Las Vegas tourism revenue could be down next year amid economic jitters

Jeremy Aguero, principal for Las Vegas-based Applied Analysis, on Tuesday gave an accounting of how important tourism is to the region, prompting LVCVA President and CEO Steve Hill to preview what board members have to look forward to on May 13 when the budget is introduced and May 20 when a public hearing and final approval of the financial plan is scheduled.

With consumer confidence potentially waning, thanks in part to worldwide economic jitters, and the prospect of reductions in foreign travel, particularly from Canada and Mexico, Hill said the LVCVA is anticipating room tax receipts next year being down 5 percent from the current year.

With roughly three months of collections to go in 2024-25, Hill said receipts would come in the high $360 millions. The LVCVA had projected 2024-25 receipts of $361 million and for next year, the projection is $340 million.

The uncertainty of what the economy will look like in the future makes for a conservative projection for next year.

“It’s hard to tell what the tariff policy will be right now, three months from now, or seven months from now, any time frame,” Hill said. “So it’s certainly possible that those tariffs exist and they will be passed on to whatever the concern is.”

Aguero, an admitted optimist, is confident Las Vegas will bounce back as it has on many occasions.

COVID shutdown

“I suppose, we need to look back not that long ago at COVID-19 and remember what it was like when our tourism industry shut down,” Aguero said. “Obviously, there were impacts across the entirety of the United States, but our unemployment rate went to the highest rate ever reported for any metropolitan area in the United States, a reflection of our dependence on that. I suppose we could have a long conversation about the resourcefulness and the resiliency of this industry, its importance generally, the importance of this board, the importance of this building that we’re standing in today (the Las Vegas Convention Center), relative to ensuring that people want to get on a plane or get in a car and come visit Las Vegas.”

In 2020, the city’s most recent low-water mark with around 19 million visitors, the state’s resorts were shut down for 78 days in the spring.

Working with data provided by the LVCVA Research Center, analysts can pinpoint how many people visit Las Vegas, how much they spend, how much they gamble and how those factors translate into jobs and salaries to workers directly hired by tourism businesses as well as the indirect jobs and salaries provided by companies that serve as suppliers to tourism businesses.

Aguero report

To that end, Aguero told board members:

— Visitation to Las Vegas has grown steadily since 2020’s COVID-addled year to reach 41.7 million visitors in 2024, but the pace of visitation growth has declined over the past three years.

-Southern Nevada visitors spent $55.1 billion in their visits — about $1,322 per person, per visit.

— Visitor spending has increased steadily since 2020, some of it due to higher prices in Las Vegas.

— An estimated 252,610 employees — one in five of the entire Southern Nevada workforce — have direct tourism jobs.

— An estimated 385,330 employees — one in three of the Southern Nevada workforce — have jobs that somehow support the tourism economy.

— The payroll of direct jobs is around $14.6 billion a year; the indirect payroll is around $21.3 billion a year. All of those employees spend their money, much of it in Southern Nevada, contributing to the total economic impact of tourism.

— The total economic output supported by tourism is estimated at $87.7 billion a year, roughly half of the region’s gross domestic product.

— Convention attendance is critical to the tourism economy and conventioneers spend $1,681 per trip compared with $1,262 by leisure travelers. Aguero remarked that spending by conventioneers in Las Vegas is generally greater than what leisure travelers spend in other destinations.

Earlier in the meeting during public comment, Ed Uehling, a frequent critic of the LVCVA board, said he was disappointed that its strategies haven’t grown visitation at a better pace. He figures Las Vegas should be attracting at least twice as many visitors as it has gotten over the past few years.

Hill said next year has the markings of stellar convention attendance numbers with big trade shows forecasting higher numbers and the fact that the two-year $600 million Convention Center modernization project will be completed.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.