60°F
weather icon Mostly Cloudy

After recession, Las Vegas’ tourism industry comes full circle

The Las Vegas tourism industry has come full circle since the 2008 collapse of Lehman Brothers Holdings, which intensified the Great Recession.

A Las Vegas marketing campaign image.
A Las Vegas marketing campaign image.

Part of Southern Nevada’s reaction to the economic downturn left in the wake of the financial institution’s demise was a decision to put a needed expansion of the Las Vegas Convention Center on hold.

On Sept. 11, four days short of 10 years to the day that Lehman Brothers filed for Chapter 11 bankruptcy protection, the Las Vegas Convention and Visitors Authority voted to put the final pieces in place to start the $935.1 million expansion, which has been on hold for a decade.

“Not only is our project going full steam, but 10,000 hotel rooms are being built in Las Vegas, there’s new meeting space being built by Caesars (Entertainment) and Wynn (Resorts Ltd.), and other projects like the Raiders stadium and the Madison Square Garden Sphere are going on,” said Cathy Tull, the LVCVA’s chief marketing officer.

Tull, who has been with the LVCVA since 2005, has been a part of the strategic planning around the industry’s recovery from the recession.

‘Always changing’

“One of the great things about Las Vegas is that the destination is always changing and there’s always something to talk about,” she said. “It never gets old. You’re never at a loss for what you’re going to do today.”

Many of the policy changes and recovery strategies implemented by the LVCVA were engineered by former CEO Rossi Ralenkotter, who declined to be interviewed.

The early 2000s were a time when the community “was really moving and shaking and going places,” Tull said.

“There was an opportunity to find jobs, there was affordable housing and it was really a city on the move and welcoming, and people were moving here like crazy,” she said.

Some of Southern Nevada’s peak years in tourism metrics occurred then. Local resorts had their best average weekend occupancy rates, 95 percent, in 2004 and 2005. The best-ever overall occupancy rate of 90.4 percent occurred in 2007. That was also the year Clark County had its best casino win in history at $10.9 billion.

Then, the bottom fell out.

In January 2008, the LVCVA began seeing some of the early indications that the tourism economy wasn’t as robust, portending the economic hard times ahead.

Repeat visitation by the city’s most loyal customers started to fall off. The meetings and convention industries were affected. Nevada’s unemployment rate skyrocketed to more than 13 percent.

Obama’s powerful words

It didn’t help in 2009 when then-President Barack Obama, scolding financial institutions and their executives for extravagant spending, invoked Las Vegas in a speech.

“You can’t go take a trip to Las Vegas or go down to the Super Bowl on the taxpayer’s dime,” he said. A year later, Obama warned families against gambling away college tuition: “You don’t blow a bunch of cash in Vegas when you’re trying to save for college,” he said.

Tull said it was clear that Obama didn’t recognize the power of his words. He was roundly criticized at the time by then-Mayor Oscar Goodman, the LVCVA board of directors chairman.

That was a low point and the LVCVA was forced to implement new strategies to get visitors back.

The LVCVA mobilized strategies for domestic and foreign leisure travelers as well as business customers.

Crazy times

One of Tull’s favorite Las Vegas advertisements emerged in one leisure campaign called “Crazy Times Call for Crazy Fun.” It was memorable because the U.S. Postal Service demanded the ad be discontinued in a cease-and-desist letter because it poked fun at postal workers and the post office environment.

“When we were doing our research, people kept saying, ‘It’s just crazy … it’s just a crazy time,’ and they used that word so much,” Tull recalled. “So finally, we did a number of both print and TV ads. One of my favorite ads got a cease-and-desist letter from the U.S. Postal Service.

“You know you’re doing something right when you get a cease-and-desist (letter) from the post office,” she said. “It was that idea that people needed an outlet, they needed a break and they said that they needed to let off a little bit of steam in a responsible way. But they could do that here because there were some great deals happening in Vegas.”

During the tumultuous times, the LVCVA froze salaries and didn’t fill openings when employees left. Unlike local government entities, the LVCVA couldn’t close one day a week because of the nonstop convention schedule. Instead, employees were ordered to take one furlough day per two-week pay period. The end result: Not a single LVCVA employee was laid off during the recession.

