- This week, a Macquarie gaming analyst released a note saying that the Las Vegas economy won’t bounce back until 2023.
- The tourism-dependent city has lost hundreds of thousands of visitors this year through the cancelation of major shows, including the Global Gaming Industry (G2E).
- A Macquarie survey shows that visitors who come back to Las Vegas won’t spend as much as they did before the coronavirus pandemic began.
- MGM recently laid off 18,000 workers, with several other companies expected to follow suit soon.
A Macquarie Securities gaming analyst this week gave some frightening news regarding Southern Nevada. Las Vegas won’t be back to its pre-pandemic economic stability until 2023, he believes.
Chad Beynon released a note this week forecasting that the city could bounce back, but not until next year but one. Beynon stated that if a COVID-19 vaccine is discovered, then the Las Vegas market will recover quickly, but Macquarie’s bull case scenario suggests that the break-even year is 2023.
Director of the National Institute of Allergy and Infectious Diseases Antony Fauci recently told NBC that a vaccine was likely to be out before 2020 ends. That would be good news, especially for people who are on Wall Street since stocks fell steeply. For instance, the Dow Jones had its worst single-day since June when it lost 807 points.
Las Vegas Strip casinos won $6.8 billion in 2019. Of the 42.5 million guests that came to the area, 6.65 million were convention attendees.
No more conventions are happening in 2020. The city has lost hundreds of thousands of visitors due to the cancellation of the Global Gaming Industry (G2E) and other major shows like the Specialty Equipment Market Association, JCK, and National Association of Broadcasters.
The Nevada economy depends on tourism more than any other state. Aside from generating $19 billion to the GDP of Silver State in 2019, the industry supports 450,000 jobs.
However, these figures are likely to drop significantly, while Nevada’s unemployment rate is currently 15%, down from April’s 28.2%, it is still far higher than the national average of 10.2%.
Recently, MGM Resorts fired 18,000 previously furloughed workers nationwide. However, Nevada experienced the majority of job cuts. Several other casinos are saying goodbye to their employees since visitor volumes have remained low and hotel rooms empty.
Las Vegas-based Experience Strategy Associates CEO Greg Chase said that it’s impossible to have every employee at work when your business volume doesn’t support that.
Sadly, the likelihood of visitors spending less when they start returning to Las Vegas is high. A recent Macquarie survey suggested that 40% of future guests will use fewer dollars than they did on their trips before the coronavirus pandemic hit.
Also according to the poll, 65% of people wouldn’t visit Las Vegas until the vaccine is distributed widely.
McCarran International Airport, the city’s main airport, has experienced a sharp decline in the number of passengers.
Hopefully, the “Discover Your Nevada” campaign will help Nevada recover partially. The new crusade aims to encourage residents to explore their area.