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Las Vegas Tourism Collapses: 3.5 Million Monthly Tourists to ‘Virutally Zero’

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Like much of the country, Nevada has all but shut down, with the bright lights of the Las Vegas Strip replaced with the flashing lights of police cars stationed in front of casinos amid efforts to slow the spread of COVID-19.

“This is this is unbelievable. I mean, we do the Haunted Vegas tour, I did not think that the next ghost town was going to be Las Vegas,” Adam Flowers, co-owner of Vegas Specialty Tours, told Fox News.

Police are stationed outside casinos
Police are stationed outside casinos. (Emily Lierle)

In a typical year, Las Vegas would be swarming with people, welcoming roughly 42 million tourists to Sin City, the streets filled with unabashed eyes soaking in the sea of neon.

“So that's 3.5 million guests in an average month, and [now] that's obviously, for the current period time, virtually zero,” Steve Hill, Las Vegas Convention and Visitors Authority (LVCVA) CEO, told Fox News. “It is shocking how different the outlook is from six weeks ago and three weeks ago. You know, we've all been shocked, frankly, by the speed and the depth of how this has hit us.”

Casinos in Las Vegas are shut down as health officials look to curb the spread of coronavirus
Casinos in Las Vegas are shut down as health officials look to curb the spread of coronavirus (Image: FoxNews)

No other state in the nation relies more heavily on tourism to drive its economy than Nevada.

The industry made up one-fifth of Southern Nevada’s gross domestic product (GDP), or roughly 18.4 percent, in 2017. Tourism generates roughly $58 billion annually for Southern Nevada and supplies nearly 370,000 jobs, representing about 40 percent of employment in Clark County, according to the LVCVA.

To compare, tourism represented about 16 percent of Nevada’s total economic output in 2018, while Hawaii came in second at 10 percent — no other state in the country had a tourism GDP of more than 6 percent, according to PEW data.

Additionally, the leisure and hospitality sector accounted for roughly 40 percent of the state’s general fund, Hill said.

las vegas empty

“Nevada is more dependent on tourism and hospitality than Alaska is on oil or Montana is on coal or Michigan is on the auto industry. It is a bigger part of our economy than any other state has with a single economy,” Hill said. “So you're right, it is a very difficult time for the Nevadans. But as I said, once we get this behind us, we are still Las Vegas. We are the place that people want to come back to as soon as they possibly can.”

MGM along with other casinos on the Strip display messages of hope by lighting empty hotel rooms. (Emily Lierle)

This past March, the Trump administration issued a level 4 travel advisory, the most severe warning on the State Department’s scale, urging U.S. citizens to avoid all international travel due to the coronavirus outbreak. The President imposed a travel ban on most European countries and China and suspended nonessential travel between both the southern border in Mexico and the northern border in Canada.

Roughly 17 percent of tourism in Las Vegas is international, with the bulk coming from Canada, Mexico and the U.K., Hill said.

The Wynn casino displays the message Vegas Strong
The Wynn casino displays the message Vegas Strong

Nevada Gov. Steve Sisolak made the unprecedented decision in March to shut down the Las Vegas Strip, a tough but necessary move, Hill said.

“Our governor has taken the right steps. Closing the strip was painful, but it was clearly the right thing to do,” Hill told Fox News, adding that the early decision to shut things down, coupled with assistance from the federal government to help bridge the gap with programs like the Paycheck Protection Program, will help the industry come out “healthy on the other end.”

The streets up and down the Strip are empty.
The streets up and down the Strip are empty

“We're trying to cut as many expenses as we can. you know, if this thing goes to July, will we still be able to hang on? I don't know. I hope so. I really do. But I don't know,” he said. “I mean, like I said, our tour guides are doing other jobs, other gigs … I might have to jump in there and start doing tours again. I have no clue what's going to happen.”

Robinson said that the assistance from the federal government with the additional funding in the Cares Act will help keep money in the pockets of workers who lost their jobs, however, the real concern lies with the companies and whether they will be able to financially recover.

empty las vegas

“All the big companies are still billions of dollars in debt and they've got to keep their debt payments somehow or refinance their debt, but there are huge financial problems and the casinos might actually be in bigger financial trouble by the end of this than the workers are,” Robinson said.

The turmoil and financial instability could cause companies to sell off certain properties to recoup some money, which was the case in 2008 when MGM sold Treasure Island to billionaire Phil Ruffin.

“We could see better competition and a lot of new players in town and maybe some good coming out of it that,” Robinson said. “I don't think they're going to go bankrupt, but they might be in that position where they're forced to sell off some properties to cover their debt burdens.”

It’s been more than 50 years since casinos on the Strip closed down for John F. Kennedy’s funeral on Nov. 25, 1963, but this is the first time that all Nevada casinos statewide have been ordered to close, Michael Green, a history professor at the University of Nevada Las Vegas, told The Associated Press.

The unprecedented situation has officials preparing for any number of scenarios in trying to factor the severity of the economic impact when the stay-at-home order and travel restrictions are finally lifted.

“It is a broad range of potential outcomes, that's for sure. And right now, and we’ll tell our board this in a couple of weeks, that we're modeling between 50 and 70 percent of what we anticipated in a normal year next year in terms of room tax revenue,” Hill said, adding: “We're not going to just flip a switch and things are going to return to normal.”

The streets are empty in las vegas

But, when things do ultimately return to normal, you can bet on one thing.

“We're going to throw the biggest party the world has ever seen. When we can welcome our visitors back, everybody is going to need it. And there's no better place to have it than here in Las Vegas,” Hill said.

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