Las Vegas is home to the most financially stressed population in America because of the economic crisis brought on by the pandemic, according to a report released this week.
WalletHub, a personal finance website, ranked Las Vegas ahead of Chicago, Houston, San Antonio and Dallas, respectively, as the U.S. cities that are home to “people struggling the most financially.”
WalletHub looked at several personal finance metrics — credit scores, recent bankruptcy filings and “average number of accounts in distress” — in coming up with its findings.
When the resort corridor shuttered for nearly 90 days starting in mid-March out of pandemic concerns to pause tourism, a record 30% of Nevadans were jobless.
Even now, with many of the properties open since early June, visitation is still a fraction of what it previously was and many workers are still sidelined. August saw 60% fewer passengers at McCarran International Airport compared with August 2019.
Some properties, like the off-Strip Palms, Rio, Main Street Station and Fiesta Henderson, are still shuttered to contribute to the state’s current unemployment rate at just under 13%. The national rate sits at just under 8%.
“The economy here isn’t going to come back until we start to get conferences back, which could be next year,” said Kevin Raiford, a business professor at the College of Southern Nevada. “Las Vegas is built for over-the-top events and big collisions — EDC, Raiders games, CES. Vegas is not meant to be for cyber-interactions.”
Gov. Steve Sisolak indicated this week that he hopes to increase capacity of conventions to 50% by 2021. It’s currently capped at 250, but can expand to 1,000 with a submitted plan.
On Saturday, Nevada had more 1,000 cases of coronavirus for the first time since July. Also, eight of Nevada’s counties have been flagged for elevated disease transmission.
“We rely on face-to-face interactions. Therapeutics and a vaccine, that’s what we have to wait for,” said Steve Miller, a UNLV business professor and director of the school’s Center for Business and Economic Research. “I think the best-case scenario is if we get the virus under control by end of next year. If that happens, 2022 could be a really good year in Las Vegas.”
There is a desire by many to travel to places like Las Vegas to let loose after being isolated because of the pandemic, Raiford said. But that’s not likely to happen until the virus is much more controlled than it is now, he said.
It’s not a matter of if Las Vegas will bounce back. It’s a matter of when.
“I’m optimistic,” Raiford said. “In three to five years from now, I think we’ll be better than ever. We do have to diversify and we do have to repurpose some people. There’s an entrepreneurial spirit now where people are starting to realize they can’t just rely on those big companies for employment. We have to take some chances and make them pay off, but that’s what Vegas is all about.”
In the short term, resort companies continue to shed workers while waiting for the economy to rebound.
The state released notices this week from Penn National Gaming of more than 350 layoffs at the M Resort in Henderson and the Tropicana on the Strip. Food service contractor Aramark also announced it will let go more than 300 workers at Park Theater and MGM Grand Garden Arena.
“We need a vaccine, we need stimulus, and we need economic diversification moving forward,” said Don Snyder, a former UNLV president and a longtime leader in the area’s business community. “For the tourism industry, it’s going to be tough. Convention business, I think, will be devastated for a long time. Part of being a major league city is not being too dependent on one industry.”
Snyder and Miller both noted that some areas under the umbrella of the Las Vegas economy haven’t suffered nearly as much as tourism and gaming. Generally, the tech industry in Southern Nevada has been able to weather the COVID-19 storm, and some restaurants, as Snyder pointed out, have been able to adjust their business practices to capitalize on current conditions and customer demand.
“There’s uncertainty everywhere, but there is some good news that is lost in the conversation from time to time,” Snyder said. “When you compare this to what happened during the Great Recession, everything was down then. Right now, the tech-based companies like Switch and Amazon, which has facilities here, they haven’t felt a downturn. Housing, general construction, and the auto industry, those are all spots that haven’t been devastated.”