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Las Vegas has always been a love-it-or-hate-it kind of place, but never has it felt this unloved.
This ball of artificial light in the Mojave Desert long defied nature and the business cycle by offering Americans quick thrills – and the irresistible promise of well-lubricated or libidinous indiscretion staying secret here.
Not this time. After a dizzying decade-long megaboom that saw the city’s economy double in size, hangover in Vegas has come to mean much more than a movie title. It’s an unending reality.
Nevada has the highest unemployment and foreclosure rates in the country. Thanks to the newly parsimonious American consumer, Vegas has a glut of underused luxury hotel rooms and half-built real estate on The Strip.
The bust has left Las Vegans shell-shocked.
“This is a flashy town and it brings out the worst in everybody,” Mike Olson says of his construction industry friends who bought multimillion-dollar homes, planes and yachts during the good times. “Those toys are all gone. Everybody’s lives have been changed dramatically.”
As chairman of the Nevada Contractors Association, Mr. Olson hoped his industry would be seeing proof of a recovery by now. Instead, like so many in this city built on big spending, he’s wondering how long penny-pinching and value shopping will remain the new normal.
After doubling in the five years to 2006, the median price of a home is down by almost two-thirds. The unemployment rate is nearly 15 per cent. Greater Las Vegas, with a population just shy of two million, has lost more than 100,000 jobs since the crash.
Few of them will be coming back until Americans start spending again. Bargain prices have led to a modest increase in the number of tourists in Vegas. But high-flyers they’re not. In the first eight months of this year, gaming revenues barely budged, after plunging almost 20 per cent in 2009.
An influx of wealthy Asians – hooked on high-stakes baccarat – has helped some upper-end hotels keep the lights on. They pushed statewide gaming revenues 11.5 per cent higher in August. Still, the increase was based on a dismal 2009 figure and no one knows if it will last.
“If you wanted to stabilize the economy here, the main thing you need to do is to get personal income growing throughout the United States,” explains Stephen Brown, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas.
For now, this has become a bargain vacation spot – hardly the image the Las Vegas Convention and Visitors Authority envisioned when it adopted its infectious “What happens here, stays here” slogan in 2003. The tagline was part of a successful rebranding of Las Vegas into a high-end destination, with first class hotels, casinos, restaurants, live shows and nightclubs. It started out nicely. But the average hotel room, which went for $142 two years ago, fetched a mere $87 in August.
Steve and Mary Matthews came for the deals. The Wisconsin couple in their 20s paid $374 (U.S.) for their Vegas vacation package, which included a return flight from Milwaukee and four nights at The Flamingo.
“And we came with $500 in cash,” Mr. Matthews adds.
MGM Resort International did not have the Matthews in mind when it embarked on its gleaming new $8.5-billion CityCenter project – the largest privately financed development in U.S. history. The project was intended to symbolize the city’s arrival as a destination for financially flush fashionistas.
Instead, it might be a white elephant. Aria’s rooms are going for one-third to one-half of their expected price tag, according to estimates.
Opened 10 months ago, the opulent CityCenter has a Henry Moore sculpture outside. Its 4,000-room Aria hotel-casino was designed by Cesar Pelli. Daniel Libeskind’s name is on the Crystals shopping concourse, where Versace, Tom Ford and Louis Vuitton have opened outrageously pricey outlets. Shoppers apparently didn’t get the memo. The mall is barren.
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The Globe and Mail is a division of CTVglobemedia Publishing Inc., 444 Front St. W., Toronto, ON Canada M5V 2S9Phillip Crawley, Publisher
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