Southern Nevada’s dependence on tourism has been common knowledge for years, but a new report suggests that it’s the most tourism-dependent economy in the United States.
In the report, “The Relative Dependence on Tourism of Major U.S. Economies” by Applied Analysis’ principal Jeremy Aguero, six indexes measuring the tourism economy were compared among 23 metropolitan statistical areas, including the nation’s 15 largest areas and eight well-known tourism destinations.
The Las Vegas area ranked first, second or third in five of the six comparisons, and in the sixth index, it ranked fourth out of the 23.
Two other cities that could vie for the title of most dependent on tourism, not surprisingly, are Orlando, Fla., and Atlantic City.
Orlando had the most annual visitors with 48.9 million in 2007. Las Vegas had 39.1 million in 2008. Atlantic City, meanwhile, had the nation’s most annual visitors per capita.
“Orlando’s 48.9 million annual visitors translate into 23.8 visitors per capita,” Aguero said in his report. “That said, leisure and hospitality account for only 10.2 percent of economic activity, and leisure and hospitality employment accounts for 18.9 percent of Orlando’s workforce.
“Atlantic City ranks first nationally in annual visitors per capita at nearly 78 as well as visitor spending, and leisure and hospitality gross domestic product as a percentage of gross product. That said, Atlantic City is also a much smaller economy with the lowest employment base and population among the 23 comparable regions,” he said.
Breaking down the indexes and where Las Vegas ranks builds the case that our city could be the nation’s most tourism-dependent, he explained.
“No matter how the data are carved or the final rankings ordered, Southern Nevada’s economy is remarkably dependent on its tourism sector,” Aguero said in his conclusion. “This dependence appears to have lessened during the past decade; however, the region remains among the most tourism-dependent in the nation.”
The report is the latest to highlight Southern Nevada’s need to diversify its economy.
The Lied Institute of Real Estate Studies at UNLV recently completed a report that made the same point. It emphasized strategies many business leaders have suggested for years, including a call to offer more incentives to companies to build and invest in Nevada. The state’s Economic Development Commission has a system in place to offer economic incentives to companies considering moves to Nevada. Most of them involve tax credits.
The commission, incidentally, is under the purview of the lieutenant governor’s office, which also oversees the Nevada Tourism Commission.
The privately operated Nevada Development Authority also markets Southern Nevada as a home for companies considering moves and streamlines the process by pointing an executive’s team to the right government agency or to the people who can help accomplish the moves.
Business leaders say the state needs to make a greater investment in diversifying the economy, that the state needs to spend money to ensure a healthy economic future, one that will be better able to withstand future recessions.
But with the state facing a revenue deficit of hundreds of millions of dollars, where would the money come from?
State lawmakers last year approved diverting room tax money to state transportation projects. One idea is to split some of that revenue between transportation needs and economic development efforts.
The Las Vegas Convention and Visitors Authority would likely oppose such a move, however. The authority was unhappy about money being diverted to transportation.
Although there are still transportation needs and a case can be made that funding roads and highways benefits tourists as well as residents, the area’s economic stability is equally important.
For a city to be overly dependent on any single industry is a dangerous strategy and it may take the tourism industry to make the area stronger by allocating resources to building a well-rounded Las Vegas Valley.