Gaming revenue in Clark County, which includes downtown Las Vegas and the Strip, is down 8.5% for the year, to $8.3 billion. But the revenue for October, the last month for which figures are available, is off an ominous 24.3% versus the same month in 2007. Visitor volume is down 3% over last year, though the city's convention business is holding steady.
The Strip's restaurants have seen a proportional decrease along with overall visitor traffic. David McIntyre, vice president of food and beverage at MGM Grand — which counts among its stable of high-end eateries such restaurants as Shibuya, Nobhill and a pair from French maestro Joel Robuchon — notes that visitors have become more careful with their dollars. “They're still going out to eat; they're just not spending as much money," McIntyre says. “They might not have that second glass of wine." (See 10 things to do in Las Vegas.)
The recession is hitting Las Vegas on all fronts. Nevada legislators have struggled to close a deficit of more than $1 billion in the 2009 budget. Budget projectsions for 2010 and 2011 also look grim. Construction on Boyd Gaming's $4.8 billion Echelon resort was stopped last August just as three of its towers reached the 12th floor (the tallest would have risen to 55 stories). Echelon won't resume until 2010, though its construction cranes will remain towering above the site (it's cheaper to leave them in place — and these days no one else in town needs them).
A mile or two down the Strip, MGM Mirage just sold off Treasure Island for $775 million to billionaire casino operator Phil Ruffin. The cash infusion should help the corporation finish construction on its $9.1 billion CityCenter, the largest private construction job in the U.S. Yet even in the best case scenario, Vegas — and the rest of the country — won't begin to drive out of the ditch until the end of next year, as consumer spending improves, new hiring resumes and the city's battered construction industry gets back on its feet. The worse case? The recession deepens, and the ditch turns into a cliff.
From any vantage point now, the situation is grim. Construction in the area dropped 92% this past October, compared with the same month a year earlier. In November the county issued 80 new home permits, down from an average of almost 500 permits a month in 2007. Housing prices have deflated with a deafening groan. Keith Schwer, who runs the Center for Business and Economic Research at the University of Nevada- Las Vegas, estimates 50% of homeowners owe more than what their home is worth. Perhaps the only positive is that housing prices have returned to more reasonable levels. “We're getting back into the affordability range," Schwer says. “The only problem is we don't have credit to buy them and we're losing jobs."
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