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Newsweekhttp://www.newsweek.com/id/135638Down on Its Luck
Las Vegas used to be a recession-proof oasis. Not anymore.
On the third weekend of every April, Emily Ann Frankston and her family—spread out over five states—meet up in Las Vegas for their annual family vacation. This year was different. The only ones to show up were Frankston, her husband and her brother-in-law, and they stayed just two nights instead of the traditional three. "My two sisters back east said airfares were too high, my mother-in-law lost her job in January, and some of the others said they were busy, but we think they didn't want to spend the money," says Frankston, 37, who drove in from the Phoenix area. "We've done this for the past nine years. Even after 9/11 we all came. But this year's it's just us. This recession is really hurting everyone."
It's even hurting the city of Las Vegas, the economy of which was once thought to be impervious to the economic swings suffered by the rest of the country. Not anymore. According to the Las Vegas Convention and Visitors Authority (LVCVA), Las Vegas has seen gambling revenues fall only once since 1970: in the aftermath of the Sept. 11 terror attacks they dropped 1 percent in 2002 from 2001. So far this year they've fallen 4 percent, the number of conventions held has dropped 10.4 percent, and average daily room rates were off 3.8 percent in the first two months of 2008, according to the most recent data available. Visitor volume was up 1.2 percent through February, but market analysts say that's because of the extra day provided by this being a leap year; March's figures will likely put the year-to-date numbers in negative territory. The stock price of MGM Mirage, owner of Bellagio, Mirage and eight other Strip resorts, has halved, from $100.50 in October to about $49 on Friday. In recent weeks the company eliminated 440 middle management jobs to save $75 million annually. "We made a structural change in our company to become more efficient and provide the same level of service, but we did have to advance that effort because we were also seeing a softening in the marketplace," says MGM Mirage spokesman Alan Feldman.
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