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In Las Vegas, good news always trails bad press
Sure, the wheels have come off our big boom, but here’s why there’s hope
Sunday, April 19, 2009 | 2 a.m.
CLIPS COURTESY OF APPLIED ANALYSIS; COLLAGE BY LAS VEGAS SUN
From top: Chicago Tribune, 1982; Life magazine, 1955; The Ogden Standard Examiner, 1931; The New York Times, 2000. All reported bad news about Las Vegas, but the city apparently was not paying attention.
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If you listen carefully, you can hear the clicking keyboard sound of Las Vegas’ obituary being written.
National media organizations in recent weeks have been exploring stories on the death of Las Vegas. A couple of top-shelf newspapers, a magazine or two and one of the networks have all been asking gloomy questions.
For Las Vegas, however, this is actually wonderful news. If the history of Las Vegas shows anything, it is that when the nation’s media sound the death knell for this city, good times are on the way. It’s been happening as far back as the 1940s and ’50s.
Each obituary became a birth notice.
“Just like when your cabdrivers are giving you stock market tips, you know the market is on the way down, when you see the national media pronouncing the end of a historically vital city, it’s a good time to bet on it,” gaming analyst Bill Lerner said.
Putting his money where his mouth is, Lerner left Deutsch Bank last week to launch his own Las Vegas-based gaming analysis firm.
He’s betting Las Vegas is going to come back and he sees all the bad press as a sign to buy in now.
(Admittedly, Lerner is also the guy who, in January of 2008, thought Las Vegas Sands stock would rise to $120 a share — it currently trades for just over $5.)
And if the national media are not working on a Death of Vegas story, maybe they should be.
Nevada is facing a budget shortfall of $2.8 billion, the stratospheric home foreclosure rate just shot into the mesosphere, casino projects have been abandoned or put on hold, gaming companies are facing bankruptcy reorganization, the number of tourists coming here is off and they’re spending less than ever and so on. We’re all used to hearing it. Put it all together and our future sounds bleak as Death Valley in July.
Alan Feldman is MGM Mirage’s senior vice president of public affairs and one of the first people every national reporter calls. He says in recent weeks he’s heard from Time magazine, Vanity Fair, Nightline and The New York Times. He won’t disclose what stories they’re working on but says writers — not the usual cast of business reporters — have had lots of gloomy questions, because, quite frankly, the news out of Las Vegas is pretty gloomy right now.
But the pessimism of a doomsayer can be as off the mark as the optimism of, just to pick an example, someone advising in 2006 to buy real estate before you are forever priced out of the market, Feldman said.
“I’ve been here almost 20 years and this is not even remotely the first time this has happened,” Feldman said. “They would all like to write Las Vegas’ obituary.”
As if they haven’t tried in the past:
• “Both Las Vegas and Reno are ‘flops’ as Monte Carlos” — The New York Times, 1931
• “Snake Eyes in Las Vegas” — Time, 1955
• “Economy deals Vegas a losing hand” — Chicago Tribune, 1982
And yet, somehow, Las Vegas escaped the reaper’s scythe to become a metropolitan area of almost 2 million people.
So, in times of woe, it might help to look back on our past.
“Las Vegas was written off almost from the beginning. It was dismissed as this dusty little town,” said Mike Green, a history professor at the College of Southern Nevada.
In the 1920s, we were a railroad town. Then the rail yards and repair shops left town. We should have been doomed, but then the highway came through, Hoover Dam construction started, we legalized gambling and quickie divorces, and we were fine. Even during the Great Depression, we did better than most. Then, when the dam was finished, we were supposed to be finished, too. But we weren’t, because of the money World War II projects brought to us and our greatest feeder market, Southern California.
In the mid-’50s, we overbuilt and a couple of casinos had to close, but we bounced back by attracting new business travelers. In the ’70s and early ’80s, Atlantic City and a gloomy national economy were supposed to be our undoing. But in the ’90s, we thrived by re-attracting middle-income tourists, and for most of the last decade we thrived on wealthy travelers, people who could pay for gourmet meals and $300 bottle service. And Las Vegas will come back when the economy recovers and we find some new market segment to attract to Vegas, said David Schwartz, director of UNLV’s Center for Gaming Research.
