Las Vegas’ streak of declining gaming revenue and visitors continued in November, with gaming revenues dropping nearly 15 percent and tourism numbers down almost 10 percent.
Nevada’s gaming revenues regressed to 2004 levels during the month, with casinos statewide winning $836.8 million, a drop of 14.8 percent compared with November 2007’s $982.1 million, according to figures released Friday by the Gaming Control Board.
Analysts say gamblers coming to Nevada are just not spending the dollars they spent in the past.
That's the customers who are actually coming.
The number of people who visited Las Vegas in November fell 9.8 percent to about 2.8 million, the Las Vegas Convention and Visitors Authority reported Friday.
November’s gaming win figure — the lowest one-month statewide gaming revenue total since July 2004 — was the 11th straight monthly decline in 2008 and the fourth time last year that gaming revenues showed a percentage decline in the double digits.
The November drop followed a decline of 22.3 percent in statewide gaming revenues in October, the largest single-month decline in state history.
For the first 11 months of 2008, gaming revenues statewide are down almost 9 percent.
The news was not much better on the Strip. Gaming revenues in November were $437.7 million, a 16 percent drop from $521.2 million in November 2007. The mark was the lowest amount won by Strip casinos since November 2004.
For the first 11 months of 2008, gaming revenues from Strip casinos are down 9.3 percent.
The visitor numbers have been equally bleak.
For the first 11 months of 2008, visitation has declined 3.8 percent to about 34.7 million people. Visitation fell in nine of the 11 months of 2008.
In addition to reducing the number of people who come to Las Vegas, the recession is prompting the ones who do visit to spend less on their trips.
The average daily room rate for the month fell 8.1 percent to about $109.
Room rates for the year are down 9.5 percent to $125. Conventions, events Las Vegas resorts began cultivating decades ago to hedge against slow times in the leisure market, are down more than tourism.
That’s especially bad for locals who rely on tips for a living because a typical convention customer spends about twice as much as the average tourist during a Las Vegas visit.
In November convention attendance was down 16.4 percent to 503,545. For the first 11 months of 2008, convention attendance is down 5 percent to about 5.8 million.
Frank Streshley, the Gaming Control Board’s senior research analyst, has been looking at gaming revenues for 10 years. He said it will be several months before there’s any type of significant recovery.
“These figures show us just how far we have fallen,” Streshley said. “When we start seeing some type of recovery in the economy, then things might pick back up. But that’s going to take some time.”
During November, gamblers statewide wagered $9.74 billion on slot machines, a decline of 12.1 percent, and $2.1 billion on table games, down 10.1 percent from a year ago. On the Strip, wagering was down 19 percent on slots and 10.4 percent on table games.
“Results were impacted by (a) soft spend given a deteriorating macroeconomic environment,” JP Morgan gaming analyst Joe Greff told investors.
Jacob Oberman, who analyzes the casino industry for CB Richard Ellis’ Global Gaming Group, said the November numbers are even more disheartening because hotels have supplanted a decline in convention business with more leisure and casino customers taking advantage of low rooms rates and other specials.
“Casino and leisure customers gamble more than the average convention visitor, meaning one would expect stronger gaming revenues with all other things being equal,” Oberman said. “It is a double whammy since convention customers also typically pay more lucrative room rates, which are also higher margin for the operators.”
Gaming taxes collected by the state based on the gaming revenues were $44.4 million, a 27 percent decline compared with $60.9 million collected a year ago.
Going into November, Streshley and other analysts thought the month might be a turnaround for the gaming industry. The November 2007 gaming win figure was a decline of almost 13 percent compared with November 2006.
“Basically, what happened in October just carried over into November,” Streshley said. “Unemployment was climbing and that impacts spending.”
November also ended on a weekend, meaning some slot machine revenues will be carried over into December’s revenue totals. Streshley estimated the figure to be around $40 million, not enough to offset the double-digit decline.
Every reporting area of the state had a down month. Gaming revenues fell almost 16.4 percent on the Boulder Strip and 18 percent in Laughlin.
North Las Vegas gaming revenues were down just 1.8 percent but Station Casino’s $662 million Aliante Station opened Nov. 11, which may have offset some of the losses.
Gaming revenues at casinos in downtown Las Vegas declined 1.6 percent.
As a whole, gaming revenues in Clark County were down more than 15 percent.
Washoe County suffered its 17th straight monthly gaming revenue decline.
The downturn is having more of an effect on fly-in tourism business.
The total number of arrivals and departures at McCarran International Airport fell 14.7 percent in November to 3.2 million. For the year, McCarran arrivals and departures are down 7.1 percent to about 40.9 million.
Drive-in traffic fell 5.5 percent in November to an average of 80,019 vehicles per day on all major highways. For the year through November, the average daily traffic into Las Vegas is down 5.6 percent to 82,216.
Jeremy Aguero, principal at the economics research firm Applied Analysis in Las Vegas, also said the downturn in local visitation looks especially stark because autumn of 2007 was a high water mark for Las Vegas. This year, autumn was dominated by news of failing banks.
“To think that is not going to have an effect on consumers and consumer spending is ridiculous,” Aguero said.
In addition to a downturn in Las Vegas, outlying Clark County communities also felt the sting of recession.
Laughlin visitation fell 11 percent in November to 204,022. Yet room rates in Laughlin increased 15.9 percent to an average of $44.01 per day.
In Mesquite, visitation was down 19.3 percent in November to 106,370.
Room rates there were down 16.7 percent to $50.09.