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September 23, 2014

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Visitation improves, but gaming revenue plummets in February

The 8 percent decline in visitation to Las Vegas compared with last year was shallower in February than January, but tourism experts aren’t ready to call it a trend since Strip gaming revenue for the month was worse than the statewide average.

The Las Vegas Convention and Visitors Authority reported 2.9 million visitors to Southern Nevada for the month. Despite three fewer days in the month and January having the New Year’s holiday and the huge annual Consumer Electronics Show, more people came to Las Vegas in February than January.

The state Gaming Control Board reported February gaming revenue of $830.9 million, down 18.1 percent from the previous year. The Strip decline was even steeper with revenue of $427.4 million, off 23.4 percent from the previous year.

The Strip decline was among the worst of the state’s 16 geographic markets with only Reno, South Lake Tahoe and North Lake Tahoe having bigger percentage drops. Weather may have contributed to the steeper downturn in Northern Nevada.

The only market with a significant increase was North Las Vegas, where Station Casinos’ Aliante Station opened in November and contributed to a 21.9 percent increase in revenue to $26.2 million. The Boulder strip, which saw the opening of the Eastside Cannery in August, also saw a marginal increase in revenue over last year.

For the eight months since the beginning of the 2009 fiscal year July 1, gaming revenue is off 14.5 percent to $7.3 billion.

A big drop in convention attendance fueled the lower visitor volume. The city played host to 1,712 meetings, trade shows and conventions, down 15.7 percent from February 2008, and attendance at those shows was 583,168, down 34.8 percent from last year.

The lower convention attendance resulted in a big hit in midweek occupancy figures. Midweek occupancy fell 7.1 percentage points to 80.5 percent. By comparison, weekend occupancy was down only 1.8 percentage points to 91.1 percent.

Motel occupancy took the bigger hit with the percentage of motel rooms off 11.1 points to 54.8 percent compared with hotel rooms down 5.2 points to 87.5 percent. Overall, occupancy was down 5.5 points to 83.9 percent.

The total room nights occupied was off only 4.8 percent, however, because Las Vegas’ room inventory increased 3.9 percent to 140,729. More capacity is expected by the end of the year with the opening of MGM Mirage’s CityCenter and Fontainebleau on the north end of the Strip.

Tourism officials said a greater percentage of Las Vegas visitors are coming from drive markets, with the average daily auto traffic on all major highways into the city down just 1.9 percent to 75,672 average daily trips. The greatest percentage of visitors in February came from Southern California with traffic on Interstate 15 at the Nevada-California border at 34,145 average trips per day, down just 0.1 percent from the previous year.

For the first two months of 2009, traffic on I-15 from California is up from the previous year by 1.2 percent.

Laughlin and Mesquite continued to be worse than Las Vegas with visitor volume down 17.2 percent to 206,563 in Laughlin in February and down 31.9 percent to 94,005 in Mesquite.

Occupancy rates fell 6.1 percentage points to 69 percent in Laughlin. In Mesquite, the occupancy rate was off only 3 percentage points to 88.4 percent, but the closure of the Oasis’ rooms resulted in a 27.4 percent capacity cut in the community.

Average daily room rates fell in both markets with Laughlin’s rates down 3.4 percent to $37.94 and Mesquite’s down 13.3 percent to $59.38.

Despite visitor volume, room inventory, occupancy, average daily room rates and average daily auto traffic being down, Mesquite managed to have a 0.7 percent increase in gross gaming revenue to $11.2 million. But Laughlin’s gaming revenue was down 19.2 percent to $45.3 million for the month.

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