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Californians turned out for Las Vegas’ reopening. Will they keep coming?

Thursday, June 18, 2020   /   by Ken Couture

Californians turned out for Las Vegas’ reopening. Will they keep coming?

At Harrah’s, masked gamblers cheer after a winning round at blackjack. Others lounge by the pool with a drink in hand, or dine on a $150 steak at one of the property’s finer restaurants.


Despite the Sin City-like offerings, this isn’t a Las Vegas property. It’s Harrah’s Resort Southern California, a tribal casino and one of Harrah’s Las Vegas’ many sister properties. It may not be on the Strip, but its location has its own perks: proximity to both Los Angeles and San Diego.


With Las Vegas’ offerings limited during the pandemic, some experts say convenient regional properties could be viewed as a safer bet for gamblers, and could pose problems for Las Vegas’ visitation rates down the road.


“Why spend all that money to get (to Vegas),” Suntrust Robinson Humphrey gaming analyst Barry Jonas said. “It’s probably a safer bet for me to drive 30 minutes to a closer casino — if things don’t seem right, I can hop back in my car and go home.”


What makes Vegas, Vegas


Gamblers outside of Nevada have plenty of gambling options at home, according to a 2020 report from the American Gaming Association. California has 77 tribal casinos, while Arizona, another state that brings a heavy amount of drive-in traffic to Las Vegas, has 26.


Even so, many opt for Las Vegas properties. Southern California brought in about 19 percent of Las Vegas’ visitors in 2018, according to the Las Vegas Convention and Visitors Authority.


Visitation numbers from this region were promising during reopening weekend — data from the Regional Transportation Commission of Southern Nevada shows more than 59,600 vehicles entered on Interstate 15 from California from June 5 to 7 — but Jonas believes a portion of those gamblers will choose hotel-casinos closer to home once they realize some of Las Vegas’ key amenities are still offline.


“Clearly, there’s an expectation around Vegas and toward the Vegas experience,” he said. “I think you will see more and more amenities come online in Vegas, but likely, similar amenities come online in some of the tribal or regional properties as well.”


Currently, Las Vegas’ amenities mostly consist of pools, restaurants and gambling — all of which can be found in casinos outside the state. Clubs, concerts, major sporting events and shows such as Cirque du Soleil have yet to return.


According to a 2018 LVCVA report, 52 percent of visitors from Southern California attended a show during their trip to Las Vegas, 10 percent went to a hotel nightclub, 5 percent went to a free-standing nightclub, and 3 percent went to a day club.


While these attractions closed for good reason — to keep people healthy — Jonas said it’s incumbent on Las Vegas to give guests an experience that is both safe and unlike anything else they can get at home.


But right now, properties have “none of the wonderful amenities that make Vegas, Vegas,” Jonas said.


Not all agree. Amanda Belarmino, an assistant professor of strategic management at UNLV, said Las Vegas is still positioned to be a unique destination, even with limited amenities.


“You don’t have the Bellagio fountains anywhere else. We still have the Neon Museum, top restaurants … some things can’t be duplicated,” she said. “Regional casinos can be beautiful properties, but they’re rather isolated.”


But Jonas said there’s even more cause for concern down the line.


Competition for consumers’ discretionary income is bound to get only more intense as options such as movie theaters, theme parks and sporting events reopen.


There’s also a chance that consumers will tighten their purse strings if the economy worsens.


“There’s clearly some challenges in this economy that may not go away right away,” Jonas said.


Cleanliness comparison


Greg Chase, founder and CEO of Las Vegas-based Experience Strategy Associates, spent most of last week in Los Angeles, trying to gauge residents’ outlook on Las Vegas through casual conversations.


Based on their responses, he said, many wouldn’t be comfortable visiting Las Vegas right now.


While masks are optional for Nevada casino guests, certain California counties mandate people cover their face when they leave home. Many tribal casinos require employees and guests to wear masks, and restaurants in certain areas require guests to wear a mask if they step away from a table.


Chase said those who view masks as their “safety net” may be turned off from visiting a place such as Las Vegas, where rules on face coverings are more relaxed.


“I want (Nevada) to open as much as anybody else, but if we don’t do it the right way … we risk doing ourselves more harm,” he said.


He also pointed to recent coronavirus case numbers in Nevada as a travel deterrent. The seven-day average of new cases was 201 on Friday, the highest since the outbreak began in March, according to state data.


While other states have seen more severe upticks, a spike in Nevada “does not help someone’s want to travel,” Chase said.


But Belarmino said she thinks Las Vegas is viewed as a safe destination, with properties that are doing all they can to keep people safe.


“People are more inclined to come here because casinos have a high level of cleanliness,” she said. “We’ve had a big increase in testing (in Nevada).”


According to more than 700,000 geotagged tweets evaluated by betting site casinoinsider.com, Hawaii, Arizona, California, New Mexico and Utah are the top five states with people posting on social media about plans to visit Las Vegas.


It is “a destination location. It’s never really out of the woods,” Jonas said. “Even if you have no cases today, you can have someone coming in from Texas tomorrow who’s sick. You can’t close off Vegas.”


Reopening weekend showed that drive-in tourists are willing to visit Las Vegas amid a global pandemic, but Chase said those demographics could taper off.


“The customer that came last week … would’ve come, whether or not there were guidelines in place. Those are your avid gamblers — they’re coming no matter what,” Chase said. “The true test is in the next two to three weeks. … If we don’t see growth in visitation (by then), that’s where we should start to have some concerns.”

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