1. A monthly report produced for Commerce Real Estate Solutions by Stephen P. A. Brown, PhD, Center for Business & Economic Research University of Nevada, Las Vegas
Issue 16 April 2012
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The Changing Nature of
Las Vegas Tourism
The Southern Nevada economy is largely defined by tourism. A region’s economic base is made
up of the industries that produce the goods and services the region provides to the rest of the
world. According to data from the U.S. Bureau of Labor Statistics, the Clark County economic
base comprises leisure and hospitality and air and ground transportation services, the latter
undoubtedly the result of tourism.
With strong population growth, the construction and and hospitality employment with overall California
real estate industry also stood out as an important aspect employment.
of the Southern Nevada economy until about 2007. The relative stability of the leisure and hospitality
Despite its strong contributions, however, construction industry is not surprising. Whatever sectors are
and real estate cannot be considered part of a region’s doing well in the U.S. economy generate the income
economic base. Its output is not exported to the rest necessary to support tourism, gaming and hospitality.
of the world. What drives construction and real estate As one of the premiere tourist destinations in the world,
is the region’s growth—which is mostly dependent on Las Vegas can always share in others’ fortunes.
the strength of the industries in its economic base.
Las Vegas Visitor Volume Rising
Tourism and Gaming
As of March, Clark County saw 23 consecutive
From 1990 through 2007, the growth of Clark County months of increased tourism. In 2011, Clark County
gross gaming revenue outpaced U.S. economic activity. visitor volume was 3.6 percent higher than in 2010. For
Clark County gaming revenue dropped more sharply the first three months of 2012, Clark County visitor
during the U.S. recession than overall U.S. economic volume averaged 3.2 percent higher than the same
activity, as was the case in previous recessions. Given time period in 2011. For Clark County visitor volume
the depth of the U.S. recession, it’s not surprising that to reach the high water mark of 43,915,649 set in 2007,
gaming revenue has been a little slow to rise. we need to see a 4.2 percent increase over 2011. That
Employment in Las Vegas leisure and hospitality probably will not happen in 2012.
outpaced overall U.S. employment from 1990 through
2007. Since then, employment in Las Vegas leisure This report is commissioned by
and hospitality has basically held its own with overall Commerce Real Estate Solutions
info@comre.com • 801-322-2000
national employment. So employment in the industry
has been more stable than gaming revenue. We see
a similar picture when comparing Las Vegas leisure

2. nevada’s Economy April 2012
The visitor picture is stronger for Las Vegas. Las Vegas Staying Longer; Paying Higher Room Rates
visitor volume is approaching the levels seen in 2007 During 2011, the average visitor to Las Vegas stayed
before the U.S. recession. In 2011, Las Vegas visitor longer than in 2010. Room nights occupied rose by 5.3
volume was 4.3 percent higher than in 2010. For the percent. That figure exceeds the gain in visitor volume
first three months of 2012, Las Vegas visitor volume by 1.0 percentage points. During the first three months
averaged 3.6 percent higher than for the same period of 2012, however, visitor volume was 3.6 percent higher
in 2011. For Las Vegas visitor volume to reach the high than during the same period in 2011, but room nights
water mark of 39,196,761 set in 2007, we need to see were only 3.0 percent higher. Room nights occupied
only a 0.7 percent increase over 2011. That is quite were 5.4 percent higher during the first three months
likely to happen in 2012. of 2012 than during the same period in 2007 before
Las Vegas tourism is changing as it recovers. Visitors the recession.
are coming from farther away, staying longer and Visitors are also paying higher room rates than they did
paying higher hotel rates than in recent years. Visitors in 2010. During 2011, room rates were 10.7 percent
also seem to be gambling less and purchasing less from higher than during the same period in 2010. During
the retail shops in the casinos. the first three months of 2012, room rates were 3.6
Visitor Composition Has Changed percent higher than during the same period in 2011.
Visitors came from farther away in 2011 than in Despite the gains, room rates during the first three
previous years. A higher percentage of Las Vegas months of 2012 were 16.8 percent below the rates seen
visitors are arriving by air. Passenger volume at Las in the first three months of 2007.