So we’ll be all right this time, too, right professors?
“One of the problems with saying they were wrong previous times and now they’re wrong again is, well, this isn’t like previous times,” Green cautioned.
Green said he has no doubt Las Vegas’ tourism economy will recover, but he wonders how badly off Las Vegas’ people will be when it finally happens.
Professor Schwartz?
“Both extremes — the extremely optimistic and the extremely pessimistic — are generally wrong,” Schwartz said.
And Schwartz said he thinks the pessimists will be wrong this time, but ...
“On the other hand, one of these days, the doomsayers are going to be right. If you had predicted the fall of the Roman Empire, you would have been wrong for a long time but eventually you would have been right.”
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this dusty little town mr. green didn't have idiots like harrah's, that take a great property like the rio and run it into the ground.
They just had the railroad industry that was run into the ground.
What a load of bullocks. Las Vegas has had a lot of jealously pointed it's way from other cities and it's writers. This town is far from finished. Nothing short of a nuclear war will bury this city.
Agree with Lenny_V. Vegas is far from finished. I also believe we are in an envious position that most cities are not and that is when the economy does start getting back on track, people will be coming back to Vegas like before. AND hopefully the casino honchos realize that they're going to have to bend a little..no a LOT, and keep room prices reasonably priced.....like they are currently doing to get people to come here. It's going to take time, but it's going to take time for the whole country to get back on track but we will see it first right here in Las Vegas.
let's see...the greenspuns have their hands in casinos...and a vegas travel guide...and a vegas website...so, of COURSE it's in their best interest to say "everything's fine".
this town / country is very different from that last 3 or 4 boom-bust cycles. there's no room on the strip anymore to create new hotels that are going to give people a reason to come here.
there is an entire group of baby boomers that were "THIS CLOSE" to retiring that now have to work another 4 years. they aren't going to blow $800 - $900 to come here.
Formervegas76, you certainly are entitled to your opinion, and if the subject of the article had been what you mention, I might have addressed other issues. But if I may add two things:
1. It did have politicians and businesspeople who decided that if you weren't white, you should be across the railroad tracks.
2. As I said elsewhere in the article, this era is different.
Thanks for commenting.
Of course Vegas will come back but are you willing to wait 10 years?
Check this out. -> http://www.slate.com/id/2216238/
Animated unemployemnt graph
Las Vegas is the Madonna of cities. Just when you think you've seen the last of her, she gets a new look, a new sound, and comes back bigger and stronger.
In my opinion Las Vegas does need to face that the days of the pseudo rich/high roller are probably gone. Some big adjustment will need to be made. On the other hand Las Vegas always makes a nice quick easy "escape" vacation for a lot of the people in this country. People are going to want to take the fun long weekend getaways in this time of uncertainty. When people have fear of job security they don't want to spend too much time away from it. In fear that somehow the company/boss will find that they really didn't miss them or need them anymore. Remember that the county has a whole, is still humming along, just not like it was. People do need vacations. If Vegas can offer a good bang for the buck then it will see plenty of growth in this niche. Another positive to mention is that China is already starting to turn around its economy. I think most of us know how much the wealthy Chinese like to gamble and there are a lot of them. Even if some just go to Macau these days, it is still a plus on quite a few of the LV casinos bottom line.
As far as the local economy and housing goes. Let's not forget what California will do for Las Vegas. LV has always been a bit of suburb of Southern California, but without the state income tax. Now that California is raising taxes again. With 10.5% sliced out of their income each year, not to mention all the run of the mill taxes in California are higher. Nevada having zero income tax combined with the now affordability of the houses here in LV is a pretty big plus. LV is now set up to take more Californians and their businesses under its wing than ever before. With communication technology the way it is today, it's not that hard for some people to work from Las Vegas and still keep a foot in California. I've been doing it for 10 years. I think it's in the not too distant future this new wave of migration will happen.
