Las Vegas Sun

November 26, 2015

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The economy:

Will rising gas prices pinch Las Vegas tourism?


Paul Sakuma / AP

High gas prices are posted at a Chevron gas station in San Francisco, Friday, March 4, 2011. Gasoline prices have shot up an average of 35 cents per gallon since an uprising in Libya began in mid-February, which could cause concerns about tourism from the California market.

KSNV: Gas prices

KSNV coverage of rising gasoline prices, March 4, 2011.

Click to enlarge photo

In this March 2, 2011, file photo, a gas station attendant raises gas prices on a sign at a station in the Hollywood section of Los Angeles. Gasoline prices have shot up by an average of 35 cents per gallon since an uprising in Libya began in mid-February. A gallon of regular unleaded gained another 4.4 cents overnight to a new national average of $3.471 per gallon, according to auto club AAA, Wright Express and the Oil Price Information Service.

As prices at the gas pump continue to spike, forcing Americans to empty their pockets to fill their tanks, a pricey vacation is often the first thing cut from the family budget.

Rising fuel costs have already crept their way into food prices and almost every other shipped good and might soon hit the Las Vegas tourism industry.

Automotive and travel club AAA estimated in its daily fuel report Friday that Americans are paying an average of $3.47 at the pump, up nearly 20 cents from a week ago. That number compares to $3.11 a month ago and $2.70 a year ago. The price increase is primarily due to the ongoing conflict in Libya.

But even as fuel prices near the $4 mark in major tourist feeder markets like Southern California, Las Vegas tourism and resort officials don’t seem to be worried — yet.

“I think it is too early to tell what impact fuel prices are going to have on tourism to Las Vegas, but we have our feelers out in all of our major drive-in markets,” said Kevin Bagger, senior director of marketing for the Las Vegas Convention and Visitors Authority.

Bagger said drive-in traffic accounts for about 60 percent of the total visitor traffic to Las Vegas. Although gas prices started to rise just after the New Year, drive-in traffic was still up slightly in January, Bagger said. February drive-in numbers are not available yet.

On Friday, California took the No. 1 spot for the state with the highest average fuel prices at $3.85, according to AAA. The state recorded higher prices than Hawaii and Alaska, which traditionally have the highest fuel costs. Nevada ranked No. 5 with an average cost of $3.57

In Southern California, gas prices have spiked more than 20 cents in most local areas over the past week, according to AAA’s weekly report.

The average price of gasoline in the Los Angeles-Long Beach area is $3.82 per gallon, which is about 22 cents more than last week, 45 cents higher than last month and 81 cents higher than last year, the report indicated. The Bakersfield area recorded the highest prices in Southern California at $3.82.

In previous years when fuel prices have increased, Strip resorts have offered incentives such as lower rooms rates and gas cards to draw visitors. Caesars Entertainment spokesman Gary Thompson said it’s a possibility that the company would offer similar deals, but they don’t see a need for them right now.

“Unless they go way up, like over $4 per gallon, we don’t anticipate it impacting our business,” Thompson said. “The reality is it is only going to cost an individual or group an extra few dollars to get here from Southern California.”

But AAA spokesman Michael Geeser isn’t as optimistic as the LVCVA and Caesars.

“That’s a certainly a bright outlook without knowing how high prices are going to go. The more realistic outlook is that prices in the near term are expected to go up,” Geeser said.

Geeser said motorists will see pump prices rise because the prices being set for fuel purchases in the coming months continue to go up, which causes gas stations to raise their current prices.

This past week marked the second largest weekly fuel price increase since 1990, Geeser said. The largest weekly increase was 48 cents in September 2005 after Hurricane Katrina.

“We are starting to see some records being set and being broken,” Geeser said. “We have a few months for prices to go up, so we could easily hit the $4 mark.”

Thompson said the last time fuel prices rose to about $4, Caesars saw a slight downtick in visitors. But it might have been exacerbated by the over all economic downturn, he said.

Dan Hippler, vice president of, said when fuel prices increased in 2008, the booking and ticketing website saw few changes in room rates from Las Vegas resorts. is a sister company of the Las Vegas Sun.

“My guess is there is some tipping point where the drive market would really shrink up and impact room rates because of the less demand,” he said.

Hippler said Memorial Day weekend will be the best indicator because it generally is a big weekend for drive markets

The spike in oil prices could also begin to impact air travel, tourism and resort officials said. Jet fuel prices have increased more than 50 percent in the last year, according to the Air Transport Association.

Geeser said when gas prices go up, people tend to start to cut back on certain luxuries, including travel, so Las Vegas could see air travel decline as well.

Thompson said Caesars plans to watch it closely.

“There is a concern that if oil prices stay as high as they are that it may impact airfares, particularly among start-up airlines that serve Las Vegas, because it has happened in the past,” Thompson said. senior travel editor Jeanenne Tornatore said the travel booking website has seen flight prices increase in several major cities for travel booked between March 1 and May 31.

Las Vegas ranked as the second most popular destination on with a fare increase of 15 percent compared to same period last year. Flights to Denver saw the biggest fare increase at 38 percent.

Tornatore suggested that those who are on a tight budget should expand their flight search to smaller regional airports, which often have cheaper fares, and to try to avoid excess fees like standby lists, seat upgrades and carry-on bags.

When booking a vacation, Tornatore said, try to book a flight and hotel package.

“This is where hotels and flights that need to fill seats are willing to offer deeply discounted rates to us when we bundle it as a package,” she said.

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