Somewhere out in the dark and empty desert around midnight on New Year’s Eve, Las Vegas Convention and Visitors Authority officials oversaw the spectacular implosion of a 2020 sign.
Maybe they were channeling the scene from the 1995 film, “Casino.” Gangster Nicky Santoro described Las Vegas as having “a lot of holes in the desert, and a lot of problems are buried in those holes.”
Via a live stream broadcast on New Year’s Eve, the implosion signaled the end of 2020 – the destination’s most catastrophic year on record. Maybe they buried the remnants in a hole.
LVCVA CEO Steve Hill said the implosion allowed Vegas fans “to share our enthusiasm and excitement as we look toward a brighter 2021.”
While the “Terrible, Horrible, No Good, Very Bad Year” has ended, its effects on the gaming and tourism destination from the COVID-19 pandemic will linger throughout much of 2021. Some analysts have predicted it will be 2023 – or even 2024 – before Las Vegas returns to full health.
The final numbers for 2020 aren’t in, but tourism counts could be lowest in more than three decades, far below the apex of 42.9 million visitors in 2016. Gaming revenues are teetering toward a 50% decline compared with 2019 when the Strip topped $6.58 billion.
December numbers will be putrid. COVID-19 protocols forced the National Finals Rodeo to move to Dallas. New Year’s Eve attendance will be far below normal totals after Las Vegas canceled its public events, including the annual midnight fireworks display atop Strip resorts.
Nevada casinos are operating under space limitations that restrict gaming floors to 25% capacity through at least January 15.
Las Vegas Tells 2020 to “Kiss Off” with a virtual event featuring an exploding 2020 sign, a fireworks display, and the reveal of a 2021 (Photo by Ethan Miller/Getty Images for LVCVA)
Truist Securities gaming analyst Barry Jonas said the investment community has already baked 2020’s disastrous year into the results from Strip resort operators.
“With rising COVID cases (and) restrictions, we expect December to also come in soft,” Jonas said. “However, we believe investors are more focused on improving leisure dynamics in 2021 from the COVID vaccine.”
On Wednesday, Nevada Gov. Steve Sisolak said 25,636 doses of the COVID-19 vaccine have been administered to front-line health-care workers and long-term-care patients and staff. Under the state’s tiered rollout, next in line are residents aged 75 and older. The timeline is still evolving, as it is in other states. For now, the vaccine will have little impact on tourism.
Improvements in two areas – airline travel and a return of conventions, meetings, and tradeshows – will revive Las Vegas resorts. Many Strip properties curtailed business or closed operations altogether midweek when casinos resemble ghost towns.
Airline traffic at McCarran International Airport is down 56.6% for the year. International travel is down 78.5%. The airport posted a single-year-record of 51.5 million passengers in 2019, so McCarran is expecting to report its smallest passenger count since the early 1990s.
The LVCVA planned to unveil its $980 million expansion of the Las Vegas Convention Center this month with the Consumer Electronics Show – annually the city’s largest tradeshow. But the conference was canceled and will be a virtual event.
Other large gatherings have been put on hold.
Kevin Bagger, the LVCVA’s vice president of research, said a few tradeshows are considering dates in the first half of 2021. But the current schedule shows World of Concrete on the books for June 8-10. He cautioned the schedule is fluid.
In 2019, Las Vegas attracted a record 6.65 million convention attendees. Through November 2020, there has been a 72.6% drop in convention attendance fueled by eight straight months of zero convention delegates. December is expected to mark the ninth month.
Is there good news on the horizon?
Macquarie Securities gaming analyst Chad Beynon said most near-term metrics were “decelerating.” Given the colder months and normal seasonal weakness, he expects 2020’s fourth quarter and 2021’s first quarter to be “as bad or worse” as previous quarters.
Strip casino operators are working on “safe solutions” for large gatherings. But he expressed caution.
Beynon said the “looks/books” into Las Vegas by potential visitors show 15% growth over the next 60 to 90 days. It’s not a great number, but better than the range over the past few months.
“We view this as positive for visitation trends into the second half of 2021,” Beynon wrote.
For now, 2021 looks no different than 2020 for Las Vegas.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
