Tourists are flocking to the city of Las Vegas, and the Southern Nevada gambling metropolis hold on the global gaming market continues to grow substantially year after year. Not only are the people coming in bigger numbers than ever before, they’re spending more in shops, restaurants, and nightclubs, sometimes surpassing even gaming revenues.
A report by economic analyst Jeremy Aguero, presented to the Las Vegas Convention and Visitors Authority (LVCVA) this week, revealed some 42.9 million people visited Southern Nevada last year, 16.3 percent more than in 2015, which was itself a record-breaking year. Collectively, they spent $30.5 billion, an average of $827 per head, up from $721 the previous year.
Convention attendance was also up, by 7.1 percent, from 2015. Conventioneers now comprise 14.7 percent of all visitors to Southern Nevada.
Aguero’s report was designed to highlight the benefit of increased tourism to the local economy. It found that visitor spending is equal to about a third of Southern Nevada’s gross product, while, both directly and indirectly, tourism supplied $59.6 billion, or 57.7 percent, of Southern Nevada’s gross product.
Lack of Diversity
The report found that almost half of all people employed in Southern Nevada had jobs because of tourism, some 407,000 people, or 44.2 percent of the working population. Meanwhile, one in four people in the region are directly employed in the tourism industry.
In all, gross economic output, or value added to the economy by tourism, is about $103 billion dollars per year.
“This is, of course, a wonderful thing for us,” Aguero said, of the tourism boom. “It means more heads in beds, more spending, more jobs, more economic output. Forty cents out of every dollar paid to an employee in southern Nevada is directly or indirectly a result of our tourism industry,” he added.
Is there a downside? Well, if there is, it lies in the fact that there isn’t a great deal to the Vegas economy outside tourism.
“The unfortunate thing is that I have to report to you that we have not made as much progress in terms of economic development and diversification,” said Aguero. “It remains the least diversified economy of our size in the United States.
And that’s not because businesses are not moving here. In reality, the tourism industry continues to expand at such a clip, that it’s hard for other industries to compete.”
However, Faraday’s electric car manufacturing plant, currently under construction at the Apex Industrial Plant, hopes to start building cars as early this year, and expects to hire 4,500 locals. Could this be the beginning of a new trend in job creation beyond the tourism industry?
The tourism boom has been driven by an explosion of non-gaming amenities and attractions in recent years, such the creation of MGM’s T-Mobile Arena, which opened last year. Meanwhile, the prospect of the Oakland Raiders relocating to Vegas and the creation of another new stadium should provide a further boost to visitation numbers.
Nevada lost about 186,000 jobs during the recession when the unemployment rate hit 13.7 percent at its worst. The current rate is 5.7 percent, a figure that’s considered “healthy” for an economy, according to the Federal Reserve.