LV tourism not hurt yet by record gasoline prices

The nation is reeling from soaring gasoline prices, but they'll have to get higher before they start influencing decisions to visit Las Vegas.

How high prices must go before tourists decide to stay home is a hot topic among experts watching pump prices climb.

The American Automobile Association's announcement Tuesday that Nevada gasoline prices have gone up a record 30 cents in one month became part of the debate about whether the summer tourist season will be affected. The consensus: If prices continue to rise, it could put a dent in the number of visitors coming to Las Vegas, but right now, it's not enough to discourage travel.

"The problem is there's no quick substitute for gasoline," Paul Moreno, a spokesman for AAA in San Francisco, said. "If the price of going to the movies goes up, you rent videos or go to other events. If the price of orange juice skyrockets, you may buy some other kind of fruit juice.

"But there's no easy way to substitute for gasoline, so people will make the trip and cut out something else."

In Las Vegas, gasoline price hikes are worrisome to resort owners who don't want to see visitors cut their entertainment budgets. At current prices, visitation shouldn't be affected much.

"If you get 20 miles per gallon in your car and the price of gasoline goes up 50 cents a gallon, if you make a 1,000-mile trip, you're going to spend an extra $25," Moreno said. "Is that enough to stop you from considering taking a vacation to take the family to the theme park?"

AAA reported that Nevada's statewide average is now a record $1.78 a gallon for self-serve regular unleaded fuel. In Las Vegas, the average is $1.73 a gallon, up 26 cents from a month ago and up 15 cents from two weeks ago. Nationwide, the average price is $1.54.

A year ago, prices were $1.15 a gallon in Nevada, $1.11 in Las Vegas and 97 cents nationwide, according to the AAA survey.

In Southern California, Las Vegas' most important tourist market, the average price is $1.77 a gallon, up 34 cents from a month ago. In Los Angeles, it's up 28 cents to $1.65 and in San Diego, it's up 26 cents to $1.73. In Victorville, a favorite stopping point for travelers from Southern California, the price of gasoline is about $1.71 a gallon.

Kevin Bagger, senior research analyst for the Las Vegas Convention and Visitors Authority, said local tourism experts are watching gasoline prices closely to determine at what point they will affect visitation.

"If it's only 10 to 12 cents, it's not a big enough impact to change a tourist's decision to visit Las Vegas," Bagger said. "But we don't have a specific price point where it would affect us. We're looking at that like everybody else."

Bagger said gasoline price increases last year didn't affect the local market and visitor counts even went up in 1990 and 1991 when the Persian Gulf conflict affected gas prices. From 1990 to 1991, visitor levels were up 1.7 percent, even while the country was in a recession.

Bagger said the last time the city had a decline in tourists was between 1980 and 1982 during another energy crunch. From 1980 to 1981, visits fell 1 percent and from 1981 to 1982, visits were off 1.6 percent.

Jim Seagrave, a spokesman for the Stardust hotel-casino, said marketers are keeping a close eye on the price of fuel.

"Experience has told us that it can negatively affect our business," said Seagrave.

"We would look very seriously at reducing room rates or producing value packages to compensate for the higher cost of gasoline," Seagrave said. "This would help the airline traveler as well, because they are going to pay more for plane tickets with fuel price increases."

Kelly Matthews, vice president and chief economist for First Security Bank, said the gasoline crisis of the early 1980s was big enough to impact vacation plans and car-buying decisions.

Matthews said gasoline peaked at $1.45 a gallon in 1981. Using Consumer Price Index extrapolations since then, Matthews said that price would be like gasoline costing about $2.69 a gallon today.

"Clearly, an increase of 55 to 65 cents a gallon gets our attention," Matthews said. "But we're not ready to trade in our SUVs and big trucks at this point."

Matthews believes that the price of fuel would have to reach $2.75 to $3 a gallon before consumers begin taking drastic measures to curtail trips and buy more economical cars.

Part of the reason for that, he said, is that overall, the economy is in better condition now than it was in the early 1980s and consumer confidence has not been eroded by the latest gas price increase.

And while he doesn't believe gasoline has reached its peak price yet, he doesn't think it will go too much higher before prices stabilize and gradually fall, probably by the end of summer.

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