The casino floors in Las Vegas are expected to be occupied again to 50 percent in mid-March. According to industry observers, this offers a glimmer of hope on the gaming and hospitality industries’ path to recovery.
The easing of restrictions comes in time for the busy Las Vegas season, with March Madness, pool season, and big convention bookings on the horizon.
“Assuming that we can stay on the path announced today, opportunities arise,” said Brendan Bussmann, director of government affairs for Global Market Advisors.
A “return to normal”
According to Governor Steve Sisolak’s most recent reopening plan, properties may slowly rise back to capacity levels not seen since the “nationwide hiatus” began in November. Casino Floor operators can increase their capacity limit from 25 percent from Monday to 35 percent and expand to 50 percent on March 15.
Bussmann called the jump to 35 percent utilization “small steps,” but believes things are going in the right direction for the games industry, the backbone of Nevada’s economy.
“I hope these trends continue … and that the introduction of a vaccine will help simplify operations,” he said.
The shift would come just in time for key revenue drivers like pool season and key conventions.
World of Concrete, one of the first major conventions slated to return to Las Vegas this year, will take place at the Las Vegas Convention Center in early June. The fair attracted around 54,000 visitors in January 2020.
“I want to help get our … congress business going again,” said Sisolak during a press conference on Thursday. “I want business travel to Nevada to make a comeback and boost our economy.”
A former long-time casino manager said he appreciated Sisolak’s decision to revert to restrictions similar to those prior to the governor’s “nationwide hiatus” in late November, as well as the anticipatory mention of the specific fair, one of the city’s “tent poles” indicates. “
“The fact that he mentioned this in his speech lets us know that he is aiming to (a) return to normal sometime in 21, provided the vaccinations can get out of there and we can continue to mask and reduce the spread. Said Nehme Abouzeid, President and Founder of the Hospitality Consulting Group LaunchVegas LLC.
The staggered reopening schedule does not provide hotel casinos with an “immediate rest,” though Sisolak, who provides a step-by-step timeline with a set bottom line, gives Nevadans a goal to work towards, Abouzeid said.
“This was a ‘light at the end of the tunnel’ address,” he said of Sisolak’s announcement. “I think it would have been politically unpopular if he had just extended the hiatus for another month, especially since the numbers are falling, vaccine rollout has begun and there is a COVID-oriented government in Washington.”
Another hospitality veteran was surprised that the gaming capacity limits weren’t immediately reset to 50 percent. While Josh Swissman, founding partner of the advisory group The Strategy Organization, was happy that capacity limits were raised on Monday, he didn’t think the gradual easing would make small business owners “jump for joy”. A capacity limit of 50 percent is financially challenging enough, he said.
Sisolak also announced that the state will refer restriction decisions to local jurisdictions on May 1. This signals reason for optimism that the state could approach the conditions before the shutdown, said the Swiss.
“It makes sense to transfer oversight back to the local authority so that they can take a tailored and more individual approach,” said Swissman. “It has been said all along that what works in a rural county may not work in a more populous county like Clark.”
Similarly, the easing of restrictions on collecting sizes and large events offers “a glimmer of hope” for the convention business of hotel casinos, Swissman said.
“I think what you will see by tomorrow, you will likely have some enterprising salespeople on the phone telling all customers and contacts in this size range for gatherings that March 15th is the date and March 15th is the date To start booking, ”he said.
Sisolak mentioned Thursday that the new measures were based in part on a desire to get the Nevadans back to work. The state’s unemployment rate fell to 9.2 percent in December, beating the national unemployment rate of 6.7 percent.
Executives at at least one casino operating company, MGM Resorts International, have announced that they will hire employees as soon as operating restrictions ease.
“We expect to continue mobilizing, hiring and retraining our fantastic teams to serve our guests,” said MGM CEO Bill Hornbuckle during a Wednesday meeting with investors. “Later this year, we’ll be doing the same with our industry-leading entertainers in all of our properties.”
A statement from MGM said the company could “not be more excited” to increase its occupancy, resume entertainment and bring back large-scale conventions.
“World-class entertainment and convention are key to Las Vegas recovery. We will continue to prioritize the health and safety of guests and staff as restrictions are relaxed, amenities expanded, and Las Vegas and the economy rebounded,” it says in the declaration.
The company plans to “soon” release more details on its expanded offerings.
Station Casinos and Las Vegas Sands Corp. declined to comment. Caesars Entertainment Inc., Wynn Resorts Ltd. and Boyd Gaming Corp. have not returned requests for comments.
The review journal is owned by the family of Sheldon Adelson, the late CEO and chairman of Las Vegas Sands Corp.