Vegas’ McCarran airport, including those passing Gambling Less
through, was 4.4 percent higher in 2011 than in 2010. During the recovery, gaming revenue has risen by less
During the first three months of 2012, passenger than visitor volume, but that is changing. During 2011,
volume was 3.0 percent higher than in the first three Clark County gross gaming revenue was 3.5 percent
months of 2011. higher in 2010—0.1 percentage points less than the
The slow economic recovery in the West has been gain in Clark County visitor volume. During the first
evident in the changing composition of visitors. The three months of 2012, Clark County gross gaming
number of visitors arriving by automobile declined by revenue was 4.4 percent higher than in the first three
0.5 percent in 2011. The number of people arriving months of 2012, while visitor volume was only 2.1
at the California-Nevada border was up by only 0.3 percent higher. Despite the recent gains, Clark County
percent.
In early 2012, however, we saw resurgence in
automobile traffic, despite higher gasoline prices. The
number of visitors arriving by automobile during the
first three months of the year was 0.5 percent higher
than for the same period in 2011. The number arriving
at the California-Nevada border was up by 7.5 percent.
One consequence of more visitors arriving by air is
increased taxicab ridership. During 2011, Las Vegas
taxi ridership was 7.3 percent higher than in 2010 and
1.6 percent higher than in 2007. During the first three
months of 2012, taxicab ridership was 3.9 percent
higher than in the same period in 2011.
Commerce Real Estate Solutions | comre.com

3. The Changing Nature of
Las Vegas Tourism
gross gaming revenue was 10.5 percent lower during The Slow U.S. Recovery Seen in Las Vegas Tourism
the first three months of 2012 than in the same period In short, the tourist-dependent Las Vegas economy
in 2007. continues to see the effects of a slow U.S. economic
Focusing on the Las Vegas Strip yields a more recovery. In first quarter 2012, U.S. gross domestic
favorable picture. During 2011, gross gaming revenue product (GDP) remained 5.4 percent below potential,
at establishments along the Las Vegas Strip was 5.1 and in April 2012, U.S. employment was 3.6 percent
percent higher than in 2010—0.8 percentage points below the high-water mark set in January 2008. Given
higher than the gain in Las Vegas visitor volume. the slow U.S. recovery, the recent gains in Southern
Similarly, gaming revenue along the Strip was 5.2 Nevada tourism and gaming have been impressive.
percent higher in the first three months of 2012 than For Southern Nevadans, one important question is
during the same period in 2011—1.6 percentage points how do the gains in tourism and gaming translate
higher than the gain in Las Vegas visitor volume. into employment? Although we are seeing gains,
Nonetheless, gross gaming revenue along the Las employment in the Las Vegas leisure and hospitality
Vegas Strip was 7.0 percent lower during the first three sector has not quite reached the levels established
months of 2012 than during the same period in 2007. in 2007. Continued gains in tourism and gaming
should mean increased employment in the leisure and
hospitality industry.
Nevada Economic Conditions
U.S. economic growth showed a substantial slowing in and 5.2 percent higher than a year earlier, respectively.
first quarter 2012. Consumer spending and inventory Personal consumption expenditures increased for the
investment remained fairly strong, but government ninth straight month in March, and retail sales rose in
spending, business fixed investment and net exports March for the tenth straight month. The Kansas City
made negative contributions. Nevada’s tourism and Financial Stress Index remained below its long-run
gaming industries continue to drive the state’s economic average in April, which suggests financial headwinds
recovery. Nevada’s construction sector remains at are not impeding economic growth. The quantity of
relatively low levels. Rising employment and reduced commercial paper outstanding remains low, which
labor force participation meant a lower statewide means that relatively little external financing is being
unemployment rate in March. used to support business investment, Table 1.
U.S. Economy Shows Slowing Growth Story continues after graphs
U.S. real GDP grew at an annualized rate of 2.2 percent
during first quarter 2012, representing a substantial
slowing from the fourth-quarter rate of 3.0 percent.
Consumer spending and inventory investment drove
most of the gains. Residential investment also continued
to show improvement. Government spending, business
fixed investment and net exports made negative
contributions. U.S. nonfarm employment rose by
only 115,000 jobs in April, marking the weakest gain
since August 2011. The unemployment rate fell to 8.1
percent in April, as labor force participation dropped.
