Escalating resort fees and the elimination of free parking at numerous Las Vegas Strip casinos are likely impeding visitor volume from Southern California to Sin City. That’s according to Dr. Stephen Miller, the director of the Center for Business and Economic Research at UNVL.
On Tuesday, Miller delivered his economic outlook for the next two years on Southern Nevada before the Las Vegas Global Economic Alliance at the M Resort. While he’s overall optimistic regarding the Las Vegas economy through 2021, he noted there’s been a decline in visitors driving from California.
The Las Vegas Convention and Visitors Authority (LVCVA) reports that visitor volume in 2019 through October is up 0.5 percent. Miller is forecasting a strong final two months, with his full-year visitor volume calling for an 0.8 percent uptick.
Las Vegas visitor volume would be performing even better if it weren’t for a decline in arrivals from California. Statistics from the LVCVA show that traffic on I-15 is down 1.1 percent at the California-Nevada border through 10 months. That equates to almost 500 fewer automobiles crossing the border daily.
Fed Up With Fees
Miller suspects the ever-increasing resort fees and parking charges are the culprits for causing Southern Californians to U-turn away from Las Vegas.
Resort fees are now as high as $45 per day at such luxury properties as The Venetian and Palazzo, Wynn and Encore, and Caesars Palace, Bellagio, and Aria. Free self-parking and valet can still be found at certain Strip properties, but visitors arriving in automobiles should expect to incur parking charges at MGM and Caesars resorts.
That has got to be the answer,” Miller declared, as reported by the Las Vegas Business Press, which is part of the Las Vegas Review-Journal.
“The question is whether that is parking fees and resort fees. That may play into it, but whether it’s big enough to keep the visitor volume soft, I don’t know,” he added.
Miller says Las Vegas is positioned well for the two years ahead. He believes the odds of a nationwide recession are long, which is, of course, positive news for the gambling mecca.
The UNLV economics expert is forecasting flat visitor volume: an increase of 0.3 percent in 2020, but 0.4 percent decline in 2021. As for gross gaming revenue (GGR), Miller’s calling for a 1.4 percent increase in 2020, and 1.2 percent gain in 2021.
Over the next half-decade, approximately 12,000 new hotel rooms are slated to come online. Resorts World Las Vegas and The Drew are expected to offer 3,500 and 3,719 rooms.
“The leisure and hospitality industry has been soft for a couple of years now, but the unknown factor that plays into this over the next five years is, supposedly, 12,000 rooms coming online,” Miller said. “There was a shortage of rooms and the question is, ‘Will those new rooms bring in visitors?’ That’s hard to forecast.”
The unemployment rate in Las Vegas-Paradise is at 4.0 percent, down from 4.7 percent in July. However, that’s still higher than the nationwide unemployment rate of 3.6 percent.