Full recovery

A Las Vegas marketing campaign image.
A Las Vegas marketing campaign image.

Today, Tull believes Las Vegas has fully recovered from the recession.

Recent statistics bear that out. In 2016, a record 42.9 million people visited the city. That year, the record 95 percent weekend occupancy rate was matched. In 2017, the city hosted a record number of convention delegates, 6.6 million.

And the biggest indicator will be at the northwest corner of Paradise Road and Convention Center Drive, the site of the planned 1.4 million-square-foot convention center expansion, which includes a 600,000-square-foot exhibition hall.

Due to open in time for the 2021 CES, the new building paves the way for Las Vegas to have the second-largest convention center in North America.

The project will support nearly 14,000 construction jobs and more than 7,800 full-time permanent jobs upon completion, according to the LVCVA. It will generate an additional $2.1 billion in economic activity during construction, with an annual incremental economic impact of $810 million while attracting more than 600,000 additional visitors each year.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

Don't miss the big stories. Like us on Facebook.
Business Videos
How much do Las Vegas casino CEOs make?
Las Vegas gaming CEOs made anywhere between $1 million and $24 million last year, according to company filings with the U.S. Securities and Exchange Commission. ((Las Vegas Review-Journal)
30-year-old Rio needs a little TLC
Nearly 30 years after the Rio opened, the red and blue jewel that helped catapult Las Vegas to a new level with its buffet and nightclub has lost its status along with its shine.
The latest on the Drew Las Vegas - VIDEO
Eli Segall recounts his tour of the Drew Las Vegas, formerly the Fontainebleau, on the Las Vegas Strip. (Michael Quine/Las Vegas Review-Journal)
Pinball Hall of Fame to move near south Strip
Operators of the Pinball Hall of Fame have been approved to build a new, larger arcade near the south edge of the Strip on Las Vegas Boulevard near Russel Road. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
National Hardware Show underway Las Vegas
The National Hardware Show kicked off Tuesday at the Las Vegas Convention Center (Mat Luschek / Review-Journal)
Caesars for sale?
Caesars Entertainment Corp. has been swept up in takeover speculation since the company’s share price tumbled last year amid disappointing earnings and concerns over a recession. Amid the decline, hedge funds scooped up shares. Billionaire activist investor Carl Icahn began buying shares of Caesars as early as January. Icahn acquired nearly 18 percent by mid-March. In February Icahn called on the Caesars board to study a sale as a way to boost shareholder value.
Las Vegas home prices
Las Vegas home prices grew fastest among major markets in February for the ninth straight month. But amid affordability concerns, the growth rate has slowed down. Southern Nevada prices in February were up 9.7% from a year earlier, according to the latest S&P CoreLogic Case-Shiller index. The last time Las Vegas' price growth fell below 10% was in September 2017, S&P Dow Jones Indices reported.
Free Parking Coming To Wynn
Free parking will come to the Wynn and Encore resorts on May 1, 2019. (Mat Luschek / Review-Journal)
Founding Venetian employees talk about 20 years at the Strip resort
The Venetian, which opened May 3, 1999, is celebrating 20 years on the Las Vegas Strip. Seven original employees talk about opening the luxury resort and working there for two decades. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Circa aiming for December 2020 opening
The 1.25-million-square-foot property will have 44-stories and 777-rooms. It will also have a separate nine-story, 1,201-space parking garage.
Boxabl official explains the building concept
Boxabl business development manager Galiano Tiramani shows off a room built by his company. (Blake Apgar/Las Vegas Review-Journal)
TI/Mirage Tram reopens
The tram that shuttles guests between TI and Mirage reopened this week after being closed for much of 2018.
Las Vegas Convention Center expansion taking shape
Renderings and actual footage show how the Las Vegas Convention Center is evolving.
Former Starbucks CEO Howard Schultz at Las Vegas convention
Former Starbucks CEO and potential presidential candidate Howard Schultz spoke at the Epicor Insights user conference at Mandalay Bay Convention Center Wednesday, April 17, 2019. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Drew Las Vegas to open in the second quarter of 2022
The 67-story Drew Las Vegas is slated to open in the second quarter of 2022 at the north end of the Las Vegas Strip. (Michael Quine/Las Vegas Review-Journal)
NAB Day 1 (Time Lapse)
