Lower pump prices could lift tourism

Monday, June 25, 2001 | 11:02 a.m.

Although high petroleum prices this spring had little effect on visitor volume and gaming revenue in Las Vegas, a recent sharp drop in gasoline prices in California should help boost Southern Nevada summer tourism, a local tourism official said today.

"Lower gasoline prices are good news, but we really didn't see a huge impact when prices spiked up," Las Vegas Convention and Visitors Authority spokesman Rob Powers said about a gasoline industry survey that shows pump prices dropping nearly a dime a gallon nationwide.

"Many of our visitors from California simply added another $15 for gasoline to their travel budgets, but didn't cancel their trips to Las Vegas just because of the higher cost of fuel."

LVCVA statistics through April show that auto traffic along Interstate 15 from California was down 2 percent, while gaming revenues were up 0.6 percent and visitor volume was up 1 percent over the booming record year of 2000.

Such numbers are "statistically negligible," Powers said, because they are so small and cannot be linked directly to gasoline prices.

The average price of gasoline Friday, including all grades and taxes, was $1.63, down 9.46 cents per gallon since June 8, according to the Lundberg Survey of 8,000 stations nationwide.

The Nevada Gasoline Retailers Association says the significant drop in prices from the high $1.70s for self-serve unleaded fuel in Las Vegas and elsewhere has more to do with politics than the market.

"I think this demonstrates that the increase of the last couple of months was artificial, as we have said all along," the group's spokesman, Jack Greco, said this morning.

Greco said the lower pump prices could help tourism locally because, as prices drop closer to what he believes is the true market level, tourists could perceive it as a huge price break and therefore take summer car trips they initially considered canceling when prices were artificially high.

Analyst Trilby Lundberg, noting that prices have dropped 13 cents this month alone, argues that prices are falling in part because gasoline supplies and refining capacity are rising. And, he said, the market suggests further cuts are a "strong possibility."

The national weighted average price of gasoline, including taxes, at self-serve pumps Friday was about $1.59 a gallon for regular unleaded, $1.69 for midgrade and $1.78 for premium. At full-serve pumps, the average was $1.98 for regular unleaded, $2.06 for midgrade and about $2.14 for premium.

Prices fell most sharply in the Midwest -- by as much as 21 cents per gallon, Lundberg said.

The Associated Press

contributed to this report.