-downs were responsible for driving the unemployment rate last April to 34 percent. Although that statistic has improved, the November unemployment rate was 11.5 percent. Unemployment in the metropolitan area of Las Vegas is the highest in the country, this according to the United States Bureau of Labor Statistics.
Those who were employed in the city are trying everything to get employment. Unfortunately, for most, no work is available. To those currently unemployed, no longer do they have health insurance and they continue to wait for state-sponsored unemployment benefits that have been in the works since August.
A Year Ago, Optimism was High
In January of last year, optimism was running high that the Consumer Electronics Show would prove prosperous for Las Vegas and its people. Steve Hill, CEO of the Convention and Visitors Authority noted that room tax revenue had set new records in seven of the previous 10 months. At the time, it appeared that the trend was set to continue.
New hotel and resort construction was well on its way. The city was scheduled to host the 2020 National Football League draft in April. It was planned to fill the new multi-billion-dollar Allegiant Stadium with fans who were all set to cheer on the Raiders, which had relocated from Oakland.
Furthermore, last year’s CES was slated to be the initial event in a mammoth expansion to the convention center featuring a futuristic people-mover from Elon Musk’s, The Boring Co. Instead, the 1.4 million-square-foot West Hall sits empty.
Hotel rooms during the last CES were pegged at more than $400 per room night. The same rooms are advertised this year at $25 to $45 per room night. The Mirage and the Wynn Encore have begun shuttering rooms during the week due to non-existent demand.
Travel Economy Losses Are in the Billions
The United States Travel Association estimates the COVID pandemic will result in cumulative losses approaching $500 billion. This loss is not only crippling for the industry, there will be an estimated $64 billion in lost tax revenue at the local, state, and federal levels.
For Las Vegas to see a return to a buoyant economy, people have to feel comfortable traveling and to remain indoors. Until vaccinations are widespread, chances of early recovery are remote.