Posted on: June 17, 2022, 07:45h.
Last updated on: June 17, 2022, 08:59h.
A prominent economist says that record-setting gasoline prices could impact travel to Las Vegas, especially those who drive from Southern California. But other factors, such as a rebound in conventions and increased numbers of foreign travelers, may help offset potential drops in visitor volume.
Many who visit Las Vegas from Southern California choose to go by car. The price at the pump could impact their plans, Stephen Miller, director of research at UNLV’s Center for Business and Economic Research, told Casino.org. Especially, there could be a reduction in the number of trips by regular visitors to Las Vegas, Miller predicted.
But, while they are in Vegas, they may spend more than they did on a typical trip before cutting back on trips,” Miller said.
Yet, other factors could offset the drop in visitor volume to Las Vegas due to oil prices. The number of conventioneers and foreigners traveling to Las Vegas had dropped because of the COVID-19 pandemic. Now, both categories of travelers “have reentered the Las Vegas market after a lengthy absence,” Miller said.
“Conventioneers and foreigners could still keep visitor volume increasing, which could offset a decline in per-person spending in the total spending calculation,” Miller predicted.
Price at the Pump
Nevada now has the second-highest average gasoline price in the US at $5.67 for a gallon of unleaded, the AAA reported today. In Las Vegas, the average price for a gallon of unleaded gasoline is over $5.60. It is over $6.02 for diesel.
California now has the highest gasoline prices in the US at $6.42 for regular unleaded. Diesel is at $7.
This could hurt visitor volume to Las Vegas, given that so many visitors come from Southern Cal. In 2018, some 20 percent of visitors came from Southern California, the Las Vegas Convention and Visitors Authority reported.
Last week, Alpine County, a region in California near the Nevada border, saw regular gasoline prices at $7.80 per gallon, Forbes recently reported. That is believed to be the highest of any US county.
Nationwide, regional casinos may also be vulnerable to would-be casino players rethinking driving plans due to rising gasoline prices.
“There are indications people are making adjustments, in terms of revising their vacation traveling and spending less on non-essentials,” Michael Walden, a North Carolina State University economist, told Casino.org about gasoline prices. “Both adaptations could hurt the casino business.”
Last month, a national survey by the American Hotel & Lodging Association (AHLA) revealed that 90% of would-be travelers are concerned about surging fuel costs and inflation.
Owing to higher gas prices, 57% of travelers are likely to take fewer trips, while 54% are likely to cut vacations short to save money, the survey said. Travel may be postponed, too.
Nationally, looking forward to the July 4 holiday, a survey by The Vacationer showed that 50.39%of respondents said that gasoline prices will affect their Independence Day travel plans this year. Residents in states along the Pacific Ocean, such as California, were most likely to say prices at the pump will affect holiday travel plans.
Specifically, 36.99% of those surveyed who want to drive for holiday travel said gasoline prices will affect their plans. Also, 13.40% of those who want to board a plane said fuel prices affect airline holiday travel plans.
As far as flights, Miller said that airfares “are high at the moment.”
“But the bottom seems to drop out of air ticket prices in September,” Miller said. “Rather than visit Las Vegas in summer, some may wait until fall.”
Gasoline Prices Soon May Peak
In addition, Walden expects gasoline prices will peak sometime during the summer.
Gasoline prices also could be impacted if Saudi Arabia decides to pump more oil, Walden said. If the economy goes into recession, driving will drop, and so, too, should gasoline prices, he added.
Miller said that inflation is more persistent than most analysts had predicted in the overall economy.
Russia’s invasion of Ukraine and more importantly, government relief to workers and businesses from the initial pandemic recession, are among the reasons for inflation, Miller said. The Federal Reserve raised interest rates this week by 75 basis points to curb inflation.