Friday, Feb. 11, 2011 | 3:13 p.m.
The worst of the economic slowdown is behind Las Vegas and 2011 will mark the beginning of a recovery, according to one analyst and the head of the city’s tourism and convention industry.
Rossi Ralenkotter, the president and chief executive officer of the Las Vegas Convention and Visitors Bureau, said today he expects 1 million more visitors in 2011 than 2010, when the region had 37.3 million. That continues a trend of increased visitor volume in 15 of the last 16 months, he said.
“Granted, people aren’t spending as much, but we have turned this around substantially,” Ralenkotter said. “It’s a testament to the brand of Las Vegas.”
Ralenkotter made his comments at the Thomas & Mack Center during the 2011 Preview Las Vegas sponsored by the Las Vegas Chamber of Commerce, an annual forecast event. While there hasn’t been much to cheer about during the last couple of previews, speakers were looking for any positives they could find.
“The main message last year was that we survived 2009, but that’s over,” Ralenkotter said.
One of the annual forecasters, Jeremy Aguero, a principal at Applied Analysis, sounded a more optimistic tone this year.
“It will become clear by the end of 2011 that the worst of the economic downturn is behind Southern Nevada,” Aguero said.
He said he agreed that visitor volume would increase because of the improvement in the nation’s economy, and Las Vegas would also benefit from increased convention business and international travel.
In 2011, Aguero said the average daily room rate would increase by 5 percent and gaming win would increase by more than 2 percent.
He said he expected major casinos would be profitable for the first time in three years and stock values would rise 10 percent.
Employment numbers will likely be stable because any increase in jobs would be offset by losses in the construction industry, he said. Wages and the number of hours worked will increase, but the jobless rate will remain above 13 percent, he said.
“We aren’t going to fall below 10 percent until 2016,” Aguero said.
Aguero said he expects home prices to remain stable in 2011 but commercial property values will continue to decline. Commercial construction will remain at a standstill, he added.
Ralenkotter pointed to efforts the Convention and Visitors Authority has taken to help the region diversify its economy, such as allowing the Nevada Development Authority to set up a booth at conventions to encourage business relocations. It will do a trade show with the NDA in San Francisco to help both organizations achieve their goals, he said.
But Ralenkotter said it’s important to protect the resort and tourism industry because of the jobs it creates – 27 percent of the local workforce – and its benefit to the economy.
Ralenkotter said room taxes that fund the Convention and Visitors Authority aren’t a burden on residents, but are paid for by visitors, and the formula for using the proceeds works. Two years ago, the Nevada Legislature used room tax money to fund improvements to I-15.
Las Vegas must continue to target tourism and conventions as a key driver of the economy, he said. For every 1,000 visitors who come to Las Vegas, nine jobs are created or sustained, he said.
Ralenkotter said Las Vegas must continue to market itself to attract visitors, especially those who haven’t visited Southern Nevada but are interested in doing so.
That group is part of the group's latest marketing campaign.
“We think people know everything there is about Las Vegas, but there’s a group of those people who have an idea about it and think they know it, but need to be given some incentive,” Ralenkotter said.
There are 43 to 44 million of these potential visitors who need a reason to come to Las Vegas rather than go on a cruise or to Hawaii, Ralenkotter said. They need to be told about special events or new entertainment or what restaurants have opened, he said.
“We only need to get a 5 percent market share increase to boost our occupancy,” Ralenkotter said. “That’s doable.”
Another important segment to target is foreign visitors, who while making up 14 percent of those who come to Las Vegas, spend 22 percent of the money.