LV sees fewer visitors in June

About 3.2 million people visited Las Vegas in June, a 3.1 percent drop from the same month last year.

The visitation dip came despite a 16 percent decrease in the average daily room rate to $113, the largest one-month decrease since February 2002, when Las Vegas was still recovering from the fallout of the Sept. 11, 2001, terrorist attacks.

It also coincided with oil prices reaching $140 per barrel, which could explain a 6.8 percent decrease in drive-in traffic for the month.

"The main problem in my market ... is the price of gasoline," said Michael Gaughan, owner of South Point casino. "It has been full every weekend, but I am not getting the rate I want."

Gaughan isn't alone.

Room rate figures reflect a monthly survey of Las Vegas hotel operators representing about 75 percent of the total inventory, according to the Las Vegas Convention and Visitors Authority.

The survey, which is reported along with visitation figures, shows what many have suspected.

Las Vegas hotel operators are spending more money to attract the same or fewer numbers of guests.

The June occupancy rate was 89.3 percent, two points lower than the previous June.

It's the cumulative result of high gasoline prices raising the cost of travel to Nevada and low home values making people feel poorer and less apt to go on a Las Vegas spending spree.

"Las Vegas, as everyone knows, is a destination that provides everything you want if you have the money," said Dennis Farrell, an analyst with Wachovia Capital Markets.

Now that people aren't feeling as flush, it is taking the shine off the Las Vegas experience, according to some tourists.

Nicolas Cignetti of Canton, Ohio, said the mood was sour en route home from his most recent Las Vegas visit in late July.

Cignetti, a longtime Las Vegas visitor, said the slots seemed tighter and comps stingier than during past visits.

"Most people were disgusted and had no plans for returning in the near future," he said, describing the flight home in an e-mail after the trip.

Even more ominous for Nevadans who depend on the tourism industry for a living, he wrote: "As for us we decided that this would be our last trip for the year if not longer. Sad to say, Vegas is no longer a fun place to visit."

The latest figures from the convention authority predate Cignetti's visit but reflect the same sentiment.

Overall airline traffic was down 7 percent and the category that includes charters and direct international service, considered a potential source of revenue to offset the domestic downturn, was down 7.2 percent.

Kris Tibbs, senior research analyst for the authority, said the visitation decline was less severe than the auto and air declines because the latter figures reflect less driving and flying by locals, business and cross-country travelers in addition to Las Vegas tourists and conventioneers.

The visitation figure is compiled separately using hotel room night sales and information about lengths of stays gleaned from surveys of tourists, Tibbs said. Visitation to Laughlin and Mesquite also declined in June.

Laughlin visitation fell 14.3 percent to 229,006, while room rates fell 3 percent to $42.41.

In Mesquite, visitation fell 1.2 percent to 126,188, and the room rate was down 40.3 percent to $45.47.

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.