Sorry STR, but the best way to gauge the health of a city’s hospitality industry is to talk to cab drivers. I’ve been in Las Vegas for nearly a week and have been in a number of cabs and limos (thanks Vantage Hospitality), and on each ride I heard from drivers who said the city’s tourism business is back to prosperity, or close to it.
And, indeed the numbers back up this grassroots, albeit unscientific analysis. The city is on track for 40 million visitors this year, says the Las Vegas Convention & Visitors Bureau. That would break the record set in 2007 before the start of the recession. Year-to-date lodging occupancy is a shade above 85% and if you just look at occupancy for hotels, it’s nearly 90%. Average rates are up in excess of 3%.
And despite its reputation as Sin City, Las Vegas’ tourism backbone is group business, another segment on the rebound with both the number of meetings and total attendance slightly up over last year.
Clearly, the cabbies and drivers who’ve carted me around town know what they’re talking about. Of course, the city was one of the hardest hit by the recession, and lingering problems remain. The city’s unemployment rate of 11.1% in November ranks it 352 out of 372 markets in the U.S. And, unlike the rest of the country, the city’s housing market hasn’t recovered very much.
Working in the hotel industry’s favor is a nearly depleted pipeline of properties under development, including several half-built casino hotels sit on the Strip waiting for the market to turn around completely before they can be completed and opened.
If anything, Las Vegas is a resilient hotel town. For the past five decades, the city has suffered through cyclical downturns, often caused by too much supply coming online, only to rebound in a couple of years. By all accounts, and most importantly the analysis of the taxi community, Las Vegas is in the early stages of another of its storied comebacks.