Las Vegas tourism drops in May; new room tax increase will cause more harm
From the RJ:
Fewer meetings and lower attendance at two large conventions drove local visitor numbers down again in May.
The number of visitors to the valley dropped 5.8 percent to nearly 3.2 million people, numbers released Thursday by the Las Vegas Convention and Visitors Authority show…
In Las Vegas hotels, occupancy dropped [to] 84.4 percent from 89.7 percent, with weekend occupancy dropping less than a percent to 91.8 percent.
Daily average room rates, however, dropped 28.3 percent to $96.96 per night from $135.17 per night in May 2008 as large hotel-casinos lowered rates to lure visitors.
“We think this reflects significant room discounts and aggressive marketing packages and programs that took place in May to stimulate demand into Las Vegas,” JP Morgan analyst Joe Greff said in an investors note.
Note what the private sector is doing to get tourists to come to Las Vegas – it’s cutting prices. It’s the law of supply and demand in action.
That’s what makes the hotel-room-tax increase that went into effect on July 1 so damaging.
If you recall, the first part of the billion-dollar tax increase that the Nevada Legislature passed this year was a room-tax increase. It raises room prices, which will result in fewer tourists coming to Las Vegas (than if the room tax had stayed the same). Fewer tourists mean fewer jobs for Nevada residents and, ironically enough, fewer tax dollars for the state.
This is another example of how tax increases (no matter how small) destroy jobs. And don’t think our elected officials didn’t know this when they passed the record-setting, billion-dollar, secret tax increase earlier this year, because they did.