Las Vegas has been on an extended roll and is coming off its best year ever.
Now the hot destination, known for resistance to economic dips, is having a worse winter than last year. Resort execs and tourism officials are on alert.
Casino/hotel giant MGM Mirage — with 10 properties in Vegas — has caused alarm by laying off about 150 employees, mainly housekeepers and bell staff. Harrah's Entertainment and Station Casinos also confirmed they've laid off staff, the Las Vegas Review-Journal reported this week.
"Fewer people are coming and they're staying for shorter periods of time," says Alan Feldman, MGM Mirage senior vice president of public affairs. "February can historically be a slight downturn, but it's more pronounced — '08 is looking like it's going to be a rough year."
Last year, Las Vegas set records, with 39.2 million visitors and $10.9 billion in gaming revenue, the Las Vegas Convention and Visitors Authority reports. It says 2007 hotel occupancy averaged a stellar 90.4% — tied with 1996, when there were far fewer hotel rooms citywide.
January and February hotel occupancy isn't reported yet, but the Visitors Authority already plans "aggressive, short-term incentives" in tandem with hotels, airlines and booking websites to lure visitors, says marketing senior vice president Terry Jicinsky. What's happening in Vegas is "reflective of the national financial landscape," he says.
The downturn comes amid $40 billion in new projects, including Palms Place, a condo/hotel tower adjacent to the popular 707-room Palms Casino Resort. The 599-unit tower is due to check in hotel guests in early March.
"We're hiring" — not laying off, says Palms owner George Maloof. Unlike big resort companies, "we don't have 5,000 rooms and we're less challenged" by slowdowns.
The month has brought windfalls. Bette Midler, who opened Wednesday night at Caesars Palace and is due to do 200 shows over two years, sold out her first run.
Anthony Curtis, president of lasvegasadvisor.com, sees "a jitteryness" due to a slowing tourism growth rate. "I don't think it's doom and gloom." Since the Strip has gone upscale — rooms can cost $300 and up — Vegas is "more dependent on (visitors) with discretionary income and more susceptible to economic downturns."
PricewaterhouseCoopers hospitality/gaming analyst Michael French says Vegas has historically "defied the odds," with more supply increasing demand.
The NCAA "March Madness" period, when men swarm in to bond and bet on college basketball, "will be a time to measure how things really are" in Vegas, Maloof says.
The question, says Feldman, is "how long this (downturn) will last and how deep will it go?"