Senate Subcommittee Hears How COVID-19 Hurt Las Vegas, Gaming Industry
Posted on: April 13, 2021, 11:55h.
Last updated on: April 14, 2021, 10:43h.
Las Vegas and the gaming community had the ear of US senators on Tuesday, as the Senate Commerce subcommittee on Tourism, Trade, and Export Promotion met for the first time.
Steve Hill, president and CEO of the Las Vegas Convention and Visitors Authority, and Jorge Perez, regional portfolio president for MGM Resorts International, were two of the four tourism and hospitality industry leaders to testify. The topic for Tuesday’s hearing was the state of travel and tourism during COVID-19.
The subcommittee came about in February, and in her opening statement, Rosen said she plans to use the panel to find bipartisan solutions to jump-start the travel industry coming out of the pandemic.
“Travel and tourism-related industries drive job creation and economic growth in states across America, especially in Nevada, where these industries and the workers they employ are absolutely essential to our state’s prosperity,” she said. “This pandemic has hit Nevada particularly hard. It brought our travel and tourism-heavy economy to a screeching halt and decimated the jobs that those industries support.”
Lack of Travelers Hammered Vegas Economy
Hill used data to show just how bleak it’s been for Las Vegas over the last year. The LVCVA receives a significant amount of funding from the room tax applied to visitors’ stays in the region. Most years, that tax generates about $300 million for the authority.
When the current fiscal year ends in June, the LVCVA will have received about $100 million. He also told lawmakers the recovery won’t be as rapid as the fall.
We are projecting next year that we will receive about 70 percent of our normal room tax revenue,” Hill testified. “So, we will show improvement, but it’s only about halfway to where we need to be over the next 12 months.”
Hill’s testimony comes just days after an LVCVA spokesperson told Casino.org the authority was planning to cut the current budget by nearly $80 million.
Because the hospitality industry accounts for a quarter of Nevada’s workforce, the state relies on travelers, domestic and international, to keep the economy moving. Or, in this instance, the state will need to see the number of travelers increase in order to help bring back more of the jobs the state lost over the past year.
Some of that will be starting to happen soon. He noted one of Vegas’ largest trade shows, the World of Concrete, will return in June. It may not bring the 60,000 people it normally does, but the numbers will be significant, Hill said.
The next step will need to be welcoming back the foreign visitors, who tend to stay and play longer than domestic guests. Those visitors make up about 15 percent of the travelers to Vegas, he noted.
“And that has been almost completely shut down and has not really started to recover at this point,” Hill said.
Recovery May Take Years, MGM Exec Says
Perez, who presides over MGM’s eight US regional properties, said those properties did not suffer as much as Las Vegas casinos, since they draw their visitors from the surrounding region. Still, the entire travel industry suffered through the past year.
He said that travel spending declined by $500 billion last year, and because of the residual economic effect, that cost the US economy about $1.1 trillion.
“At the current pace, the traveling industry is not expected to fully recover on 2025. But we are hopeful the recovery will arrive much sooner,” Perez said.
One way he noted that Congress can help is by passing Senate Bill 477, the Hospitality and Commerce Job Recovery Act of 2021. The legislation, sponsored by US Sens. Catherine Cortez Masto (D-Nevada) and Kevin Cramer (R-North Dakota), extends tax credits to keep workers on the payroll. It also creates tax incentives for hosting or attending a trade show. The bill also creates tax credits for certain travel expenses for US families.
“We also welcome the safe and science-based easing of government restrictions, which will permit us to bring back more of our world-renowned amenities to a greater number of guests, allowing us to bring back more of our employees,” Perez said.
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