Las Vegas in Deepest Economic RutTweet Share
A recent article in the New York Times has officials in Las Vegas regretting that what happens in Vegas doesn’t always stay in Vegas, as they try their best to put a positive spin on bleak report that portrays the city as being in the worst financial shape since the city was founded in the 1940’s.
Some of the key factors causing concern are:
As of August Nevada (which in reality means Las Vegas) led the nation in housing foreclosures for the 44th straight month.
Unemployment, which was under 4% a decade ago, is now at 14.4 percent and rising, and tops the list as the highest in the U.S.
The construction industry, once a high-powered engine driving Vegas’ mega-growth, has completely collapsed.
Following a growing trend, the Plaza Hotel and Casino has revealed its management is closing the hotel and sections of its casino, causing some 400 employees to lose their jobs.
David G. Schwartz, director of the Center for Gaming Research at the University of Nevada was quoted as saying, “It’s been in bad shape before, but not this bad. Sept. 11 set off a two-year slowdown, but nothing of this magnitude. If you look at the gaming revenues, they have declined and continue to decline over the past three years.”
Mayor Oscar B. Goodman, while remaining bullish on the future of Las Vegas said, “Our daily room rate average is not what it was. Our hotel room rates are bargains now. People aren’t spending on gambling as they have in the past. Ordinarily Las Vegas was the last to go into a recession and the first to come out. This one is different.”
Another so-called expert, Stephen P. A. Brown, the director of the Center for Business and Economic Research at the University of Nevada, showed how out of touch he was when he was quoted in the article as saying he was hopeful that online gambling would not draw people away from Las Vegas because “Internet gambling appeals more to addicted gamblers than people who are seeking a casino experience.”
Other clearer headed industry insiders freely fault unchecked growth and serial greed as the major cause of Vegas’ woes. They point to the $8.5 billion CityCenter, a monolithic urban center spreading out on 76 acres, offering 16 million square feet of floor space, built in a joint venture by the government of Dubai and MGM Resorts, which opened last December and added 5,000 new hotel rooms at a time when rooms at the Sahara were hard to fill at $38 bucks a night. Older properties fared even worse.
And still another hotel is due to open on the strip in mid-December. Named the Cosmopolitan, this hotel will add an additional 2,500 rooms, contributing further to the rampant room glut.
If that weren’t enough, one key indicator of the city’s economic decline is that gambling by Vegas residents, once the city’s bread and butter, has been consistently drying up as joblessness rises, people lose their homes and savings, and older citizens become increasingly unsettled about their upcoming retirement.
Mayor Goodman, who made his name as an attorney defending high-profile mobsters and who has seen all kinds of rollers come and go had this to say, “The big players, the ones who gamble the big money, I’m not sure they have it anymore.”