After two years of being on life support, the Las Vegas economy is showing a slight pulse, a faint heartbeat, though it’s still afflicted with serious ailments, Applied Analysis principal Jeremy Aguero said today at Preview Las Vegas 2010.
Most worrisome is "jobophilia," or the massive loss of jobs, the economic analyst told more than 2,000 business professionals who attended the annual presentation by the Las Vegas Chamber of Commerce at Cox Pavilion.
"Everyone knows jobs are the lifeblood of our economy," Aguero said. "We’ve been diagnosed with chronic Type-A jobophelia and the bleeding continues today."
Las Vegas showed substantial employment growth of 20,000 to 40,000 jobs a year throughout most of the 1990s and into the first decade of the new century, adding 24,600 jobs as recently as 2006. The number shrunk to 8,400 in 2007 before turning negative in 2008-09, when some 100,000 jobs were lost.
The economy needs to add 124,000 jobs to bring the unemployment rate back to 5 percent or 6 percent, Aguero said.
Those jobs aren’t going to come from the casino industry this time. There won’t be any new major hotel or casino development on the Strip for 10 years following December’s opening of CityCenter, MGM Mirage Chairman and Chief Executive Officer Jim Murren said at Preview.
Some of the emerging employment sectors that will not only bring new jobs to Las Vegas but diversify the economy include health care and renewable energy, Aguero said.
"We’re going to have to make an investment in renewable energy," he said. "We’ve got some momentum going. We get 300-plus days of sunshine, which makes us as competitive as anywhere in the United States."
Las Vegas is also battling obesity morbidium per real estatus, or extreme overbuilding in real estate, Aguero said. The city has an estimated 40,000 to 50,000 excess housing units, 23 percent office vacancy, 13 percent retail vacancy and 10 percent office vacancy.
"We’re not accustomed to that," he said. "Taking down this inventory is going to take time. We’re overweight and this unique form of obesity is somewhat viral."
Aguero named other conditions affecting economic health such as immodicus debtum coronary symptom, or blockage caused by massive debt, and spendfluenza, which is caused by people spending money they don’t have.
"The goal is to get the economy out of the emergency room and get the economy into recovery," he said.
Murren was fairly upbeat after what he described as a "near-death experience" with CityCenter.
"You probably heard last year we were within hours of shutting down CityCenter. We got plenty of advice. Shut it down, cut off the arm to save the MGM body, you can’t make it, your problems are too big. The truth is, we were minutes away," he said.
"We kept fighting to the last minute because we knew laying off 10,000 construction workers would have profoundly damaged our state for years to come. It wasn’t easy, but we knew it was the right thing to do for our company, for our employees and for our community," Murren said.
That near-death experience gave MGM Mirage a "new lease on corporate life," he said. Hotel occupancy rates rose for the first time in two years, visitor volume has increased for several months and gaming revenue is up for the company, he said.
Rossi Ralenkotter, president and chief executive officer of the Las Vegas Convention and Visitors Authority, said he watches three indicators for Las Vegas: consumer confidence, employment and travel intentions.
He pointed to some positive signs such as the 6.6 percent increase in attendance at the Consumer Electronics Show, the largest convention in Las Vegas, as well as increased visitor volume in November and December and more automobile traffic from Southern California.
"It doesn’t signal the end of the recession, but those are things I feel good about," Ralenkotter said.
He credited MGM Mirage and M Resort for showing "unbelievable confidence" in Las Vegas, building in the face of the recession.
Tourism is a $25 billion economy for Las Vegas and 2009 was probably the most difficult economic challenge anyone has seen, he said. Convention travel came under attack from politicians who saw Las Vegas and other destinations as a junket.
"I’ve never seen that before," Ralenkotter said. "We had to go to Capitol Hill and fight because we were a target."
Las Vegas hosts about 20,000 conventions and meetings, employing some 45,000 people and generating nearly $7 billion in revenue, he said.
Contact reporter Hubble Smith at firstname.lastname@example.org or 702-383-0491.