Vegas is back baby!
Whether its the prospect of major sports leagues making the oasis in the desert their home or new hotels and convention centers coming online in the coming years, Las Vegas is having a post-pandemic moment in the sun.
The Las Vegas Convention and Visitors Authority is projecting the spending of $4.512 billion in 29 new projects that are expected to add 7,602 hotel rooms and 791,000 square feet of convention space in Southern Nevada by the end of 2024.
Vegas will have more than 158,000 hotel rooms by the close of 2024.
The LVCVA expects the city to add 766 additional rooms this spring with the reopening of the Palms resort and casino under the management of new owners, the San Manuel Band of Mission Indians.
Major League Baseball has been flirting with the city in an attempt to squeeze a new stadium deal out of the Oakland Athletics. The A's have been in active negotiations with multiple sites on or adjacent to The Las Vegas Strip.
And now there is a report that the NBA could be interested in granting the city an expansion team in the near future.
The Strip is seeing recovery with stalwarts like Wynn Resorts (WYNN), MGM (MGM) and Caesars (CZR) all expecting to decrease losses from the previous year. MGM is expected to turn a profit this fiscal year.
But there are macroeconomic storm clouds gathering on the horizon in the desert.
Gas Prices Could Eat Into Vegas Recovery
Russia's military invasion of Ukraine might have economic and geopolitical fallout for decades to come.
In the short-term, rising energy prices are the main concern for a U.S. economy that is only now just emerging from the Covid-19 pandemic depression.
Las Vegas stands to lose immensely if rising fuel prices force Americans to change their travel habits and plans, according to Stephen M. Miller, director of research at UNLV's Center for Business and Economic Research.
In an interview with Casino.org, Miller stated that Las Vegas' recovery is in a precarious position.
“The number of drive-in visitors should fall almost immediately, and continue at a lower level until some relief occurs with additional crude oil supply. This will be a setback for the recovery in Southern Nevada," Miller said.
“But sometimes people forget jet fuel is also derived from oil. So higher oil prices are making it more expensive for people to reach Vegas, however they travel."
Las Vegas' employment situation has slowly been getting back to normal since the darkest days of the pandemic. The town lost 172,000 jobs in leisure and hospitality between February 2020 and May 2020, according to Miller. The city has recovered 110,000 (64%) of those jobs.
But rising gas prices could hamper even that recovery as employees may have a more costly time traveling to work, Miller said.
Rising Gas Prices Are Bigger Than Just Las Vegas
Gas prices were rising before Russia invaded Ukraine as OPEC and other oil producers like the U.S. cut supply.
But now the war has exacerbated those supply issues with Russian oil now being shunned by many Western European countries who have begun concocting legislation that will make them less dependent on Russian oil.
However, Russia produces about 7 million barrels of oil a day, and no matter how much the West wants to exclude Russia, there is currently no way to replace that much production, according to some experts.
