3 10 2010

In one week, my colleagues and I will return to Las Vegas. Sin City. Lost Wages. Palm sweat. Blackjack. And from what I hear, it hasn’t changed a bit in the last year.

Bright lights. High rollers. Bling. Crooners. Comedians. Whatever. Happens. Stays.

Including the worst recession in 60 years. After three generations of excess, Las Vegas is waking up to one massive headache.

My colleagues and I are presenting papers at a pair of academic conferences, but while we are there, we plan to make the best of it. Professionally-speaking, of course. We are going to shoot lots of video, interview some key people, and visit Gold and Silver Pawn (home of TV’s Pawn Stars).

Sure, Vegas has had a few dips through the years, but none like has been plaguing this desert mecca the last couple of years. With unemployment in Vegas at 14.7% and the most home foreclosures in the nation, it is hardly the place to go if you are down on your luck to begin with.

It was a year ago that ABC’s Lisa Ling shot a feature on the Tunnel People of Las Vegas (click the image below to play the video). If you know Las Vegas fairly well, you can easily tell where the entrance is to these storm tunnels. I ventured out on my bike and found it in a heartbeat (right across the 15 freeway from Excalibur). It is in this subterranean labyrinth that hundreds of homeless people live, hoping that it never rains too much at any one given time.

While the lights are on upstairs, there’s just not a whole lot of money pouring into this community like it did before the recession. And some analysts predict that Vegas may never recover to its heyday, because if we have learned anything during this economic rut, it is that gambling is an extremely discretionary activity. That being the case, a metro area of 1.5 million depending on construction, tourism and gambling may be hard-pressed to reinvent itself. The tourists may still come, but they don’t spend much. They don’t gamble much. And they scrutinize every last online deal to find the cheapest hotel room.

Which means that Las Vegas is going to have to resort to ever more clever marketing.

It was just this week that the new Vdara hotel made the news over its alleged skin-cooking reflected rays of sunshine. While it is highly likely the rays are intense (it is the desert, after all, and all that glass makes for a lot of reflecting), I smell a rat. Not burnt skin. This sounds more like a carefully crafted urban legend designed to get tourists to come check it out. Vegas has never been known for luring people with lame attractions. Add a little fear factor to the script, and this has PR stunt written all over it.

Of course, we have to investigate.

The recession could not have come at a worse time for Las Vegas. Facing competition from over 30 states with legalized gambling, as well as the possibility of legalized internet gambling, would-be customers are faced with a plethora of options much closer to home. Including simply not gambling. My Baby Boomer cohort can see the retirement years not too far in the future, and this is not the time to start gambling the nest egg.

All of which means that the several hundred storm sewer dwellers may find themselves welcoming a slew of neighbors. Not just homeless bums who hitched a ride into town, or whose vehicle broke down on the freeway. No, it could well be people who have lived in Vegas for a while. People who lost their homes to the bank. Who pawned everything of value, and then just ran out of cash.

It’s almost enough to make Wayne Newton cry. Maybe I should send him a Kleenex.

Dr “You Can Bet On This” Gerlich




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