The first signs of widespread tourist demand returning for Las Vegas aren’t quite visible, but several experts who track visitation trends say they’re ready to bubble up this year.
The coronavirus pandemic might have crippled visitation to Las Vegas, but the end could be relatively near as vaccine distribution begins ramping up.
“There’s clearly enthusiasm for what a successfully implemented vaccine rollout could do for the Strip,” said Barry Jonas, a gaming industry analyst for investment firm SunTrust Robinson Humphrey. “The question is when people will get comfortable.”
Steve Hill, president and CEO of the Las Vegas Convention and Visitors Authority (LVCVA), called vaccine distribution “the key” for Las Vegas to get humming again. The theory is that people worldwide will be ready to let loose once it’s free to go out from the safety of their quarantine, and Las Vegas is the perfect place to celebrate.
Hill is optimistic about this year, though he cautioned that shows and conventions are likely to initially have a “smaller footprint” when they return.
“Once we get into May and June, I think the city will feel close to what it normally is,” Hill said. “Room rates may not be quite as high, but it will be different. [In] the second half of 2021, we’ll see strong recovery.”
The economic crisis brought on by the pandemic has been especially hard-felt in Nevada, which relies on tourism as its main revenue generator and source of employment for residents. The downturn has brought historic jobless rates—once as high as 30%, but 10.1% in November—and $1 billion-plus deficit to Nevada.
Consider this: In 2019, the LVCVA reported that 42 million visitors came to Southern Nevada, whether for conventions and business travel, sporting events, to get married or for leisurely fun. In the initial 11 months of 2020, only 18 million came—the product of nearly 80 days of closures on the Strip, plus air travel coming to a near halt.
The resort corridor has already made small gains during the summer and fall with drive-in visitors, mostly from California. The gridlock of vehicles driving back to Southern California resembles any normal Sunday afternoon.
Mark Vitner, a Wells Fargo economist who tracks Las Vegas and other regional economies in the Southwest, said he expects tourism to start to come back in a noticeable way in a matter of weeks.
“After February, we see a strong recovery taking hold, at least in leisure travel,” Vitner said. “I do think we’re past the scariest part of all of this. Things will get progressively better.”
For Las Vegas to return to its pre-pandemic self—or something close to it—it’s necessary, experts say, for two main developments to take place.
First, mass distribution of the various COVID-19 vaccines must be successful. Then, once enough people receive the vaccines, they need to feel comfortable enough to partake in air travel.
McCarran International Airport, one of the busiest airports in the country, reported in 2019 that about 51.5 million passengers “enplaned and deplaned.” Airport officials reported only 20.5 million people passed through the first 11 months of 2020. But there are positive signs that air travel will eventually regain its footing.
Discount carrier Frontier Airlines recently announced six new 2021 routes to and from Las Vegas, including stops to places like Oakland, California, and Wichita, Kansas.
A Frontier spokesman said the airline “listened to our customers and recognized the pent-up demand for travel, particularly as the COVID-19 vaccine becomes more widely available.”
In a statement, Frontier executive Daniel Shurz said the airline has made a “strong commitment” to Las Vegas and that it hopes to continue to “build on our partnership through the addition of new service.”
As the airline noted, though, vaccine availability is likely the most important factor for the return of leisure travel.
As for business travel, it’s expected that corporate gatherings and trade shows will take longer to return, Jonas said.
In 2019, about 9% of the 42 million people who visited Las Vegas came for a convention, trade show or corporate meeting, according to the LVCVA.
The annual CES show, which normally takes place every January at the Las Vegas Convention Center, became an all-virtual event this year. That trade show alone would have brought about 170,000 visitors to the Valley.
“When we speak to companies like MGM [Resorts International], there’s some conservatism about the cadence of the recovery,” said Jonas, the gaming industry analyst. “It won’t just be snap your fingers and everything’s back. Conferences will have a mix of in-person and virtual components, and it’s reasonable to assume that companies will be cautious about sending employees to conferences.”
When tourists do return to the city in full force, they will get to see some new attractions, including the $2 billion Allegiant Stadium—home to the Las Vegas Raiders—just off the Strip, the new Circa Las Vegas resort Downtown and, soon, the new Resorts World property.
“To a large extent, we’ve built the next era of what Las Vegas will be,” Hill said. “That’s ready. It adds a level of attraction to what the city already was.”