NAB kicked off at the Las Vegas Convention Center on Monday, April 8, 2019. (Mat Luschek / Review-Journal)
National Association of Broadcasters Show shows 1mm thick 8K TV with 22.2 channel digital sound
Japan’s NHK Science & Technology Research Laboratories booth featured a 1mm thick 8K TV system used in conjunction with a 22.2 channel digital sound system at the National Association of Broadcasters Show at the Las Vegas Convention Center. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Nevada shoppers react to Smith’s no longer accepting Visa credit cards
On March 1, Smith’s announced that it would no longer be accepting Visa credit cards at any of its 142 supermarkets, including the 45 in Nevada.
Massachusetts Gaming Commission asks how long Wynn executives knew about misconduct
Business reporter Rick Velotta gives an update on the adjudicatory hearing on the suitability of Wynn Resorts to retain its gaming license in Massachusetts.
Henderson app developer part of Startup in Residence
Henderson based developers of the app On Point Barricade are taking part in Startup in Residence, a North America program dedicated to pairing tech companies with governments. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Sam's Town employees and customers talk of their love for the iconic casino
Longtime Sam's Town employees and customers love each other and love their casino. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Las Vegas apartments rents
Las Vegas’ apartment market has accelerated in recent years. Developers are packing the suburbs with projects, landlords are on a buying spree, and tenants have filled buildings.
William Boyd talks about the birth of Sam's Town
On the eve of the 40th anniversary of Sam's Town, William Boyd, executive chairman of Boyd Gaming and son of hotel namesake Sam Boyd, talks about how the casino became one of the first local properties in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
High Roller observation wheel turns five
The world’s tallest observation wheel celebrates it’s fifth year on Sunday, March 31, 2019. (Michael Quine/Las Vegas Review-Journal) @Vegas88s
Escape Room Industry Growing In Las Vegas
Escapology employees discuss the growing escape room industry in the U.S. and Las Vegas. (Bailey Schulz/Las Vegas Review-Journal)
Impact of parking fees on visiting the Las Vegas Strip
There are no data showing a relationship between Strip resort and parking fees and the number of out-of-state visitors to Las Vegas. But there are data showing a relationship between Strip parking fees and the number of local visitors to the the Strip. ‘’As a local, I find myself picking hotels I visit for dinner or entertainment, based on whether they charge for parking or not,”’ said David Perisset, the owner of Exotics Racing. ‘’It is not a matter of money, more of principle.’’ A 2018 survey by the Las Vegas Global Economic Alliance found 36.9 percent of Clark County residents reported avoiding parking at Strip casinos that charge for parking. 29.1 percent reported avoiding using any services from a Strip casino that charges for parking.
MGM's sports betting deals
MGM Resorts International signed a sports betting sponsorship agreement with the NBA in July It was the first professional sports league to have official ties with a legal sports betting house. The deal came just two months after the U.S. Supreme Court overturned a law prohibiting sports betting in most states. In October, MGM became the first gaming company to sign a sports betting partnership with the NHL. In November, MGM became the first gaming company to sign a sports betting partnership with the MLB. Financial terms of Tuesday’s deal and earlier partnerships have not been announced.
Faraday puts Las Vegas land on the market
Nearly two years after Faraday Future bailed on its North Las Vegas auto factory, the company has put its land up for sale. (Michael Quine/Las Vegas Review-Journal)
El Cortez owner Kenny Epstein on running the iconic property
Kenny Epstein, owner of the El Cortez Hotel in downtown Las Vegas, talks about Jackie Gaughan mentorship and answers rumors about bodies in the basement at the mob-era casino. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
LVCVA recommends construction of underground people mover
The Las Vegas Convention and Visitors Authority announced the recommendation for an underground people mover for the convention center. The system would have the potential to expand and connect Downtown and the resort corridor all the way to McCarran. (Michael Quine/ Las Vegas Review-Journal)
THE LATEST
 
Plenty of work remains on Drew Las Vegas

The former Fontainebleau — the blue-tinted tower that has blighted the Strip for a decade — is slated to open as the Drew in the second quarter of 2022.