LAS VEGAS —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
That’s the multibillion-dollar question some restaurateurs and casino and resort owners are asking as a weak national economy, aggravated by soaring food and gasoline prices, the credit squeeze, and layoffs of blue- and white-collar workers nationwide, is stacking the deck against a town that has grown used to a much stronger hand. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
While traffic is nowhere near as shriveled as it was in the two to three months following the Sept.11, 2001, terrorist attacks, the economic health of America’s favorite party and entertainment town is nonetheless under siege, just in time for the start of the summer vacation season. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
But Las Vegas industry experts say the summer is historically the worst part of the year for Sin City’s conventioneers and tourists who fear the 100-plus-degree daily average temperatures. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
Still, many Las Vegas veterans remain optimistic that the city’s good fortunes ultimately will continue. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
“We’ve been flying high for so long, I just think this is just a natural correction, like one of those things that happens on Wall Street from time to time,” said Elizabeth Blau, who leads the Las Vegas-based Blau and Associates food-service consulting firm. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
Others are also nonplussed. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
“The media can say what they want about how poorly Las Vegas is doing and how high gasoline prices will be our undoing, but I tell you, I’d rather operate a restaurant in Nevada than Michigan,” said Paul Hartgen, chief executive and president of the Nevada Restaurant Association. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
“People are still coming and…spending money, and so far, knock on wood, we’re holding our own,” said Russell Jones, vice president of restaurant operations for the Light Group, an 11-unit multiconcept restaurant and nightclub operator that just opened Brand, a steakhouse tailored for younger high rollers in the Monte Carlo. “It’s true, the convention business is a little soft, and you don’t see the big 20- and 30-person business parties, but we’re still getting smaller groups, and the check averages appear the same.” —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
According to the Las Vegas Convention and Visitors Authority, for the 12 months ended in March the number of conventions held in town was down 16 percent, to 2,269 events. The number of hotel rooms used by convention or business travelers also dropped 16 percent, to 1.2 million rooms. The number of people who deplaned at McCarran International Airport was down 2 percent, to 4.1 million, and the economic impact in dollars from the slowing rate of convention attendance is down nearly 9 percent, to $850 million. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
Erika Pope, a spokeswoman for the LVCVA, said the numbers from March show that “Las Vegas is not recession-proof.” —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
“I think these indicators show that a slowing national economy does not make Las Vegas immune to a slump and that certain sectors could feel it in time,” she said. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
Gaming revenues in the Las Vegas metropolitan area were $655.1 million for the month of March, down 2.5 percent from the same year-earlier month. Gaming revenues for the first three months of 2008 were $2 billion, down 3.4 percent from the first quarter of 2007. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
Casino magnate Steve Wynn told analysts a few weeks ago that his Wynn Las Vegas—which cost $2.7 billion to build in 2005 and is one of the crown jewels in his string of dazzling casino resorts, which includes the Bellagio—had posted a 20-percent decline in income in the first quarter. Nevertheless, unlike many of his rivals, Wynn said he refuses to lay off any staffers. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
But for some Las Vegas properties, the drops in traffic and revenue have put livelihoods at risk. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
Since February at least 600 hotel and casino employees have been dismissed by major properties, among them the MGM Mirage’s Circus Circus, MGM Mirage, Harrah’s Entertainment and Station Casinos. To that number of layoffs, according to the Las Vegas Review-Journal, could be added “hundreds” more layoffs from lesser-known, smaller operators. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
The Nevada Department of Employment Training and Rehabilitation reported in March that Las Vegas’s unemployment rate rose to 5.6 percent, higher than the national unemployment rate of 5.1 percent. A year ago, when hospitality employers were complaining about the region’s tight job market, the city’s unemployment rate was 3.8 percent. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
There is good news, however. The number of rooms occupied by tourists actually grew year-over-year in March to 2.6 million room occupancies, up 9 percent from the year earlier, the LVCVA reported. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
But other developments portend trouble ahead. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
ATA Airlines of Indianapolis and Aloha Airlines of Honolulu, both of which specialized in flying high rollers to Las Vegas from Hawaii, went belly-up within weeks of each other in April. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
Some big-ticket casino development projects are facing financing and credit problems that may delay, if not scuttle, their debuts. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
Meanwhile, other billion-dollar developments, including the eagerly awaited Aria, MGM’s massive City Center Project and the Cosmopolitan, a project under construction for four years and expected to be fully operational in 2009, have either opened or are still on track. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
More importantly, the biggest and most respected culinary stars in the restaurant industry still are laying heavy bets on Las Vegas. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
Mario Batali, Tom Colicchio, David Burke, Thomas Keller and many more continue to expand their presence here along with established restaurant operating groups from other cities like the Brennan family of New Orleans, the B.R. Guest Restaurant Group of New York and Ebrands Restaurant Group of Tampa, Fla. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
One of the veteran players in the market, Wolfgang Puck, will oversee an exclusive catering contract at the $3 billion, 5,000-room Cosmopolitan. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
The concentration of so many celebrity chefs and prominent restaurant operating groups in Las Vegas has made the place one of the fine-dining capitals of the world, and that is one of the reasons why Blau is optimistic that her peers may ride out the slump with little pain. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
“We’re talking about a market where the average for a high-end restaurant is $10 million a year, but many are doing $40 million or more at one site,” she said. “If this was any other market, we’d say a restaurant that does $5 [million] to $10 million a year is great, it’s a standout. In Vegas, $10 million is average. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
“Go by Mario Batali’s new place, Carnevino. The check average is $200, and they are packed every night. So what slowdown are we really talking about?” —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
Manhattan-based celebrity chef Tom Colicchio of “Top Chef” television fame, whose upscale steakhouse Craftsteak and gourmet-sandwich concept ‘wichcraft are in the MGM Grand, is more worried about food costs than traffic. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
Colicchio said that he had his best April ever in the four and a half years he has been in Las Vegas. He thinks his strong showing was related to steady regulars who come to Craftsteak every time they come to town, sometimes as many as 20 times a year. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
Hartgen, who will soon leave Nevada to head the Maryland Restaurant Association, said people are misinterpreting the impact of high gasoline prices in Southern California, where 30 percent of Las Vegas’s most dedicated fans live, on Las Vegas’ fortunes. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
Noting that the distance between Los Angeles and Las Vegas is 250-odd miles, that most cars get 25 miles to the gallon and that it takes four to four and a half hours to cover the distance at 60 miles an hour, Hartgen estimated that even if the driver paid $4.50 a gallon to fill up their tank—just $1 more per gallon than a year ago—they are only paying $20 to $25 more than a year ago to drive one way. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
“Would $20 more be the tipping point where a person says they can’t afford to drive to Las Vegas?” Hargen asked. “I don’t think so. —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?
“They could just as easily cut out the $18 organic margarita at Mandalay Bay and cover the difference.” —This capital of glitz, glamour, gambling and gourmet dining winks at consumers with a suggestive marketing tag noting that what happens here stays here. But what happens if nothing happens?