Friday, December 10, 2010

WTF??!! I'm Right Again?

This week, we've had some great news on the economic front. Las Vegas October 2010 visitation numbers rose 5.7% over October 2009, and Nevada casino winnings rose a whopping 11% in October 2010 over October 2009. So are we really there yet? Are we recovering?

Perhaps so, but don't expect everything to come up roses just yet.

Gaming industry leaders are confident visitors will return in greater numbers in 2011, benefitting hotels, restaurants and resort amenities, but they’re less confident about whether their casinos will see a similar increase.

“I feel good about the pricing environment and rates in ’11,” said Jonathan Halkyard, senior vice president and chief financial officer of Caesars Entertainment. “But it won’t even be close to what we had in 2007.” [...]

“It’s a little more difficult to predict what will happen with gaming, but it’s not looking great right now,” Halkyard said.

The reason is that most consumers have seen their net worth or those of close friends and family members plummet, he said. The downturn in gaming revenue correlates more with consumer net worth and what has happened to the housing market than today’s unemployment rate, he said.

“We’re going into ’11 cautiously, but as far as gaming is concerned, I think we’re in for more tough sledding,” he said.

Again, The Great Recession has changed many consumers' spending habits. These people used to be able to visit Las Vegas perhaps three or four times a year, but now they're lucky if they've been able to come any time since 2008.

Come on, let's face it. Feeding the family, trying to avoid foreclosure, and saving some cash just in case that dreaded pink slip arrives may be far more important priorities for most Americans than fitting in another Las Vegas or Reno/Tahoe vacation. That's just the awful truth of our "new (economic) reality".

So what can we do? Well, haven't we talked about this before? Seriously.

And guess who agrees with me now?

“Touting ourselves as a low tax state as the only reason people want to come here has proved to be a failure,” said John Restrepo, principal of Restrepo Consulting Group and a member of the study group. “If low taxes were all we needed, and we have been touting that, we wouldn’t have a 15 percent unemployment rate.”

The group’s report, “Nevada: 50th in the Nation for Education,” emanated from a round-table discussion among representatives of banking, architecture, law enforcement, education, real estate and government.

They met in August under the sponsorship of UNLV’s Lied Institute for Real Estate Studies and have published their findings. Dominant among them: Nevada won’t diversify its economy and prevent another deep recession unless education is valued in the community and more money is invested in public schools and colleges.

People and businesses leave Nevada or never move here because the educational system fails to meet their needs. The region is particularly off-putting to innovative, cutting-edge employers who seek excellent schools, the report said.

“We can no longer shortchange the state’s public schools, colleges and universities because of a lack of financial, political, social and economic will,” the report said. “To do so is shortsighted and will simply find us falling further behind Arizona, California, New Mexico, Utah and other states in the push to lure the innovative entrepreneurs, investors and workers of the coming decades. To do so will relegate Nevadans to continued cycles of boom and bust that are heavily dependent upon the uncertain fortunes of the gaming, construction and government-employment sectors.” [Emphasis mine.]

Get it now? We have to. We have no other choice at this point.

1 comment:

  1. Yeah, I loved that too. But all it will take is a little blip upwards in gaming revenues - and that could happen with just a bit of finagling of the numbers - and everybody will just forget about that boring old education and economic diversification stuff again.
    I mean, I just isn't sexy. Right?