Tourists to Vegas in October: ‘no thanks’

By Liz Benston

Published Wednesday, Dec. 10, 2008 | 12:17 p.m.

Updated Wednesday, Dec. 10, 2008 | 5:12 p.m.

Hours after Nevada reported its worst monthly decline in gambling revenue since the state began compiling such info in 1983, the local tourism authority reported the second largest monthly drop in Las Vegas visitors.

The dismal October figures are the latest sign that business has worsened in Las Vegas and precede fourth quarter casino earnings reports expected to show more red ink.

On the Strip, gambling revenue – the amount gamblers lost – fell 26 percent in October from the same month a year ago, to $475 million. Though compared against a record 20 percent year-over-year gain in October 2007, the drop indicates just how far, and how fast, the gaming business has deteriorated.

The Las Vegas Convention and Visitors Authority reported a 10.2 percent decline in visitor volume in October, the worst drop since visitation fell 14.1 percent in September 2001 after the terrorist attacks.

This gaming decline might be a record for any market in the United States, which makes sense given that consumers are cutting back on big-ticket purchases.

In spite of efforts to lure tourists with cheap rooms and other freebies, at least half of Las Vegas visitors get here by plane, which is more expensive than going to a neighborhood casino that is closer to home. (Passenger traffic through McCarran International Airport is down 6 percent from January through October.)

The tourism figures closely track the slipping national economy.

After minor decreases early in the year, volume fell in the low single digits July through August, when gas prices soared and the credit crunch worsened. Volume fell 10 percent in September and October, when the market crashed and the Wall Street bailout hit.

Convention attendance is down 4 percent from January through October, while the number held is down 4 percent, the tourism authority says.

Hotel occupancy is down 4 percent through October and down 8.5 percent in October, the worst decline yet this year. Hotel rates fell 10 percent through October and plummeted 14 percent in October following double-digit declines since June.

By comparison, Atlantic City experienced its worst monthly decline in the No. 2 market's 30-year history in September, when gaming revenue fell 15 percent.

At the time, casino executives used the decline as ammunition to fight a complete smoking ban on casino floors.

Aside from a partial smoking ban in casinos, which executives say has motivated smokers to gamble in nearby tribal casinos that allow smoking, Atlantic City has been hurt by the opening of new casinos in Pennsylvania, a feeder market for the coastal gambling haven.

Las Vegas always had the advantage of being a unique, isolated destination. That's not enough these days to entice consumers who simply don't have the money to spend and others who see a trip to Vegas for what it is: a luxury.