Consumer sentiment increased slightly in April, but
consumer confidence slipped slightly. Sales of new and
existing homes slipped in March, but were 7.5 percent
Issue 16 | ©Copyright 2012 - All Rights Reserved

4. nevada’s Economy April 2012
U.S. Date Units Current Previous Change Year Ago Change
Table 1
Employment 2012M04 million, SA 132.989 132.874 0.1% 131.173 1.4%
Unemployment Rate 2012M04 %, SA 8.1 8.2 -0.1% 9.0 -0.9%
Consumer Price Index 2012M03 82-84=100, NSA 229.1 228.4 0.3% 223.2 2.6%
Core CPI 2012M03 82-84=100, NSA 228.4 227.9 0.2% 223.4 2.3%
Employment Cost Index 2012Q1 89.06=100, SA 115.3 114.7 0.5% 113.2 1.9%
Productivity Index 2012Q1 2005=100, SA 110.6 110.7 -0.2% 110.1 0.5%
Retail Sales 2012M03 $billion, SA 408.0 404.8 0.8% 382.1 6.8%
Auto and Truck Sales 2012M03 million, SA 14.31 15.04 -4.8% 13.02 9.9%
Housing Starts 2012M03 million, SA 0.654 0.694 -5.8% 0.593 10.3%
Real GDP*** 2012Q1 2000$billion, SA 13,502.4 13,429.0 2.2% 13,227.9 2.1%
U.S. Dollar 2012M04 97.01=100 99.026 98.727 0.3% 95.361 3.8%
Trade Balance 2012M03 $billion, SA -51.825 -45.416 14.1% -46.059 12.5%
S and P 500 2012M04 monthly close 1,397.91 1,408.47 -0.7% 1,363.61 2.5%
Real Short-term Rates* 2012M04 %, NSA -3.12 -3.82 0.7% -4.54 1.4%
Treasury Yield Spread 2012M04 %, NSA 1.97 2.09 -0.1% 3.40 -1.4%
Nevada Date Units Current Previous Change Year Ago Change
Table 2
Employment 2012M03 000 employees 1,122.6 1,113.9 0.8% 1,113.8 0.8%
Unemployment Rate* 2012M03 %, NSA 11.9 12.2 -0.3% 13.5 -1.6%
Taxable Sales 2012M02 $billion 3.223 3.154 2.2% 2.924 10.2%
Gaming Revenue 2012M03 $million 854.59 932.17 -8.3% 958.73 -10.9%
Passengers 2012M03 passengers 4.000 3.418 17.0% 3.990 0.2%
Gasoline Sales 2012M02 million gallons 83.72 85.12 -1.6% 79.63 5.1%
Visitor Volume 2012M03 million visitors 4.377 3.821 14.6% 4.278 2.3%
Clark County Date Units Current Previous Change Year Ago Change
Table 3
Employment 2012M03 000 employees 806.1 799.8 0.8% 803.4 0.3%
Unemployment Rate* 2012M03 %, NSA 12.1 12.2 -0.1% 13.7 -1.6%
Taxable Sales 2012M02 $billion 2.416 2.332 3.6% 2.174 11.1%
Gaming Revenue 2012M03 $million 733.49 812.14 -9.7% 835.68 -12.2%
Residential Permits 2012M03 units permitted 841 460 82.8% 450 86.9%
Commercial Permits 2012M03 permits 23 18 27.8% 32 -28.1%
Passengers 2012M03 million persons 3.655 3.108 17.6% 3.565 2.5%
Gasoline Sales 2012M02 million gallons 57.89 59.50 -2.7% 55.28 4.7%
Visitor Volume 2012M03 million visitors 3.836 3.326 15.3% 3.722 3.1%
Washoe County Date Units Current Previous Change Year Ago Change
Table 4
Employment** 2012M03 000 employees 186.9 185.9 0.5% 186.0 0.5%
Unemployment Rate* 2012M03 %, NSA 12.0 12.2 -0.2% 13.5 -1.5%
Taxable Sales 2012M02 $billion 0.398 0.397 0.3% 0.359 10.7%
Gaming Revenue 2012M03 $million 61.43 60.26 1.9% 61.15 0.4%
Residential Permits 2012M03 units permitted 42 42 0.0% 57 -26.3%
Commercial Permits 2012M03 permits 9 4 125.0% 5 80.0%
Passengers 2012M03 million persons 0.293 0.265 10.5% 0.349 -16.0%
Gasoline Sales 2012M02 million gallons 13.10 13.02 0.7% 12.41 5.6%
Visitor Volume 2012M03 million visitors 0.333 0.314 6.1% 0.352 -5.4%
*Change in percentage rate
**Reflects the Reno-Sparks MSA which includes Washoe and Storey Counties
***Recent growth is an annualized rate
Sources: Nevada Department of Taxation; Nevada Department of Employment, Training, and Rehabilitation; UNR Bureau of Business and Economic
Research; UNLV Center for Business and Economic Research; McCarran International Airport; Reno/Tahoe International Airport; Las Vegas
Convention and Visitors Authority; Reno-Sparks Convention and Visitors Authority; U.S. Department of Commerce; U.S. Bureau of Labor Statistics;
U.S. Census Bureau; U.S. Federal Reserve Bank.
