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Thursday, 19 June 2008

Airline cuts, high gas prices hit Las Vegas

LAS VEGAS - SIN City is facing hard times.
Soaring fuel prices are forcing airlines to cut flights and jack up fares to this desert oasis. Road trips have become luxury travel with gasoline costing more than US$4 (S$5.47) a gallon.

And tourists who do make it to Las Vegas are spending less, leading casinos to offer deals just to keep them in their resorts.

'The overall economic uncertainty this country is facing ... makes the outlook for the next several months very murky,' said Mr Gary Thompson, spokesman for Harrah's Entertainment, owner of seven Las Vegas casinos.

US Airways Group announced last week that it was cutting nearly half its Las Vegas flights as part of companywide belt-tightening. That will leave 74 US Airways flights per day by the end of the year, down from a peak of 141 in September 2007.

The result is more than 8,000 fewer seats available per day, compared to the 2007 peak, according to data from the Clark County Department of Aviation. US Airways was the second-largest carrier to Las Vegas behind Southwest Airlines.

'We've seen airlines increase and decrease service periodically. Clearly, never to this extent all at once,' said Mr Alan Feldman, a spokesman for MGM Mirage, which owns 10 casinos on the Las Vegas Strip and plans to open CityCenter next year.

The flight cuts are another hit in what is shaping up to be a rough year for Las Vegas casinos. Casino officials and industry analysts say the slump is a result of economic complaints felt around the country - rising gas and food prices, home foreclosures and general uncertainty.

'As far as filling the rooms, the lack of airline service I think is going to have an impact on the entire community,' Mr Thompson said.

Nightly room prices were down 4 per cent in Las Vegas compared to one year ago and gambling revenue was down 3.7 per cent, according to data through April from the Las Vegas Convention & Visitors Authority. Total airline passengers through April were down 1.8 per cent and traffic from California was down 4.8 per cent.

Feldman said MGM Mirage has put together programs to entice visitors, wooing them with package deals, free nights and vouchers for show tickets and food.

With the airline industry expected to lose US$2.3 billion this year, airline industry analyst Mr Robert Mann said it may be up to big casinos to subsidize travel into Vegas, by land and by air.

'There's such an interest among hoteliers for arrivals that you may see more charter flying going back into Las Vegas,' he said.

But the gambling industry in Las Vegas and Atlantic City is bracing for a hit this year, too.

Nevada will see revenues dip this year and next year, to US$12.4 billion in 2009 compared to US$12.8 billion in 2007, according to a forecast of worldwide gambling released Wednesday by PricewaterhouseCoopers LLP.

The financial consulting company said it expects Nevada to rebound in 2010 and see gambling revenue grow to US$14.8 billion in 2012.

'It's going to take a little while for the market to right itself, but I do think that that's what will happen,' Mr Feldman said. -- AP

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