"Viva Las Vegas"
I have been making a few trips to Macau, Germany, France, and Monte Carlo, but I think it is time to come back home to Vegas. I've traveled around the world and in my opinion nothing beats "Vegas-Baby". I am not just proud of Vegas, but it is an icon that truley represents all that it implies.
"Viva Las Vegas"
The Las Vegas brand is only found in Nevada, where for a fleeting moment anyone can find themselves surprised and full of joy, only matched by a childs exhileration of having cake and ice cream without limits for the first time.
"Viva Las Vegas"
On any given day a celebrity can be found mingling as a regular person, or a regular person vaulted to celebrity status for beating the "One Arm Bandit".
"Viva Las Vegas"
we also didn't have casinos in almost everyones backyards. i live in central n.y. and there are 3 casinos within 60 miles. every trip there by myself and other used to be frequent vegas visitors, takes away from visitors to vegas. i think most of us gamblers out there would like to come to vegas more, but corporations don't care for us moderate players anymore. we can play at turning stone[indian casino] for about a couple of hours and have enough comps for a meal. play a week at stations and we're lucky to have $30 in comps at gift shop. i still have many friends employed in vegas that i worked with and my hope is that these mega giants get the message someday.
**"On the other hand, one of these days, the doomsayers are going to be right. If you had predicted the fall of the Roman Empire, you would have been wrong for a long time but eventually you would have been right."**
Let me guess. This guy works across from the Venetian... ;^) --- found a cool site; Balkingpoints ; incredible satellite view of earth
All this talk of the MSM beating up on Vegas is B.S.
Cities in states like Michigan, Florida, New Jersey, California have all been getting their fair share of attention from media networks. The next few years/decade is going to be very tough for a lot of people. Unemployment is just getting going and Shadow Stats has the national average at %17.
Commercial real-estate is beginning to implode --sure to make the housing bubble look like a walk in the park.
I'm so astounded at the number of people who give credence to the MSM FOX/CNN/MSNBC, when those clowns, ALL OF THEM, have been behind the eight ball on this entire cluster-f#@%!
Remember "It's contained", or "housings beginning to recover" back in '07
What a joke.
people need to feel like they have a chance to win, if they are coming back to vegas. it's tough traveling 2,000 miles to have your money evaporate at the slots the first day you arrive. we are not idiots, and vegas is still a great place, but loosen up the slots like a few years ago, and keep them that way, and you'll see mor players returning..
i hope the locals understand how we feel, because there are many choices to gamble at, and they want our business too. SO.... give us a chance to win again, and i'll take vegas anyday!!!
i agree kramer, slots need to be loosen up. used to see stations full of little old gals, like a tomb in there now. how about giving points to people that play horses, i spend about 1/3 of my stay in race book and never have anything to show for it. vegas is still in my heart even though i'm many miles away, hope economy recovers and ditto heads in management head some of our calls.
There will be no rebirth. The difference between now and before is that players in California and Arizona (and almost every other state) have tons of casinos in their own backyards. There is no need to come to vegas.
Mr. Lerner shouldn't have quit his day job :(
Silveracura
It's all about the water. Mother nature and the environazis will do what the rest of the world couldn't, kill Las Vegas. It has been said that if they tried to build Hoover Dam today the environmental impact statement alone would take 10 to 20 years. If the nazis had their way they would destroy every dam, road, power pole, power plant, etc., in the country no matter the cost to human life. Back to the caves.
Keep in mind, Topher96, that all those Californians you're counting on to move into Nevada to take advantage of the tax situation will then become VOTERS in Nevada. Don't forget it was the way THEY voted in California to strip any real power from the very officials THEY elected that created a major portion of the deficits they're now facing. Are you sure having them do the same in Nevada is a GOOD thing?
every time I think about going to vegas I just go to an indian casio becuase the last 3 times i went to vegas I got raped 700 dollars in 3 hours...not ever a reach around to make me think i was gonna win a little