Note: NSA = Not Seasonally Adjusted, SA = Seasonally Adjusted
Commerce Real Estate Solutions | comre.com

5. Nevada Economic Conditions
Nevada Economy Continues to Show Uneven Washoe County’s Economy Showing Sluggish
Growth Growth
The Nevada economy continues to show uneven signs of Washoe County’s economy continued to show sluggish
growth. Visitor volume was 2.3 percent higher in March growth. Reno-Sparks employment rose by 1,000 jobs
than a year earlier. Gaming revenue was 10.9 percent (0.5 percent) from February to March. The Reno-
lower in March than a year earlier. Declines were seen Sparks unemployment rate fell from 12.2 percent in
in slot machine play and most table games. Taxable February to 12.0 percent in March. Compared to a
sales were 10.2 percent higher in February than a year year earlier, March visitor volume was down by 5.4
earlier. Statewide employment increased by 8,700 jobs percent. Gaming revenues were up by 0.4 percent over
(0.8 percent) in March. The Nevada unemployment the same period. Residential construction permits held
rate decreased from 12.2 percent in February to 11.9 steady in March, and commercial construction permits
percent in March as the result of employment gains rose from extremely low levels, Table 4.
and reduced labor force participation, Table 2. Nevada Economic Outlook in Brief
Clark County’s Economy Also Showing Uneven Although consumer spending and inventory investment
Growth were strong in first quarter, the pace of national
Clark County’s economy also shows uneven signs of economic growth slipped. Employment growth slowed
growth. Compared to a year earlier, visitor volume in April. Southern Nevada’s tourism and hospitality
was up by 3.1 percent in March. Gaming revenue continue to grow, but gaming fell off the pace in
was 12.2 percent lower in March than a year earlier. March, and other sectors are not contributing much.
Declines were seen in slot machine play and most table In Washoe County, some favorable employment signs
games. Taxable sales for February were 11.1 percent were seen in March. Nevada’s construction shows signs
above those for a year earlier. Residential construction of improving from very low levels.
permits rose sharply from February to March, and
commercial construction permits increased from a
low level. The region’s employment rose by 6,300 jobs
(0.8 percent) from February to March. The Las Vegas
unemployment rate fell slightly, from 12.2 percent in
February to 12.1 percent in March, Table 3.
Issue 16 | ©Copyright 2012 - All Rights Reserved

6. This information is provided compliments of
Michael M. Lawson
President and CEO of Commerce Real Estate Solutions
Commerce Real Estate Solutions
Mike Hillis, SIOR, CCIM 3980 Howard Hughes Parkway, Suite 100
Las Vegas, NV 89169
Managing Partner of Commerce Real Estate Solutions, Las Vegas
Tel (702) 796-7900 • Fax (702) 796-7920
www.comre.com
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at www.comre.com/subscribe This report has been prepared solely for
information purposes. It does not purport
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dedicated first and foremost to our clients. With the industry’s markets or developments contained in
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is to exceed our clients’ expectations through service excellence.
The information contained in this report,
For further information on the Nevada commercial real estate while not guaranteed, has been secured
market, visit www.comre.com or call 702-796-7900. from sources we believe to be reliable.