A report released Tuesday by the University of Nevada Las Vegas predicted a double-digit gain in visitor volume in 2022 that would put it just below 2019 levels, but noted that the surge in gaming revenue seen in 2021 will level off next year.
The report, which is used as a forecast for 2022, was unveiled by the Center for Business and Economic Research at its annual Outlook that featured a recorded keynote address by U.S. Treasury Secretary Janet Yellen.
The report outlined by UNLV economics professor Stephen Miller projects a 19.1% increase in visitor volume in 2022. Las Vegas should finish 2021 with a 66% gain over 2020, which declined 55% over 2019, the report said.
Through September, the Las Vegas Visitors and Visitors Authority pegged Las Vegas visitation at 22.7 million, some 57.7% higher than the 14.4 million through September 2020. Visitation is still 28.7% below the 31.8 million through September 2019.
Las Vegas is expected to benefit from the return of international travel that started Monday after a ban during the pandemic. Las Vegas welcomed 5.65 million international visitors in 2019, with Canada, Mexico and the United Kingdom leading the way. International visitors typically spend more than domestic travelers.
Conventions started to return this fall and will have an even fuller calendar in 2022, starting with the Consumer Electronics Show in January. Las Vegas saw a record of 6.65 million convention attendees in 2019 among its 42.5 million visitors, the second-highest number in Las Vegas history after 42.9 million in 2016.
“International visitors and convention business are picking up, so it’s another step back toward normal,” Miller said.
LVCVA CEO Steve Hill this week called the reopening of borders to overseas visitors “a watershed moment for Las Vegas. In addition to being a world-class leisure destination, our major tradeshows and conventions draw large international delegations, and we are very optimistic about the opportunities that lie ahead,” Hill said.
CBER is projecting a 4.9% increase in 2023 visitation, which means Las Vegas could return to its 2019 levels by then. Las Vegas is benefiting from Allegiant Stadium now open to fans and bringing tourists to town for Las Vegas Raider football games, an amenity it didn’t have in 2019.
That increased visitation will lead to higher occupancy rates in resorts. Las Vegas had an 89.9% occupancy rate in 2019 that fell to 42.1% in 2020. So far this year, the rate is 63.3% through September.
Miller projects that by the end of 2021, occupancy rates will increase 22.5% over 2020. They will increase 12.5% in 2022 and 5% in 2023, he said.
As for gaming revenue, it won’t see big gains in 2022 despite higher visitation and occupancy, according to Miller. He projects gaming revenue to increase 2% in 2022 and 2.4% in 2023, after Las Vegas ends with a 56% increase in 2021 over 2020.
“Gaming revenue has been achieving record highs, even though visitor volume hasn’t been as (robust),” Miller said. “People have been gambling more. That gambling spend per visitor has gone crazy during the pandemic. It’s fallen back down, but still higher than it was before the pandemic. If anything, it might go down a bit.”
Despite his forecasts, Miller warns it’s still difficult to get it correct, due to potential surges in COVID-19 that would curtail visitation, as it has done since casinos reopened in June 2020. He said the continued uncertainty of the coronavirus and its spread “poses a significant risk for Southern Nevada” going forward.
“We’ve seen in Europe that Germany is in trouble again with the delta variant so transmissible,” Miller said. “Herd immunity requires more than 70% (vaccination rate in the U.S. with one shot).”
Absent a new wave of coronavirus, however, the Southern Nevada economy and the local tourism sector will continue to recover or expand in 2021, 2022, and 2023, Miller said.
“Visitor volume, gross gaming revenue, hotel occupancy, and employment follow the same pattern of significant decreases in 2020 due to the COVID-19 recession, followed by significant rebounds in 2021 and smaller increases in 2022 and 2023,” Miller said.