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Las Vegas, the hardest-hit metro economy in America, just suffered another blow
San Francisco (CNN Business)In the run-up to the Consumer Electronics Show last year, Gina Muoio was pulling 60-to-80-hour weeks at the Mandalay Bay Convention Center in Las Vegas.
Muoio worked as an event coordinator for a third-party electrical vendor and carefully choreographed the power needs for exhibitors, presenters and attendees at trade shows held in the massive hall.
"There are very long days, and you're on your feet the entire time," said Muoio, 39. "Sometimes you don't even have time to eat."
During a typical January, the presence of CES in and around Las Vegas is unmistakable. Hotel prices skyrocket, restaurants and clubs are packed, and workers like Muoio log extra hours to ensure everything goes on without a hitch for the major money-making show and related events. Last year, the 170,000 CES attendees were estimated to have generated $169 million in direct spending and a broader economic impact of $291.2 million, according to the Las Vegas Convention and Visitors Authority.
The move, meant to prioritize health and safety during the Covid-19 pandemic, serves as another blow to a city already sent reeling by the current health and economic crises.
In January 2020, the CES conference was estimated to have drawn 170,000 attendees to Las Vegas and generated $169 million in direct spending and a broader economic impact of $291.2 million. (Mark Damon/Las Vegas News Bureau)
Money running out
The job market in Las Vegas has been the hardest-hit among large US metro areas during the pandemic. The region is heavily reliant upon travel, discretionary spending, business conferences and large gatherings, but has seen those key spigots turned off.
In April 2020, shutdowns resulted in a 34% unemployment rate in Las Vegas. Although it's improved since then, Las Vegas still has the highest unemployment rate among large metro areas, according to US Bureau of Labor Statistics data.
As of November 2020, Las Vegas metro area's unemployment rate was 11.5%, and 128,000 people — including Muoio — remained out of work.
After being furloughed in March, Muoio was permanently laid off in August.
Since then, she says she's applied to hundreds of jobs — including stay-at-home event coordinating roles and positions in customer service or marketing — but has yet to land anything permanent.
Living without health insurance and awaiting a state unemployment benefit application that's been pending since August, Muoio said she's fortunate she had some money saved for an eventual down-payment on a house.
"That money is slowly, slowly dripping down," she said. "I'm running out."
Brandon Geyer is facing a similar situation. He's been out of work since March.
Brandon Geyer, a bartender in Las Vegas, said he's been unemployed since March.
"Come March, when this first happened, I was under the impression we were going to be shut down for a couple of weeks, no big deal," he said. "Another week goes by, and another week goes by, and all of a sudden, I haven't gone back to work since March."
For nearly 24 years, Geyer, 49, had tended bar at the Main Street Station, a downtown Las Vegas casino, brewery and hotel that remains temporarily shuttered due to the pandemic. And while the crowds got bigger whenever CES came to town, Main Street Station attracted a loyal clientele, many of whom Geyer got to know well through the years.
Geyer said he's grateful to be receiving unemployment benefits, that his wife still has her job, and that they had some money in savings to support themselves and their two kids. The Culinary Workers Union Local 226 has also helped procure weekly food assistance and groceries.
But the loss of full and steady income is taking its toll, Geyer said. He's hopeful that his union's push for Clark County, Nevada, to adopt a "Right to Return" policy will be put in place, requiring employers to offer laid-off workers the right to return to their old jobs when businesses reopen.
"We're just wondering when we're going to return to work," he said.
The Boyd Gaming-owned Main Street Station is expected to reopen sometime in 2021, CEO Keith Smith said during the company's most-recent earnings call in October.
This time last year, optimism was high that 2020 — and CES 2021 — would be quite prosperous for Las Vegas, said Steve Hill, the chief executive officer of the Las Vegas Convention and Visitors Authority.
"We had set [room tax dollars] records in seven of the previous 10 months," he said. "It looked like that was certainly going to continue."
Hotel and resort construction projects were underway, and, the city not only was scheduled to host the NFL draft in April but also would have the glitzy, $1.94 billion Allegiant Stadium filled with fans to cheer on the recently relocated Raiders NFL team.
And for January 2021, CES was slated to be the first event held in a nearly $1-billion expansion of the Las Vegas Convention Center and serve as the debut for a futuristic "people-mover" project from Elon Musk's The Boring Company.
The Las Vegas Convention Center underwent a nearly $1 billion expansion, and CES 2021 was slated to be the first event held in its newly-constructed West Hall. Instead, the event is all-digital due to the pandemic.
Instead, the new 1.4 million-square-foot West Hall sits eerily empty, Hill said.
The expectation from both the visitors authority and CES organizers is for the event to return to Las Vegas in 2022 and beyond. Although it likely will look a bit different when it does return.
"The future of events will most likely include a digital component," officials for the Consumer Technology Association, which hosts CES, said in a statement. "The events industry has had to innovate throughout this pandemic, shift business models and adapt to our new circumstances."
On Monday night, more than two dozen marquees at properties along the famed Las Vegas Strip were lit with the message: "We miss you, CES. Can't wait to welcome you back in 2022."
On Monday, more than a dozen marquees along the Las Vegas Strip were lit with the message: "We miss you, CES. Can't wait to welcome you back in 2022."
'All bets are off'
The US Travel Association, citing data from the research firm Tourism Economics, estimates that the Covid-19 pandemic has resulted in $500 billion in cumulative losses for the nation's travel economy since March, causing an estimated $64.4 billion hit to federal, state and local tax revenue.
While leisure travel is expected to fuel the travel and tourism recovery, those trips aren't expected to return to pre-pandemic levels until 2022, Adam Sacks, Tourism Economics president said during a US Travel Association webinar in December. It will likely take until 2024 or later for business and corporate travel to fully return, he said.
For cities such as Las Vegas to see meaningful economic improvement, people will have to feel comfortable traveling again, being indoors again, and willing to spend money, said John Restrepo, principal of Las Vegas-based RCG Economics.
And until vaccinations are widespread "all bets are off," Restrepo said.
Nevada's lack of industry diversification likely will hinder the jobs recovery much like it did after the Great Recession, he said. Following the 2008 downturn, it took nine years for the state to surpass its pre-recession jobs numbers.
This time around, Restrepo predicts it will take at least three years for the state to achieve the consistent annual rates of growth seen in major economic indicators before the pandemic hit. It will take even longer, he said, to get back to the actual levels of jobs, sales taxes, gaming revenues and conventioneers.
"It's going to be a long slog out of this rut here in southern Nevada," he said.