Las Vegas business booster Danielle Casey is well aware that officials have long sought to wean the local economy off its dependence on tourism.
Now, the group she leads has drawn up a plan for how it will try to diversify the employer base in Southern Nevada — a casino-heavy region with a track record of economic booms and busts.
The Las Vegas Global Economic Alliance released its three-year strategic plan last month. In the 32-page document, it describes how it aims to reduce Southern Nevada’s dependence on leisure and hospitality employment by boosting the share of higher-wage sectors in America’s casino capital.
Its plan includes concentrated industry recruitment, stronger connections with brokers and site selectors, and increased support for existing businesses.
“At its core, the strategy recognizes that Southern Nevada’s economy remains heavily concentrated in leisure and hospitality, leaving the region vulnerable to economic disruption and limiting long-term wage growth and resilience,” the document says.
‘Make us more resilient’
The LVGEA, one of several regional authorities contracted by the state to fuel economic development in Nevada, named Casey its president and chief executive last year. The group has 12 staff members and, according to Casey, a current annual budget of $3.9 million.
Overall, the intent of the new plan is “to do what we’ve been talking about forever … which is diversifying the economy and diversifying the economy away from tourism,” Casey said in a recent interview.
The group does not want to diminish Southern Nevada’s main financial engine, she said, but rather add more-diversified sectors “to make us more resilient.”
All told, Southern Nevada relies heavily on visitors traveling here to spend big eating, drinking, gambling, partying and going to shows and conventions to fuel the local economy.
Around 26 percent of the Las Vegas-area workforce was employed in leisure and hospitality as of May, by far the largest single concentration in any industry locally, according to U.S. Bureau of Labor Statistics data.
Plus, this doesn’t account for all the people who work in other sectors and feed off the tourism industry — including, for instance, construction firms that get hired to work on projects along the ever-changing Las Vegas Strip.
Not ‘super healthy’
Nevada’s unemployment rate in May, 5.2 percent, was tied for third highest in the country with Oregon and Washington state, according to federal data.
But over the past year, total employment statewide rose 1.8 percent, the fastest job-growth rate in the nation, according to the Nevada Department of Employment, Training and Rehabilitation.
The state reported national-leading percentage gains in several sectors, including information, professional and business services, and health care and education. Plus, it noted that Nevada’s overall job growth had outperformed the rest of the country for 11 consecutive months.
“This trend is being driven by a diverse set of industries, sustaining job gains despite softer performance in the leisure and hospitality sector,” DETR chief economist David Schmidt said in a recent news release.
Locally and nationally, personal finances have been squeezed this year by higher gas prices and rising inflation. Tourism levels in Las Vegas are effectively flat, with visitor volume this year through May up 0.3 percent from the same five-month stretch last year, according to the Las Vegas Convention and Visitors Authority.
Las Vegas consultant John Restrepo, owner of RCG Economics, said in April that overall job numbers were “decent” but that the economy was not exactly “super healthy.”
Still, altering the makeup of an economy cannot be done overnight. In its planning document, the LVGEA published excerpts from a consultant survey, including comments that Southern Nevada has a lack of skilled and knowledgeable workers.
Nonetheless, the alliance aims to boost employment in advanced manufacturing, technology, business and financial services, health and life sciences, and creative industries, the document shows.
Big swings
Of course, Las Vegas has long been a tourism town, though its dependence on this industry outweighs other metro areas that are also known for getting steady streams of visitors.
According to federal data, the leisure and hospitality sector accounts for about 20 percent of the workforce in Orlando, Florida; 14.4 percent in New Orleans; 11.7 percent in Nashville; and 9 percent in New York City.
Las Vegas’ reliance on outsiders’ discretionary spending has left the region prone to extreme ups and downs.
As seen over the years, when the U.S. economy is doing well, Las Vegas heats up — but when the national economy gets hurt, the financial pain in Southern Nevada can be especially brutal.
For instance, the U.S. unemployment rate was 3.5 percent in February 2020 but shot up to 14.8 percent that April, during the first full month of pandemic shutdowns.
In Las Vegas, the jobless rate was around 4 percent in February 2020 — and then skyrocketed to 34 percent in April 2020.
Locally, the unemployment rate was back down to 5.3 percent this May, but it was still third highest among the 50-plus largest metro areas in the nation, according to federal data.
‘We kind of forget’
Las Vegas’ tourism industry has been basically growing nonstop for decades, with bigger, flashier resorts getting built and an ever-growing roster of places where visitors can spend time and money outside the casino floors.
Over the last several years, pro sports in particular has established a big and growing presence in Las Vegas, although from a data standpoint, entertainment jobs are counted among the leisure and hospitality sector.
Southern Nevada’s population has also been growing fast for decades, and industries besides tourism have also expanded, including manufacturing, professional and business services, and education and health services, federal data shows.
During the Great Recession, when Las Vegas’ economy was devastated by the real estate crash and broader financial meltdown, Nevada lawmakers ramped up their efforts to make the economy more resilient by establishing the Governor’s Office of Economic Development in 2011.
Its board votes on tax-break applications by companies looking to do projects in the state, awarding financial incentives to manufacturers, distributors and others.
But overall, in Las Vegas, tourism is still by far the biggest moneymaker in town.
Casey, of the LVGEA, indicated that a more-diverse employer base will help Southern Nevada withstand future economic slumps.
But she also described the current situation, with Las Vegas’ heavy concentration in one industry, as a structural issue.
“Every time we have a downturn, we go, ‘Oh my God, the sky is falling, this is horrible, we need to figure this out,’ and then things get better and we kind of forget about that,” Casey said.
Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342.
