Dynamic Grandeur Undri Pune | A Space For You To Find Your Space
Nevada's Economy April 2012
1. A monthly report produced for Commerce Real Estate Solutions by Stephen P. A. Brown, PhD, Center for Business & Economic Research University of Nevada, Las Vegas
Issue 16 April 2012
To receive this newsletter by e-mail,
please subscribe at
www.comre.com/subscribe
The Changing Nature of
Las Vegas Tourism
The Southern Nevada economy is largely defined by tourism. A region’s economic base is made
up of the industries that produce the goods and services the region provides to the rest of the
world. According to data from the U.S. Bureau of Labor Statistics, the Clark County economic
base comprises leisure and hospitality and air and ground transportation services, the latter
undoubtedly the result of tourism.
With strong population growth, the construction and and hospitality employment with overall California
real estate industry also stood out as an important aspect employment.
of the Southern Nevada economy until about 2007. The relative stability of the leisure and hospitality
Despite its strong contributions, however, construction industry is not surprising. Whatever sectors are
and real estate cannot be considered part of a region’s doing well in the U.S. economy generate the income
economic base. Its output is not exported to the rest necessary to support tourism, gaming and hospitality.
of the world. What drives construction and real estate As one of the premiere tourist destinations in the world,
is the region’s growth—which is mostly dependent on Las Vegas can always share in others’ fortunes.
the strength of the industries in its economic base.
Las Vegas Visitor Volume Rising
Tourism and Gaming
As of March, Clark County saw 23 consecutive
From 1990 through 2007, the growth of Clark County months of increased tourism. In 2011, Clark County
gross gaming revenue outpaced U.S. economic activity. visitor volume was 3.6 percent higher than in 2010. For
Clark County gaming revenue dropped more sharply the first three months of 2012, Clark County visitor
during the U.S. recession than overall U.S. economic volume averaged 3.2 percent higher than the same
activity, as was the case in previous recessions. Given time period in 2011. For Clark County visitor volume
the depth of the U.S. recession, it’s not surprising that to reach the high water mark of 43,915,649 set in 2007,
gaming revenue has been a little slow to rise. we need to see a 4.2 percent increase over 2011. That
Employment in Las Vegas leisure and hospitality probably will not happen in 2012.
outpaced overall U.S. employment from 1990 through
2007. Since then, employment in Las Vegas leisure This report is commissioned by
and hospitality has basically held its own with overall Commerce Real Estate Solutions
info@comre.com • 801-322-2000
national employment. So employment in the industry
has been more stable than gaming revenue. We see
a similar picture when comparing Las Vegas leisure
2. nevada’s Economy April 2012
The visitor picture is stronger for Las Vegas. Las Vegas Staying Longer; Paying Higher Room Rates
visitor volume is approaching the levels seen in 2007 During 2011, the average visitor to Las Vegas stayed
before the U.S. recession. In 2011, Las Vegas visitor longer than in 2010. Room nights occupied rose by 5.3
volume was 4.3 percent higher than in 2010. For the percent. That figure exceeds the gain in visitor volume
first three months of 2012, Las Vegas visitor volume by 1.0 percentage points. During the first three months
averaged 3.6 percent higher than for the same period of 2012, however, visitor volume was 3.6 percent higher
in 2011. For Las Vegas visitor volume to reach the high than during the same period in 2011, but room nights
water mark of 39,196,761 set in 2007, we need to see were only 3.0 percent higher. Room nights occupied
only a 0.7 percent increase over 2011. That is quite were 5.4 percent higher during the first three months
likely to happen in 2012. of 2012 than during the same period in 2007 before
Las Vegas tourism is changing as it recovers. Visitors the recession.
are coming from farther away, staying longer and Visitors are also paying higher room rates than they did
paying higher hotel rates than in recent years. Visitors in 2010. During 2011, room rates were 10.7 percent
also seem to be gambling less and purchasing less from higher than during the same period in 2010. During
the retail shops in the casinos. the first three months of 2012, room rates were 3.6
Visitor Composition Has Changed percent higher than during the same period in 2011.
Visitors came from farther away in 2011 than in Despite the gains, room rates during the first three
previous years. A higher percentage of Las Vegas months of 2012 were 16.8 percent below the rates seen
visitors are arriving by air. Passenger volume at Las in the first three months of 2007.
Vegas’ McCarran airport, including those passing Gambling Less
through, was 4.4 percent higher in 2011 than in 2010. During the recovery, gaming revenue has risen by less
During the first three months of 2012, passenger than visitor volume, but that is changing. During 2011,
volume was 3.0 percent higher than in the first three Clark County gross gaming revenue was 3.5 percent
months of 2011. higher in 2010—0.1 percentage points less than the
The slow economic recovery in the West has been gain in Clark County visitor volume. During the first
evident in the changing composition of visitors. The three months of 2012, Clark County gross gaming
number of visitors arriving by automobile declined by revenue was 4.4 percent higher than in the first three
0.5 percent in 2011. The number of people arriving months of 2012, while visitor volume was only 2.1
at the California-Nevada border was up by only 0.3 percent higher. Despite the recent gains, Clark County
percent.
In early 2012, however, we saw resurgence in
automobile traffic, despite higher gasoline prices. The
number of visitors arriving by automobile during the
first three months of the year was 0.5 percent higher
than for the same period in 2011. The number arriving
at the California-Nevada border was up by 7.5 percent.
One consequence of more visitors arriving by air is
increased taxicab ridership. During 2011, Las Vegas
taxi ridership was 7.3 percent higher than in 2010 and
1.6 percent higher than in 2007. During the first three
months of 2012, taxicab ridership was 3.9 percent
higher than in the same period in 2011.
Commerce Real Estate Solutions | comre.com
6. This information is provided compliments of
Michael M. Lawson
President and CEO of Commerce Real Estate Solutions
Commerce Real Estate Solutions
Mike Hillis, SIOR, CCIM 3980 Howard Hughes Parkway, Suite 100
Las Vegas, NV 89169
Managing Partner of Commerce Real Estate Solutions, Las Vegas
Tel (702) 796-7900 • Fax (702) 796-7920
www.comre.com
To receive this newsletter by e-mail, please subscribe
at www.comre.com/subscribe This report has been prepared solely for
information purposes. It does not purport
Commerce is a regional real estate firm with international ties, to be a complete description of the
dedicated first and foremost to our clients. With the industry’s markets or developments contained in
premier professionals, and industry leading technology, our mission this material.
is to exceed our clients’ expectations through service excellence.
The information contained in this report,
For further information on the Nevada commercial real estate while not guaranteed, has been secured
market, visit www.comre.com or call 702-796-7900. from sources we believe to be reliable.