Unexpectedly, Las Vegas hit by U.S. downturn

Tue Sep 23, 2008 4:47am EDT
 
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By Deena Beasley

LAS VEGAS (Reuters) - Sue Garrett, in Las Vegas for a birthday party earlier this month, went to what she considers extraordinary lengths to hold down the cost of her trip.

"We decided to sit through one of those blasted timeshare presentations to get a free hotel room," said Garrett, who lives in Los Angeles. She turned down the timeshare but earned herself and her husband a stay on the Las Vegas Strip for her trouble.

Similar stories are heard all over Las Vegas these days, where resorts are discounting and even giving away room nights just to attract enough people to keep their roulette wheels and slot machines spinning.

Vegas barreled through previous U.S. economic recessions with no problem, but the current slowdown -- marked by home foreclosures and then high gasoline prices -- has had a much bigger impact on the gambling mecca than economists expected.

And while free rooms and room discounts have kept hotels relatively full -- occupancy is down just 1 percent in the year to July -- gambling revenue is down 6.5 percent.

"People still have Las Vegas as their destination of choice, but their budget is less," said Jan Jones, senior vice president at Harrah's Entertainment, operator of nearly one-third of the Strip, from Bally's to Caesars Palace.

Harrah's and MGM, which operates 10 properties on the Strip including Bellagio and Circus Circus, have each cut about 1,500 Las Vegas jobs over the past year.

"There is no question that people are spending less money now," said Jim Murren, president and chief operating officer at   Continued...