When casino industry analysts first started assessing the economic impact on Las Vegas as a result of the coronavirus pandemic, several saw an extremely long road to recovery. They forecasted that three years or more would be needed for things to return to normal, but later projections cut that time down significantly. As the COVID-19 threat continues to linger, so does the threat of continued poor performance for the gaming industry, and another industry analyst has now weighed in on what everyone should expect. According to Macquarie Securities analyst Chad Beynon, Las Vegas and the Strip won’t be able to return to normal until 2023, and even that hinges on one key element.
The precursor to Las Vegas being able to return to normal is the successful introduction of a COVID-19 vaccine. According to Dr. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases and the man who has spearheaded most of the recovery efforts in the U.S., that vaccine is coming, but possibly not until the end of the year. In the meantime, the country is still dealing with occasional spikes and outbreaks as it works to keep the virus from being able to take over.
If that vaccine is delayed or proves to be ineffective, the timeline for Las Vegas’ recovery will have to shift. Beynon believes the city’s immediate future hinges on the vaccine and asserts, “We believe with a [COVID-19] vaccine, the Las Vegas market will see a quick recovery, and our bull case scenario points to 2023 being the break-even year.” After being able to break even, there will still be a lot of work needed to put Las Vegas where it anticipated being three years from now before COVID-19 slammed into the city.
Nevada has always been focused on gaming and tourism as its main sources of revenue. Tourism gave the state $19 billion last year – $6.8 billion from the Strip casinos – and accounted for 450,000 jobs. However, the Silver State’s unemployment rate jumped to 28.2% this past April and now sits at around 15%, 5% higher than the national average. Additionally, the revenue in the state has been off by as much as 61.4% compared to last year’s figures.