By most measures, last year was a pretty good one for the Las Vegas tourism industry.
Visitation in 2015 surpassed the record set one year earlier by about 1.2 million people, preliminary figures show, and officials expect this year to raise the bar even higher. What’s more, those same figures also show that other key tourism indicators — room rates, occupancy and convention attendance — ended the year higher than 2014, too.
According to preliminary results presented to the board of the Las Vegas Convention and Visitors Authority this week, 42.3 million people traveled here last year, well exceeding the record 41.1 million who came in 2014. That growth should continue, albeit at a more modest pace: Kevin Bagger, the authority’s senior director of strategic research, presented to the board a forecast of 42.5 million visitors in 2016.
The authority said at the end of last month that visitation had passed the 42 million mark in 2015, but the preliminary figure presented by Bagger was the first time it disclosed a more specific number.
Bagger originally anticipated that 41.6 million visitors would come to Las Vegas in 2015, an expectation that he at one point thought might be too “aggressive,” he said Tuesday.
And there was plenty of growth to go around.
The preliminary presentation indicated that the citywide average daily room rate rose more than $3 to $120, while revenue per available room grew nearly $4 to $120, occupancy rose one point to 87.8 percent and convention attendance swelled 13 percent to 5.9 million.
Citywide room inventory actually dropped slightly, which makes sense given that the Riviera closed in May after it was purchased by the convention authority. The resort, which offered about 2,000 rooms, is set to be demolished this year as the authority gets ready to replace it with more convention space.
Record visitation levels aside, the industry generally has yet to return to some of the big figures it reported before the recession hit, but the early numbers nonetheless indicate that Las Vegas has benefited from a broader economic recovery.
“I don’t think there’s any single thing you can point to other than, hey, the economy has gotten a little bit better, people are more stable,” said Brent Pirosch, director of gaming consulting at CBRE’s Global Gaming Group. “It’s just the slow, steady progress we’ve seen nationwide.”
Visitation in particular has seen a generally consistent upward trend in Las Vegas over the years. According to data analyzed by Pirosch, visitor volume increased at an average annual growth rate of slightly less than 1 percent from the 2005 fiscal year through the 2015 fiscal year. As in other areas of the tourism industry, the number of annual visitors dropped a bit amid the recession, but it has more than rebounded since then.
Even as Las Vegas welcomes more tourists than ever before, however, gambling on the Strip still struggles to return to its pre-recession peak.
The average annual growth rate for gaming revenue on the Strip was 1 percent from the 2005 fiscal year through the 2015 fiscal year, according to Pirosch. But that’s skewed a bit by baccarat, a game favored by a relatively small number of high rollers. Excluding baccarat, gambling revenue’s average growth is actually down slightly over the same period.
In just the most recent fiscal year alone, the Strip’s gaming revenue dropped 2.5 percent, and Clark County and the entire state were down less than 1 percent, according to the Gaming Control Board. Yet total revenue was up about 3 percent in all three areas, thanks to continued strength on the nongaming side.
That hammers home a point that most in tune with Las Vegas tourism have known for a long time: Gambling is no longer king.
In the 1984 fiscal year, gambling accounted for more than 58 percent of the revenue at Strip casinos with more than $1 million in gross gaming revenue; it’s now less than 35 percent. Generally speaking, most Americans don’t need to come to Las Vegas to gamble anymore — it’s about everything else, and the slot machines are something of an added bonus.
“If you can gamble at home, your trip to Vegas is a destination visit,” Pirosch said. “The primary purpose isn’t necessarily to game.”