It may take three long years for the Las Vegas economic recovery to take full effect after the COVID-19 shutdown. So says one of Nevada’s leading economic and fiscal experts.
Jeremy Aguero, the lead analyst with Applied Analysis of Las Vegas, has said that the Southern Nevada economy modeling is in the range of an 18-month to 36-month economic recovery.
When questioned further about a possible three-year Las Vegas economic recovery, Aguero said, “Look, there’s a very high likelihood that it could happen. It’s not absolute but I think we must understand that it’s a matter of science and not timing. We’ve got to get on top of the coronavirus before we get in front of the Las Vegas economic recovery.”
The Las Vegas Economic Recovery is Dependant on Tourism
In part, Aguero based his prediction on the fact that much Las Vegas’ economy is tourism-dependent, which includes big crowds at conventions, shows, special events, games, and casinos.
“There’s no doubt about it, when we look at an economy that requires a large gathering of people, you can expect it’s going to lag,” Aguero said. “When we examine the southern part of Nevada, where 20% of the visitors come in from international countries, it’s going to lag. And when we look at meetings, conventions, and trade shows, those types of events, that account for another 16% of visitors, and there’s no doubt that’s going to lag as well.”
Las Vegas Casinos Remain Closed
Casinos all over the state, as well as other large venues remain closed due to the COVID-19 shutdown beginning on March 18. That’s the day following Governor Steve Sisolak’s executive order closing all “nonessential” businesses, including the state’s 400 casinos.
Although some casinos had hoped to be open for the Memorial Day weekend, that hasn’t happened. Several casinos have revised their plans to open sometime in June, and the Nevada Gaming Control Board is expected to meet on May 26 to discuss the matter.
A Long Road to Economic Recovery
“It isn’t going to be easy and Nevada’s economy is disproportionally dependent on visitors getting on a plane or getting in a car and going on vacation,” Aguero observed. “That is going to take some time to recover.”
A key factor to the Las Vegas economic recovery is visitors must feel that their health is not at risk by visiting the casinos.
“This isn’t going to go away overnight. What is especially critical for our economy is ensuring that tourists and other customers around the state feel very confident and comfortable that they’re in a safe place,” he said.
Aguero heaped praise on Governor Sisolak for his efforts to fight the virus with the shutdown. Fortunately, as of May 19, Nevada has only reported 301 deaths from COVID-19 according to the state’s Department of Health and Human Services. Nevada has approximately 3 million people, so the death toll in the state has been 0.01%.
Governor Sisolak praised Nevada’s response, noting that Nevada had performed more than 103,000 tests for the virus, processing 6,600 tests in one day.
“It took an incredible amount of political courage for the governor to close The Strip, or I should say, close the tourism industry, when he did,” Aguero mused. “As the governor has said from Day One, this is going to be a process of science. It’s not going to be a matter of time. We are going to be thoughtful and deliberate, relative to this.”
Aguero noted some people are afraid of opening the economy too soon. However, perhaps even more Nevadans are frustrated over losing their jobs, and unable to get through the overloaded unemployment system. The fact is, nearly every weekend, thousands of Nevadans have engaged in protests across the state.
“The worst-case scenario is not waiting a few more weeks to open,” Aguero claimed. “The worst-case scenario is opening up too soon and the state becoming a hot spot for COVID-19. So frankly Sisolak’s action didn’t surprise me at all.”
In the meantime, the state is suffering under a staggering 28.2% unemployment rate, surpassing that of the Great Depression. In total, the state has lost 244,800 jobs over the last month alone. Nevada had 197,067 unemployment claims filed in April, an increase of 1,955% over April 2019. Overall, Nevada has the highest unemployment rate in the country.
Governor Sisolak had scheduled a press conference to announce Phase 2 of the state’s recovery on May 23, but pushed that back to May 26. As of yet, there has been no indication of what Phase 2 will entail, or when the state’s casinos will be allowed to reopen.
