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August 4, 2015

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looking ahead:

Confidence is the key sentiment in gaming and tourism industries

Image

Leila Navidi

Shane Williams and Judith Lanuza, both of Las Vegas, share a kiss during TributePalooza at the Fremont Street Experience in downtown Las Vegas on New Year’s Eve Saturday, Dec. 31, 2011.

Our state depends on the revenue generated by casinos. Casinos depend on tourists wanting to gamble, dine, shop and be entertained.

So what is in store for 2012?

The mood is upbeat. Here are the details:

Randall Walker, director of the Clark County Aviation Department

When we add everything up for 2011, we’ll have about 4 1/2 percent growth year over year in the number of passengers at McCarran International Airport. I think 2012 is going to be another growth year, but it’s going to be less than that.

It’s hard to project out too far, but the capacity the airlines are loading into their schedules shows that the first three months will be pretty good, the next three months will by OK and after that it gets a little squishy.

Randall Walker, Clark County's retired aviation director, is shown July 7, 2009, at McCarran International Airport.

Randall Walker, Clark County's retired aviation director, is shown July 7, 2009, at McCarran International Airport.

As far as the airlines are concerned, I don’t know. Fuel is the 800-pound gorilla in the room. It goes up, it goes down and they have a hard time budgeting for that volatility in their model.

We want lots of seats coming into the market, but we also need healthy carriers so it’s important for these guys to be disciplined in offering capacity.

Our new Terminal 3 will be a great addition to the airport. It will help us spread the traffic out over the airport which helps us reduce the choke points we have here. T3 is going to help us continue to grow the international side.

We’re still on track to demolish Terminal 2. To use it now on any kind of basis, we’d have to put a lot of investment into it. It’s not our best face, you know, and that’s the first thing international arrivals see when they get here. When people come to Las Vegas, they expect a little pizazz when they get here.

­— Richard N. Velotta

• • •

Las Vegas Convention and Visitors Authority President and CEO Rossi Ralenkotter.

Las Vegas Convention and Visitors Authority President and CEO Rossi Ralenkotter.

Rossi Ralenkotter, president and CEO of the Las Vegas Convention and Visitors Authority

The good news for us is that in 2011, we had more than 39 million visitors and we’ve only done that once before in 2007. That tells me that the brand of Las Vegas continues to be strong and create excitement, both on the leisure side and on the meetings side.

I think the trends of the last 20 months are going to continue in 2012 with increases in visitor counts as well as room rates, which means increased room tax revenue. I’m forecasting growth of 2 to 4 percent, which would put us over 39 million visitors again.

It’s strong because I think people are finally getting over recession fatigue in a variety of ways, one of those being travel. There’s always something going on. We have more happening here in a week than most places have in six months.

We’re seeing a lot more international visitation, which is great for us.

With the attention Brand USA is getting, we expect that to remain in the public limelight.

We’re looking forward to celebrating Muhammad Ali’s birthday in February and we still have a partnership with Sports Illustrated to bring their swimsuit models here.

There are other things going on in the destination, like Project Linq on the Strip and the Mob Museum downtown.

­— Richard N. Velotta

• • •

Richard Bronson

Richard Bronson

Richard “Skip” Bronson, chairman of U.S. Digital Gaming and a former director of Mirage Resorts

The need for new and inventive revenue isn’t going away, nor is online gaming as a natural source of revenue. The Brookings Institution reports a projected nationwide deficit in state budgets of over $400 billion in 2012, which means more slashing, more tax hikes and more searchlights for alternative forms of revenue. Once again, states will be looking for the types of revenue that online gaming can bring — immediate, significant and safely regulated.

The number of states pursuing online gaming will double in 2012. Expect the number of legislatures with active bills to be 10 or more. I’ll boldly predict that at least two or three will adopt it.

As this industry ramps up, expect the American companies to be the pioneers that settle the frontier. Most of the offshore interests don’t have the familiarity with U.S. government relations and licensing, and there has been a dark cloud over many of the names and players, who have a checkered history. It is a Tupperware-tight industry that will require the highest levels of compliance and conformity. There remains an opportunity for some of the clean European operators to enter the American market but they will be few and they’ll need a star-spangled partner.

Delen Goldberg

Colliers Co-founder and Managing Partner Mike Mixer

Colliers Co-founder and Managing Partner Mike Mixer

Mike Mixer, executive with the commercial brokerage company Colliers International

For me, the biggest standout statistic we saw in 2011 — and one that will continue into 2012 — is visitor volume. We were on pace in 2011 to get close to our record high of 39 million visitors, which we set in 2007.

It shows that we’re a solid attraction, that the demand of Las Vegas is still there. The counter to that is our visitors are not spending as much money as they were in 2007.

But if we’re all in agreement that the economy is improving, in 2012 that should translate into a bigger spend per person who’s coming. And if they’re coming at record levels, then that money will result in a bigger bottom line for all the players in the hospitality arena.

The result of a higher visitor volume means we have higher occupancy. We’re at about 85 percent occupancy, and as that percentage stays higher, our room rates are going to start to edge up. That’s a big plus for the companies that operate in this market. As those room rates start to increase, I think demand will be slightly affected, but it’s a good balance. It gives operators an opportunity to raise their room rates at a reasonable rate.

The entire hospitality industry is improving nationwide. There is demand growth, and that is in part due to there being minimal product built. We don’t expect to see much new inventory in hotel rooms. That means that the average daily rates will start to improve as occupancy continues to improve.

I think we’ll also start to see renovation budgets get expanded. So we might not start to see new development, but renovation of existing development to bring it up to standards needed to stay competitive. We might see more and more dollars being spent on updating, which helps our local economy in terms of construction jobs.

Ric Anderson

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