Not many people were skeptical about how things would work out when the Raiders announced they were moving to Las Vegas. The success of the National Hockey League’s Golden Knights and what many felt was a perfect fit team in the Oakland Raiders made sense on many levels. As the team moves into the second season, it’s apparent that the gambit has worked out well for the city.
Tourism
The tourism industry is a vital part of Southern Nevada’s economy. However, a recent pandemic has affected visitors and the local economy. The COVID-19 virus has slowed down the flow of visitors to the area, limiting spending on conventions, large-scale gatherings, and other activities. Consequently, visitor spending is projected to drop more than half by 2020 compared to the previous year. Tourism-related wages will also be down – by $3.3 billion from 2019 – and total wages will fall by $5.4 billion.
The Las Vegas Convention and Visitors Authority (LVCVA) has released a briefing on tourism spending in the Las Vegas area. The report outlines the economic impact of the Southern Nevada tourism industry, the convention travel segment, and the Las Vegas Convention Center. Overall, the impact of tourism in southern Nevada was $60 billion last year.
Tourism workers in southern Nevada contributed over $10.7 billion in wages in the region, which directly supported over 92,500 local workers. It is a highly organized and unionized industry. The Nellis Air Force Base is the largest employer in the region. In addition to tourism, the area’s economy is also boosted by wholesale, retail, and financial services.
Gambling
Gambling is a big business in Las Vegas and the most significant revenue source for casinos. This includes sports betting, which has always been built around the football season. The city is seeing sports wagering action from when Monday night football odds are set to when the Sunday games are graded.
It’s not just casinos that benefit from this excitement. Local businesses also see an increase in business when major sporting events or other events bring visitors to the city. However, the pandemic has significantly impacted the city, causing many businesses to shut down and leaving residents without jobs. Despite these challenges, the Las Vegas economy is still growing. The city’s housing market is booming, and its entertainment and gambling industries are still vital.
Business Services
Business services are a significant driver of the Las Vegas economy, accounting for nearly two-thirds of the total jobs in the area. Most of these jobs are in tourism-related industries, and the labor force is well organized and unionized. The largest employer in the area is Nellis Air Force Base, but the city also has a strong base in retail trade, wholesale trade, and financial services.
While tourism and leisure are still a big part of the economy, business services have helped diversify the region and lure companies to the city. Before the pandemic, the hospitality and leisure industries dominated the Las Vegas economy. However, after the pandemic, the economy began diversifying into business services and other industries.
When the US pandemic struck, Southern Nevada was one of the hardest hit areas. With the lack of tourism, many residents had to lose their jobs. As a result, 70 percent of Nevada businesses applied for a Paycheck Protection Program loan to help keep their employees.
Real estate
Investors have boosted the Las Vegas real estate market, but they have also had a negative effect. Although most investors are eager to sell the properties they buy for a profit in a few years, some may crowd out potential homebuyers and cause neighborhood problems. However, most investors take care to maintain their properties to sell quickly.
Due to pent-up demand, low-interest rates, and government stimulus, the Las Vegas housing market is still booming. Demand for homes in the Las Vegas real estate market is far greater than supply, and prices are expected to continue rising in the coming years. Las Vegas housing inventory is several months behind demand, so a home may sell for less than expected if the supply is too low.
Investment properties are the main driving force behind high home sales. Most investors pay cash for the properties or put a large down payment. Lenders often require 20 to 30% of the purchase price as a down payment, which has kept home prices high. Moreover, about half of all home purchases were cash transactions this past year.
Entertainment
In addition to driving tourism, Las Vegas’ entertainment industry creates jobs and generates revenue for local businesses. In 2018, visitors spent $3.9 billion on the city’s economy, creating nearly 27,700 jobs. This growth has helped the local economy offset the recession. The city is home to various events, including NASCAR, sports, and music festivals.
The Las Vegas Raiders and the Las Vegas Golden Knights are two of the most recent additions to the city’s economy. The hockey team’s home games draw an average of 18,042 fans, including standing-room fans. In addition, the team’s presence adds more than half a million dollars to the local economy and creates nearly 4300 jobs.
The city has also expanded its arts sector to include cultural events. Several venues in Las Vegas have hosted big-name artists. Artists and performers ranging from rock to country music have performed there. Many of these performers have become household names, and many of these events have benefited local businesses.
Conclusion
Business services, entertainment, and real estate are all significant drivers of the Las Vegas economy. The city has a strong base in these industries and has helped diversify the region. After the pandemic, the economy began to shift away from tourism and towards business services. This trend is expected to continue in the coming years.
