December is usually a quiet month in Las Vegas.
Between National Finals Rodeo and the year-end holidays is a two-week dead zone.
And this December, it will be worse. There’s no rodeo. No huge New Year’s celebration. No shows or conventions. No scores of overseas tourists.
And with COVID-19 cases surging nationwide and air travel way down, the Strip could be a ghost town.
Gaming revenue is already down 30 percent from last year. Visitation is down nearly 50 percent for the same period.
So how can the industry weather the COVID storm? And is this just practice for the rest of the winter?
Howard Stutz is a longtime local gaming reporter and the executive editor for CDC Gaming Reports.
“We don’t have a lot of air travel. A lot of people aren’t traveling. There’s a lot of warnings. The CDC is telling people, don’t get on airplanes right now, don’t travel,” Stutz said.
So, while room rates are at historic lows, people are just not willing to take a plane to Las Vegas for a vacation.
Brendan Bussman is the director of government affairs and a partner with Global Market Advisors. He's an expert in the travel, tourism and gaming industries.
He agrees with Stutz that people feel it is just too risky to come to Las Vegas.
"I think, also part of that, is the uneasiness of where restrictions continue to float in between 50 percent, now 25, and hopefully after a couple of weeks here we might see a bump back up, but obviously, that depends on levels."
To add to that problem, conventions and corporate meetings have dropped to almost zero. Stutz said conventions and trade shows have become a big driver of the economy in the city. Gaming companies have added large convention areas to their hotels and those conventioneers have filled hotel rooms during the mid-week.
“Until that starts to come back next year – so goes the city and I think that’s going to be the biggest challenge as we move forward,” he said.
Bussman believes large conventions are probably a year away from returning to Las Vegas.
"I think we all have to see how quickly things can and can't roll out with regard to the vaccine, and obviously, where numbers continue to lie," he said, "The large conventions and those types of things are probably pretty much a year out just because it's going to take that long."
He believes entertainment, which like conventions employs a lot of people in the city and benefits from face-to-face interactions, will come back sooner because smaller venues are possible and show producers are already working on social-distancing workarounds.
There is a small bright spot in the gaming industry and that is locals casinos. Stutz said local casinos in Southern Nevada, and regional casinos in other markets within driving distance, are doing much better than destination areas like the Las Vegas Strip.
“There’s not a lot of entertainment options right now - that’s why you’re seeing a lot more people going into these local properties,” he said.
Another part of the gaming business that is weathering the COVID storm more than others is sports betting. Stutz said most of the gaming revenue from sports betting is coming through mobile betting.
It also helped that for a time the major sports in the U.S. were played at the same time and more states are allowing sports betting.
Stutz pointed out that the success of sports betting really depends on what happens with the virus because games have been canceled or rescheduled because of positive tests and outbreaks.
"Sports betting will continue to be a large portion of the business here in Las Vegas," he said, adding that it won't offset high-end gaming such as baccarat, blackjack and other big-table games.
Two events that help push the city through the winter are both canceled this year. NFR brings thousands of rodeo fans to town, along with auxiliary events like gift shows and country music acts to fill normally closed showrooms. Bussman said the loss of NFR is damaging to the city.
And while people will still be coming to Las Vegas for New Year's Eve, the fireworks and other large events associated with the big night are canceled.
Bussman said it is important that those who do come to visit understand what they're getting into, including safety protocols and health measures.
"They're setting those expectations early for guests so they know what to expect," he said. "We may see some changes in protocol between now and then based off of the pause the governor implemented about 10 days ago."
The pandemic has slowed gaming and tourism in Las Vegas, but business is moving forward. The first new casino in decades opened downtown in October. Circa opened its casino, pool area and restaurants, but not its hotel.
Stutz said while foot traffic at the property might be light, events he's seen at the property have been well-attended.
“It’s going to be hit and miss for this property as it comes forward," he said, "We’ll see what happens once the hotel portion is open and [owner Derek Stevens] is able to bring in his own guests to stay there."
Another property that is set to debut in January is the Virgin Hotel, which took over the old Hard Rock Hotel on Paradise Road.
Bussman is cautiously optimistic that it will open.
"I'm very excited for the Virgin product to hit this market," he said, "I think from everything I've seen, it will be very cool. But obviously they're weighing everything they need to do to make sure they make a big splash in Vegas."
He said we will just have to see how the market changes in the 45 days or so to the resort's planned opening because, as everyone has learned this year, things can change on a dime.
Both Bussman and Stutz agree that the biggest change to our current condition will be the arrival of the vaccine, which could be rolled out by the end of the month to frontline healthcare workers.
"Inoculating 300-plus million people across the United States, as well as [internationally], it's going to take time," Bussman said. "It takes time to produce that. It takes time to get all of that into place."
He believes people who want to travel get back to some sense of normalcy again will likely line up to get the vaccine in the second quarter.
Until the vaccine is rolled out completely, and travelers feel comfortable coming back, and conventions return, Stutz said the resort properties that fuel the city's economy will continue to do what they can to stay open and stay afloat.
“As long as they can keep it open and try to get some business in, that’s what they’re trying to do,” he said.
Howard Stutz, executive editor, CDC Gaming Reports; Brendan Bussman, director of government affairs and partner, Global Market Advisors
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