2023 in Las Vegas: Several major projects to open amid recession worries
Last year, 2022, was a banner year for the Strip and Nevada’s gaming industry. Records were broken in both revenue and visitation.
In 2023, the MSG Sphere will debut, Fontainebleau casino-resort is expected to open, and Formula One racing is coming to the Strip. Also, a new local’s casino will open.
So, it sounds like the good times will keep rolling in 2023, right? Maybe not. Economists and other experts are still expecting a downtown in the economy; maybe a recession. If that happens nationwide, what happens here?
“I think we’ve … seen a lot of really positive changes in the city over the last few years,” said Amanda Belarmino, an assistant professor with UNLV’s Harrah College of Hospitality. “The influence of sports, I don’t think can be underestimated.”
She told State of Nevada host Joe Schoenmann that’s helped weather an unbalanced economy, and Las Vegas has also become a holiday destination for some.
“I think that we've seen some consumer behavior changes that have been positive for us, and then changes that have been made within the city that are helping us,” she said.
She thinks Las Vegas would have already been affected by a recession, and that the city will continue to weather the uncertain economy better than other places.
“I don’t know that we can predict another banner year,” she said. “I think what we've seen is there's a lot of predictions of an untraditional recession, a recession that isn't going to behave as it normally does. Because we're already seeing layoffs. We're seeing layoffs at Google and Amazon and Facebook that are indicating that there is definitely a softening going on, we have an unpredictable stock market. So all of those things are hallmarks of a recession. But from what we're seeing in travel and gaming, it seems to be counterintuitive.”
Part of the high expectations for 2023 in Nevada comes from the fact that major developments on the Strip will open: the Fontainebleau will be a new resort on the north end of the Strip, the MSG Sphere, at $2.2 billion, will open.
The Fontainebleau stopped construction in the last recession, and is being completed this year by its original developers. Howard Stutz, a gaming reporter for The Nevada Independent, said it has a similar feeling to the Cosmopolitan’s opening in 2010 and Resorts World and Virgin Hotels in 2021.
“Those three properties were one-off properties, meaning they were not part of like, MGM or Caesars, where you're in a company that has a huge huge database of Vegas visitors,” he said. “Cosmopolitan struggled its first few years because they didn't have a database. Virgin has struggled a little bit; Resorts World, they did something unique, because all their hotel rooms are operated [as] part of the Hilton chain. Will Fontainebleau do that, put some of their 3,700 rooms into a hotel chain? … Will they be able to transfer a lot of those customers to Las Vegas?”
Both Fontainebleau and MSG Sphere are going to need thousands of workers.
At the Preview Las Vegas Event on Monday, the president of the Sphere gave a presentation about the different programming they would have. Stutz said one of the things he talked about was the exosphere and its potential for advertising.
“They want to have it ready for Formula One, that's the big plan because Formula One, the tracks are gonna go right around it. So it's gonna have a very big presence during the Formula One race,” he said.
Another new property set to open in 2023 is Station Casinos’ Durango in the southwest valley.
David McKee is the North American gaming editor for Casino Life Magazine and a gaming columnist for the Las Vegas Advisor.
“It's an area that's been growing very fast in recent years. Stations sat on that particular piece of property for two decades. And in this case, their patience is likely to pay off because it really looks like they have chosen the right moment to come to market with a major new product,” he said.
The Las Vegas Review-Journal recently reported six projects by Station Casinos are already in the works. McKee said if we see an economic slowdown, “you’ll see Stations put the brakes on some of those developments. … They got their bell rung pretty badly back in 2008.”
Eastside Cannery, owned by Boyd Gaming, remains the only closed casino property since the pandemic.
“I think it would take a major upturn in local’s gaming, beyond what we’ve seen, to justify [reopening it],” he said. “It’d be a terrible shame if they demolished it, although I don’t think that’s likely to happen.”
Also with State of Nevada on Tuesday morning was Josh Swissman, a founding partner of The Strategy Organization, a Las Vegas consulting firm for the gaming and hospitality industry.
He said Formula One is the first real event in Las Vegas with international appeal – bringing tourists to Southern Nevada who stay longer and spend more. If you’ve been to a Vegas Golden Knights or Las Vegas Raiders game, it’s clear people are traveling for sports.
“... has been something that the city needs and continues to need, and hopefully will continue to benefit from in the future,” Swissman said.
For 2023, he said he sees some records being broken again.
“Whether we're talking about passengers coming into and going out of Harry Reid International Airport, we're talking about gaming revenue for the state, I still think that there are some records to be broken in 2023,” he said. “What I do think we're going to see is some of these double digit percentage growth rates that, you know, we had the pleasure of enjoying throughout 2022; I think we'll see fewer of those in 2023, and perhaps even see a month here, a month there, where you might see numbers that are less than what they were a year ago, but net for the destination for the year. I'm still positive and I think we're gonna see growth.”
Guests: Amanda Belarmino, assistant professor, UNLV’s Harrah College of Hospitality; Howard Stutz, gaming reporter, The Nevada Independent; Josh Swissman, founding partner, The Strategy Organization, David McKee, North American editor, Casino Life Magazine