News - May 21, 2020 - by Ray Hagar
It could take as long as three years for the full Las Vegas economy to return from the COVID-19 downturn, one of Nevada's leading fiscal and economic experts said Thursday on Nevada Newsmakers.
Jeremy Aguero, principal analyst with Applied Analysis of Las Vegas, told host Sam Shad that the Southern Nevada economy is "modeling somewhere between an 18-month to 36-month recovery."
When asked about a possible three-years-to-recovery scenario, Aguero said, "Look, it is a very high likelihood that it could happen. Not that it is absolute but I think we have to understand that it is a function of science and not of timing. We've got to get on top of the virus before we get in front of the economy."
Aguero based part of his opinion on the fact that much Las Vegas' economy is dependent on visitors, including crowds at special events, games, shows, conventions and casinos.
"There is no doubt about it, that when we look at anything that requires a mass gathering of people, the expectation is going to be that it is going to lag," Aguero said. "When we look at the southern part of the state, where 20 percent of the visitors come from international points of origin, that is going to lag. And when we're looking at conventions and trade shows, meetings and those types of things, which count as another 16 percent of visitors, there's no doubt that is going to lag as well."
The casinos and other major venues are currently closed amid the COVID-19 shutdown that began on March 18, the day after Gov. Steve Sisolak issued an executive order closing nonessential businesses, including casinos. Several casinos are planning to open in June, although some had hoped to be open for the Memorial Day weekend. The Nevada Gaming Control Board is meeting next Tuesday and is expected to discuss the matter.
"It isn't going to be easy and our state's economy is disproportionally dependent on people getting in a car or getting on a plane and going on vacation," Aguero said. "That's going to take some time to recover."
A key factor in the recovery is that visitors feel their health is not at risk by visiting Las Vegas.
"This is not going to go away overnight and what is particularly critical for our economy is making sure that tourists and other customers feel very comfortable and somewhat confident that they at a safe place," he said.
Aguero praised Sisolak for helping stave off the virus' spread with the shutdown. Nevada reported 301 deaths from COVID-19 as of May 19, according to the state Department of Health and Human Services.
Sisolak praised the state's response earlier this week, noting Nevada has surpassed 103,000 tests for the virus, including processing 6,600 test in one day.
"It took a remarkable amount of political courage for the governor to close The Strip, or close the tourism industry, I should say, when he did," Aguero said. "As he has said from Day One, this is going to be a function of science. It is not going to be a function of time. We are going to be deliberate and thoughtful, relative to this."
He noted some people fear opening the economy too soon.
"The worse-case scenario is not waiting a few more weeks to open," Aguero said. "The worst-case scenario is opening up too early and the state of Nevada becoming a hot spot for COVID-19. So frankly it (Sisolak's action) didn't surprise me at all."