By Mike Mixer, Colliers International – Las Vegas
At the beginning of 2020, Las Vegas was anything but ugly. Nevada’s economy was one of the fastest growing in the country. Unemployment was the lowest ever at 3.6 percent, while casinos reported three straight months of $1 billion in winnings. Then COVID came along and things got real ugly, real quick. The entire Las Vegas Strip was shut down, closed…on less than a day’s notice.
The Las Vegas unemployment rate hit a staggering 34.2 percent. One out of three people in Las Vegas became unemployed in April 2020. Meanwhile, the last time the Strip was shut down was after the JFK assassination in 1963.
Mike Mixer
The bad doesn’t look so bad compared to the ugly. As the year comes to a close, the Las Vegas Strip has reopened, but with fewer visitors. Low visitor demand hits hard in a city with more than 150,000 rooms. Las Vegas hotel occupancy has dropped from 90 percent down to 44 percent. Room rates have seen a milder drop this year, down only 6.77 percent (from $133 a night to $124 a night).
The Las Vegas Gaming Market was also unlucky, especially without a robust convention business to keep hotel rooms full. Strip gaming revenue is down 44 percent year to date and visitor volume is down more than 54 percent. The suburban gaming market is performing better than the Strip. The locals market is down only 27 percent year to date.
The beautiful $1.9 billion Raider (Allegiant) Stadium opened on time and under budget, only to be deprived of fans for its inaugural season. Also deprived of attendance this year was more than 12 million square feet of exhibit and meeting space, down more than 79 percent in 2020. Las Vegas is the country’s No. 1 trade show destination — and it intends to stay that way with more than 3 million additional square feet coming soon.
Despite all this, the good looks pretty good in Las Vegas. Founded in 1903, our city’s ability to adapt and evolve has been the norm for the past century. We thrive in the uber-competitive world of entertainment and tourism and the next evolution of Las Vegas looks very good.
Las Vegas has several multi-billion dollar projects under construction that will be must-sees for any visitor. The $4.3 billion Resorts World will open in the summer and the $1.6 billion MSG Sphere project, a first-of-its-kind entertainment venue, is set to open in 2023. Projects like these solidify Las Vegas as the global leader for travel, entertainment and tourism.
The Boring Company, Elon Musk’s tunnel-burrowing subsidiary, was also recently approved to build a valley-wide underground transit system. The Vegas Loop will be a game changer for visitors who seek quick access to world-class attractions and resorts throughout Las Vegas in a fun and convenient way.
Nevada’s economy is making significant gains nine months into the COVID-19 pandemic. The state’s jobless rate saw a meteoric drop to 10.1 percent in November, and is expected to fall further as vaccine-related optimism puts more heads in beds.
A healthy Las Vegas Strip means a healthy real estate market.