Las Vegas Sun

March 28, 2024

Firm predicts tourism boost will help businesses near Strip; weakness elsewhere

Strip

Justin M. Bowen / File photo

A research firm on Tuesday said businesses near the Las Vegas Strip will see improvements in 2011, but the economic recovery will be slower in other parts of the valley.

Retail sales in Las Vegas will increase more than 8 percent in 2011 as an increase in tourism will benefit retail outlets closest to the Strip, according to a forecast released by a California research firm.

Marcus & Millichap ranked Las Vegas No. 40 in the nation in 2011 in terms of retail markets, up from its 42nd ranking in 2010.

The firm is bullish on the national economy increasing visitors and says healthier gaming revenues will translate into leisure and hospitality job creation.

Local companies, especially casinos, will expand their payrolls for the first time since 2007, the firm predicted. By the end of 2011, employers will add 14,000 positions, a 1.8 percent increase, it said.

“As local companies expand payrolls, consumer spending will pick up and slow the pace of store closures,” said Hessam Nadji, the managing director of research for Marcus & Millichap.

During the early stages of recovery, the increase in tourism will primarily benefit retail operations near the Strip. The biggest benefactors will be those retail stores close to the Cosmopolitan, which will outperform the rest of the market, the firm said. That would benefit the Miracle Mile Shops across the Strip.

Despite the strength near the Strip, the firm said other parts of the valley, namely the northwest and southwest, will recover more slowly with their vacancy rates of 10 percent and 16 percent, respectively.

Overall, vacancy rates will increase from 11.4 percent to 11.8 percent by the end of the year. It was 10.7 percent at the end of 2009, the firm said.

Retail building owners will hold the line on concessions but rents requested by them will drop nearly 1 percent, the firm predicts. Other than the completion of Tivoli Village near Summerlin in March, retail construction will remain shelved in 2011, the firm said.

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