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Las Vegas and COVID-19 Recovery
If I were able to predict the future, I’d be a billionaire. But, if history is any prediction, Las Vegas will recover, as they did from the 2008 recession.
In 2006, the Las Vegas economy was booming, and many felt Las Vegas was recession-proof. But, in January 2008, Las Vegas was struck by the great recession. The unemployment rate skyrocketed to 13%, visitors to Vegas dropped to approximately 36.4 million in 2009, and real estate prices fell 60%.
Also, through my job, I saw Las Vegas bankruptcy filings climb.
Vegas Recovery From 2008 Recession
Las Vegas, though, did rebound and become more robust than ever. One indicator of Vegas’s rebound is that in 2019, Vegas now had approximately 42,500,000 visitors, which was an 8.5% increase in occupancy. Also, housing prices in Vegas nearly doubled from the low in 2012.
One other significant indicator of Las Vegas’s recovery is that from 2011 to 2019, bankruptcy filings dropped over 100%. (From nearly 23,500 in 2011 to a bit less than 10,000 in 2019)
Paradigm Shift Needed
Vegas will likely never be the same after Covid-19. Tourism will NOT stop being Las Vegas’ main economic driving force. Also, after Covid-19 has passed, tourists will want to make up time. Granted, tourists will have less money to spend. However, tourists will still want to visit Vegas and those that can afford to will.
The hospitality industry, though, has a significant drawback in that when the economy is weak, people vacation less. As a result, Las Vegas needs to diversify its economy significantly.
I am hoping, though, post-COVID-19, Vegas will begin to make more of an effort to diversify their economy. I know this is considered blasphemy by many Vegas locals. But, I think Vegas should follow Reno’s diversification efforts. Reno, as with Las Vegas, was also hit the hard by the 2008 recession. Reno recovered; so, much that in 2018, Reno-Sparks was rated number one, in the U.S., for job growth, and in 2018 over 30 high-tech companies moved to Reno. In 2017, Reno was even being compared to a new Silicon Valley.
Many tourists think of Las Vegas as a being a fun place to visit, but not a place that they would want their family to live. This reputation can make it hard to attract educated professionals to move to Las Vegas. This reputation of Vegas only being a fun place to visit is not entirely baseless. For example, bartenders and cocktail waitresses make more than many professionals. As a result, as you can get a high-paying job in Las Vegas without a degree, many Las Vegans do not value a college degree.
Las Vegas’s attitude toward education is backed up by studies, which for four straight years rated Nevada as having the worst schools in the nation. (2015 to 2018.) In 2019, Nevada now has the second-worst schools in the country. Las Vegas also is significantly lacking in access to medical care. For example, a 2019 study has rated Vegas as being the 50th rated state when it comes to medical care access and affordability.
There are plans for UNLV to have a full medical school on the UNLV campus by 2025, which will help with Las Vegas’ doctor shortage.
Additionally, although may disagree, the Golden Knights and soon to be Las Vegas Raiders will make Vegas feel like more of a legitimate “big city,” which can make Vegas more attractive to professionals. Additionally, Experts have also stated that in the last 10-years, Vegas has made great strides toward economic diversification.
Vegas had also made cultural strides. For example, the Smith Center, in Downtown Las Vegas, has brought ballet, Jazz, and first-rate Broadway shows. I.E., Hamilton, is scheduled to appear in September 2020 for a month. And First Friday is a non-gaming, cultural event, that will hopefully eventually return.
What Vegas Needs To Do
To attract professional, skilled, high-tech companies, Las Vegas has to improve its primary and high-school ratings. COVID-19 will result in a significant loss of tax revenue for Las Vegas. However, before the COVID-Pandemic, Las Vegas did not use tax revenue from cannabis sales that were initially intended for education. Las Vegas instead diverted the cannabis tax proceeds to address homelessness.
I am not saying that the cannabis tax revenue will make Las Vegas schools suddenly the “Best in the Nation.” Also, I am not saying that homelessness isn’t a problem. What I am saying is that this diversion of money seems to indicate that Las Vegas does not place education as a high priority. Therefore, the first step to help increase Nevada’s school ratings is to use the cannabis tax ratings, for public education and not other issues.
Consequently, unless Las Vegas gets its public schools up to at least respectable ratings, they will have a hard time attracting and keeping high-tech companies, which will result in Las Vegas again being greatly affected in the upcoming years, and also when another recession occurs.