Las Vegas: What next and when?

While everyone from Las Vegas Mayor Carolyn Goodman up to the highest ranks of the federal government trying to rush people back to work, we’re forced to consider what Sin City will look like after the Coronavirus pandemic … and when that will be. VitalVegas author Scott Roeben has posted 11 prognostications for a post-Covid-19 Vegas and we’ll just hit the highlights and let you read the rest at his site. Roeben predicts …

• • More promotional allowances (read: discounts and comps). Hurray!
  • No buffets
  • The Drew is toast
  • Improved property sanitization
  • A Nevada lottery (improbable, we think)
  • Economic diversification, prefaced by improved education (yeah, like that’s gonna happen)
  • More automated functions in casinos (forget slipping $20 to the check-in clerk anymore)
  • Gloved and possibly masked casino dealers (just like Macao)

There’s more, but you get the idea. The billion-dollar question is how long the Silver State will have to wait for this to happen. The Motley Fool proposes a scenario in which the Las Vegas Strip is shut down for another six months, maybe even a year. That’s sure to cause a lot pearl-clutching in the halls of power. The political and economic pressure on Gov. Steve Sisolak (D) to reopen the casinos sooner rather than later has got to be overwhelming. Frankly, we didn’t think he had it in him but Sisolak has shown a great deal of intestinal fortitude so far.

Besides, The Fool‘s Jeff Hwang writes, the question of normality returning to off-Strip Vegas and the Strip itself “are two completely different questions with different timelines.”Hwang likes Las Vegas’ chances of containment because it’s a diffuse metro area, isolated in the middle of the desert. “Thanks to the leadership of Gov. Sisolak and the casino operators who moved to shut down first and get in front of the looming coronavirus outbreak, it’s conceivable that Las Vegas may come away from this relatively unscathed in that regard,” he writes.

That said, he thinks containment will last into June, based on testing capability. First out of the box would be Boyd Gaming and Station Casinos, plus slot routes, “with the caveat that we may be staring at additional lockdowns up until the point that a coronavirus vaccine is produced, and that there will likely still be social distancing measures in place regardless.” This is good news for Station, which is uniquely ill-positioned to withstand a recession, having put all its chips on the Vegas Valley.

As for the Strip, it is “a Petri dish for a virus, and little different from a cruise ship.” Hwang fears that it will be unsafe to travel for a long time and economic recovery in Las Vegas will be far from swift. (Remember, it took us eight years to regain the ground lost to the Great Recession.) Why? First, people must have the income and desire to travel, and the second may be easier to come by than the first. Secondly, Las Vegas has to = ‘safe.’ Third, Las Vegans have to feel safe themselves vis-a-vis their visitors. With little means of testing Nevadans, how are tourists to be adequately screened? And from where will those tourists be coming, Hwang asks. “China? Italy? Spain? The UK? New York City? New Orleans? Florida spring breakers? Other cities which may yet see outbreaks or will be dealing with containment for the foreseeable future?”

Unlike Macao, which suffered a 15-day lockdown, the Strip has no day-tripper constituency upon which to draw. For once it’s worse off than Atlantic City. (Las Vegans tend to regard the Strip with a mixture of annoyance and alienation.) The austerity measures that might have to be taken to contain Coronavirus—such as no liquor sales—won’t exactly spell “fun” to the Vegas habitués. Hwang advocates selective travel bans, along with Macanese-style measures such as reduced slot inventory, limitations on players at table games (Remember the days when casino executives touted the thrill of crowded table games, filled with players high-fiving each other?) Already Wynn Resorts has experimented with temperature checks.

Hwang predicts a phased-in return of Strip resorts (MGM Resorts International is talking about a June timeline) with reduced amenities. Imagine pool-party season without pools. “At this stage, even the idea that the NFL season will start on time in September is doubtful. With that in mind, why are we so anxious to crowd the Strip before we are ready? … the best proxies for the Strip are theme parks (chiefly Disney World and Disneyland), cruise ships, and the return of the sports leagues.”

There is a silver lining, Hwang adds. Las Vegas’ image as a bargain destination has taken a beating in recent years, thanks to money-grubbing measures like resort fees and two decades of increased house edges (think 5/6 blackjack). He also thinks there’s been a “stunting” of the Vegas visitor profile as older hotels are imploded and replaced with a glut of four- and five-star properties. Visitation peaked near 43 million in 2016 and has been stuck on the 42 million needle ever since. With lower demand looming “room rates will be more attractive by default.

“That said, I think this is an excellent opportunity—while the whole planet is closed—to hit the reset button. This means ditching the nickel-and-dime approach to the customer, and taking the opportunity to do away with hidden fees—including resort fees—entirely,” whether it’s done federally, by the Lege or the resort industry takes the lead (our preferred approach). Hwang contends that “we are back in the part of the value cycle where Las Vegas will once again be an attractive value proposition, if once again not by choice. The value proposition is the Strip’s Great Equalizer, that thing which will allow the Strip to course correct when things fall too far … We do this right—and this starts by not screwing up the coronavirus containment effort locally, and by not forcing the Strip open before we are ready for visitors—and the customer will come back in due time.”

Like Roeben, Hwang concludes with an upbeat vow: “For those of you who don’t live here, I promise that when this is over, the Las Vegas you come back to will be better than the one you last visited.” Like Roeben’s, Doctor Hwang’s Rx comes with a lot of short-term pain but the prospect of better days … if we can wait that long.

(This just in: “Finalized data from the Nevada Department of Employment, Training and Rehabilitation (DETR) show initial claims for unemployment insurance totaled 79,285 regular initial claims for the week ending March 4, up 7,343 claims, or 10.2 percent compared to last week’s total of 71,942. This is the second highest weekly total in state history. Through week ending April 4, there have been 271,533 initial claims filed in 2020, this is 28,417 more than the state saw in the last two years combined.”)