Recession Dulls Las Vegas' Shine

The lights are still on, and the slot machines are still clanging, but Las Vegas is taking a hit in this recession. A room that went for $180 a night in October is $99 now. And the hotels that used to go for $99? They, like most of the little guys, are really getting squeezed.

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LIANE HANSEN, host:

The state of Nevada, like the state of Michigan, is highly dependent on one industry. In Michigan, about 22 percent of the workforce depends on auto making. In Nevada, 26 percent of workers are in gambling or tourism. We just heard how the auto industry is doing. NPR's Ted Robbins visited Las Vegas to find out how Sin City is doing.

TED ROBBINS: If you want to know how a town is doing, ask a cab driver. Phil Stout(ph), gray hair, glasses and goatee, talks as we zoom past the neon riot of hotels and casinos along the Las Vegas strip.

Mr. PHIL STOUT (Cab Driver, Las Vegas): That's not a good sign.

(Soundbite of laughter)

Mr. STOUT: When you could drive up and down this street, OK. Normally, you're not supposed to be able to drive up and down here on any night after 9 or 10 o'clock.

ROBBINS: Stout says his business is down 25 percent. You used to have to wait for a cab from the airport to a hotel. Not these days. Hotel occupancy rates are down from a year ago. And so are rates. Jan Jones is a former mayor of Las Vegas. She's now a vice president with Harrah's Corporation, which own seven Vegas hotel casinos, including Caesars Palace.

Former Mayor JAN JONES (Vice President, Harrah's Corporation): We're in a state of crisis because the revenues are down. And these are very big properties that are very expensive to operate.

ROBBINS: A room that went for $180 a night in October is $99 now. And the hotels that used to go for 99 - they are really getting squeezed.

(Soundbite of slot machine)

ROBBINS: Step into the Holiday House, a rundown motel next to the Hollywood Wedding Chapel at the end of the strip. Night manager Irish Jimmy Berry(ph) stops watching TV to show me the guest register.

Mr. IRISH JIMMY BERRY (Night Manager, Holiday House, Las Vegas): Let's see, what did I do tonight? That should be all the way down here. As you can see, there's one, two, three sales, and what's that, total of the day.

ROBBINS: How long have you been there?

Mr. BERRY: I have been working here over 10 years.

ROBBINS: And you haven't seen it this bad since?

Mr. BERRY: Never. No. Oh, no. Oh gosh no, no.

ROBBINS: The Holiday House is charging $35 a night, and it still can't get customers. The drop in visitors to Vegas was 10 percent last month, the largest drop since 9/11. Those who are coming are spending less and not just for rooms. Gambling revenues for October were down 24 percent from last year. Still, the shows go on.

(Soundbite of stage show)

Mr. PENN JILLETTE (Magician, Las Vegas): My name is Penn Jillette. This is my partner, Teller. We're Penn and Teller, thanks a lot. Good night.

ROBBINS: Though many shows are now offering incentives to fill seats.

Mr. JILLETTE: Shows that were absolutely 100 percent - no discount, no nothing, you couldn't even get in to them - are now offering discount.

ROBBINS: Penn Jillette is the talkative half of the magician duo Penn and Teller, which has its own theater at the Rio Hotel and Casino.

Mr. JILLETTE: But I've heard big cheeses in town just saying they've kind of written off 2009; 2009 is going to be a bad year. And I don't mean written off like every casino closes, but I mean like no one better expect it to be up very much.

ROBBINS: The big cheeses may have written off 2009, but the little guys are already suffering. Nevada JobConnect, the state's name for its unemployment office, is packed - two floors of people in lines, in chairs and at computers, looking at job listings.

Mr. BRID BADJUA: I'm looking for hotel, restaurant, hospitality, anything, you know. I worked 22 years, nothing but in hotel industry.

ROBBINS: Brid Badjua(ph) has been out of work since the summer. He says he'll take just about anything.

Mr. BADJUA: And so far, I put like 80 applications and nothing.

ROBBINS: The Culinary Union, which represents most resort and casino workers, says as many as 5,000 of its members have lost their jobs or had hours reduced since the start of the year. Construction workers are faring badly, too. Jeremy Aguero says 54 Las Vegas projects have been canceled or put on hold. Aguero co-owns Applied Analysis, which tracks the Nevada economy.

Mr. JEREMY AGUERO (Co-Owner and Principal Analyst, Applied Analysis): And the scary part, I think, for many businesses is that today may look a heck of a lot more like what normal is than what it looked like in 2006 and 2007, when businesses had geared up for a very unsustainable level of consumer spending globally.

ROBBINS: Dialing back expectations doesn't mean Las Vegas will blow away. It's still reinventing itself to attract visitors. A couple of luxury hotels are under construction or nearly done, Wynn's Encore and the Fontainebleau. And MGM Mirage and Dubai World just secured the last billion to finish the $8 billion City Center, the most expensive private construction project in U.S. history. It's set to open in a year, employing 12,000 workers. Of course, City Center alone will have to find 6,000 customers to fill its rooms and condos. Ted Robbins, NPR News.

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