The whole world has been affected by the COVID pandemic. Even to the extent that we wonder if it will ever be the same. However, some parts of the world have suffered more due to the industries their economies rely on. One of them is Nevada, with Vegas and Reno. Being the cities that have been heavily affected by stay-at-home orders and restrictions placed on indoor entertainment. Which represents a significant portion of the state’s economy. In this article, we will discuss how Vegas and Reno could recover from the pandemic and its consequences.
Current State of Affairs
It’s been a year since Nevada casinos, as non-essential businesses, were ordered to shut down. While most gaming venues reopened in June 2020, with social distancing and safety measures in place. The overall situation looks nothing like before the pandemic struck. Some casinos returned to 24/7 operations, according to the latest news. But a total of 13 Nevada casinos are still closed in March 2021.
However, even those casinos that have returned to 24-hour operations don’t operate at a full capacity. From November until February, they were allowed to operate at a limited capacity of 25%. On February 15, Nevada casinos were allowed to accept up to 35% capacity. And a state health directive have allowed them to operate at a 50% capacity as of March 15.
Recovery of both cities
While Vegas is known as the gambling capital of the world. And Reno as the biggest little city in the world. The latest reports show that the latter is doing better when it comes to recovering during the pandemic. Some of the reasons why Reno is ahead of Vegas in bouncing back from the pandemic are its proximity to large cities and diverse economy. Also, it depends less on international passengers and casino jobs, some industry experts say.
On the other hand, Vegas is located in a remote desert, far away from large metropolitan areas. Tourism and entertainment are the main industries in Vegas. The data show that in 2018 only, convention visitor spending supported nearly 45,000 jobs. Earning $2.0 billion in wages and generating economic output of $6.6 billion. So, without conventions and international visitors, it would be hard for Las Vegas to rebound. In 2020, McCarran International Airport saw more than 30 million arriving and departing passengers less when compared to 2019.
When it comes to the number of workers employed in the entertainment and hospitality industry. Before the pandemic, Reno had 15% of workers employed in these sectors. While in Vegas, the rate is higher, sitting at 28%. This has led to a higher unemployment rate in Vegas during the pandemic. While in Reno, the unemployment rate was 5% in December last year. Vegas saw 10.4%, which is considerably higher than the national average of 6.3% in the same period.
What Do Experts Say?
In April 2020, the University of Nevada, Las Vegas (UNLV) published an interview with Stephen Miller. He is the director of the UNLV’s Center for Business and Economic Research. The article “Post-pandemic, When Will the Tourists Return?” offers his opinions about what is in store for Southern Nevada in the coming months. The author reminds readers that the Great Recession 2007-2009 hit harder Las Vegas than any other part of the US.
According to Miller, recovering of Vegas will take time and depend on reestablishing routes and flights to this destination. Besides, he thinks that tourists need to be sure that it is safe to travel to Vegas for a vacation. As he predicts, drive-in tourists from California and other states will come back sooner. And in the long run, Vegas will come back as an international destination for entertainment.
Although the director of the UNLV’s Center for Business and Economic Research could not predict how long it would take for business to go back to business as usual. He disagreed that the gambling capital of the world would never return to where it had been before the pandemic. However, he thinks that the bulk of Vegas recovery will take place within 18 to 36 months. Depending on how long it would take for an effective vaccine to develop. He concluded the interview optimistically. Saying that Nevada was the “Silver State” and that the entrepreneurial spirit of the Las Vegas community could help the city reconfigure itself and come back as the Entertainment Capital of the World.
Nevada Has to Work on the Plan for Recovery and Resilience
The Nevada Governor’s Office of Economic Development has recently published The Future Beyond the Pandemic: Nevada’s Plan for Recovery & Resilience. The economic forecast was prepared by SRI International, an independent research institute, in collaboration with RCG Economics and Brookings Mountain West. A partnership between UNLV and the Washington, D.C.-based Brookings Institution. They provides an overview of Nevada economy and a set of recommendations. Including one that could help Vegas and Reno overcome the consequences of the shutdown.
The document states that arts, entertainment and recreation represent a significant portion of Nevada’s economy. According to it, the forecasted change in this sector GDP in Q4 2021. Compared to the expected growth under a no-pandemic scenario demonstrates high levels of variation between the best and worst cases. In the best-case scenario, the change in the sector GDP would be -4.3%. While in the worst-case scenario, it would be -46.3%. However, the document shows that the most likely change in the GDP of the arts, entertainment and recreation sector in Q4 2021 would be -20.4%.
The authors suggest necessary infrastructure investments that could help the state recover from the crisis. Although they say none can be done in a day or a week. They claim that even ambitious infrastructure programs will help the state quickly recover from the crisis. And lay the foundations for a new, resilient economy in the future at the same time.
In the economic forecast, it s said that the impact of the pandemic will be felt for many months. Perhaps even several years and that there will be no return to the world as it was in February 2020. To support these claims, the authors state that business travel and business meetings are now based on a wholly new technological infrastructure. While consumers’ attitudes regarding entertainment and recreation have undergone a significant shift.
As one of the measures that could help Nevada bounce back from the crisis, the authors suggest supporting entrepreneurship in digital arts and e-sports. Since entertainment has been an integral component of Nevada’s economy. And creative content has increasingly become digital and easier to consume without the need to travel to a particular destination. Becoming a hub for digital art creation will provide local creatives with an opportunity to produce and share their works to a broader audience.
The authors say that emerging areas like game design are also a significant area of growth in Nevada. Especially in Southern Nevada, with e-sports emerging as the new frontier in gaming. To enable entrepreneurs to hone their skills and develop industry-leading games in Nevada. They should be granted access to resources, such as game design studios and equipment. Since Nevada is one of the regulated markets when it comes to online gaming. The entrepreneurs will have an opportunity to test their products as well as the potential to scale beyond the state. It is suggested that the necessary infrastructure for digitizing and performing arts could be provided within the UNLV innovation district. Where a Digital Arts Studio in Southern Nevada could be located.
As you can see, the future of Vegas and Reno is unpredictable. And no one can tell when the full recovery of these two cities will happen. Nevada is one of the US states where online gambling is legal. However, not all forms of entertainment on the web are allowed. While Nevada citizens can enjoy sports betting and online poker, online casino gambling has not been regulated yet. At the moment, Nevada-based casinos offer social casino games players can enjoy without wagering real money on them.
The current economic situation may lead to the legalization of online casinos in Nevada. It won’t solve the problems caused by the COVID pandemic. According to Forbes, the complete recovery of Las Vegas may take place in 2023 due to multiple factors. From the financial crisis that will prevent people from going on luxury trips to the lack of international flights and conventions.
Since tourism and gaming taxes contribute 47% to Nevada’s budget. We believe that the government will help businesses rebound in these challenging times. One survey showed that Nevadans are more optimistic about the economic recovery of Vegas than about the recovery from the coronavirus. They are aware that it will be a lengthy process. And that they will have to abide by public safety measures that are here to stay.