How's the Las Vegas Economy Doing?

For a while, everybody thought Las Vegas was immune to the current downturn in the U.S. economy.

According to an article in the International Herald Tribune:

"In October [2007] alone, gambling revenues on the Las Vegas Strip were up 19.8 percent over the comparable month last year. By contrast, casinos elsewhere are not proving so resilient. ...In a number of places, revenues are actually down, sometimes by 5 percent or more." - Las Vegas Proves Immune to Jittery U.S. Economy, but not Casinos Elsewhere

Well, by February, 2008, the Las Vegas Review-Journal was reporting:

"The recession will likely manifest itself in the low-end consumer, first hitting locals casinos and weekend travelers from California. But the high-end market will not be immune either because of the stock market's continued volatility." - NEVADA ECONOMY: The R Word

Dan D'Arrigo, chief financial officer for MGM Mirage says the casino operator was seeing weakness in low-end 'value' properties and the meeting business.

"The consumer is stressed a little bit." That is showing up in weaker business at properties like MGM's Circus Circus and Excalibur on the Las Vegas Strip." - MGM Sees Consumer Stressed

More and more other businesses have been reporting reduced earnings. And some note the layoffs across the valley as proof that a recession has hit Las Vegas. Others say the layoffs are seasonal, normal.

The Las Vegas Sun says:

"Flash back to 1991, when the nation faced a credit crunch, a housing crisis and a war in the Middle East. (Sound familiar?) Gaming revenues suffered their steepest-ever one-month drop — a scare that led casinos to lower room rates to drum up business. New casinos such as the Hard Rock struggled with financing, and three other casinos filed for bankruptcy. Goodwill begged for donations to stay afloat, the unemployment rate rose, the governor laid off state workers and housing construction stalled." - How Vegas Could Weather a Recession

Fortunately, Vegas weathered this period better than most other places. And there's no reason to believe we can't do it again.

If you're thinking of moving to Las Vegas, and/or starting a new business here, do your homework first. Know what to expect. And have a plan B and plan C.

You should be okay.

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UPDATE: March 9, 2008 -- Las Vegas Sun reports:

"The first annual drop in gaming revenue since 2001 was reported Friday by the Nevada Gaming Control Board. The data shows gaming revenue down 1.3 percent from last year in Las Vegas with a statewide drop of 5 percent and a 9.4 percent decline for northern Nevada." -- New Data Show Las Vegas Gambling Revenue Down