Las Vegas Is Betting on the Return of Boom Times

Buoyed by a record 14 million visitors and soaring hotel occupancy, Las Vegas resorts are gambling $282 million that the boom is back for this city’s lifeblood tourism industry.

The noise of construction equipment competes with the round-the-clock clamor of the city’s casinos, the steady din signaling that the boom is returning to a town that has suffered through economic doldrums in the early 1980s.

Gaming executives admit that they may never again see the 15% growth rate that provided unprecedented expansion in the 1970s. But an 8% growth rate this year has gaming executives cautiously optimistic--and willing to gamble heavy money that the good times will continue.

Nearly 60,000 Rooms

The addition of 4,500 hotel rooms at five resorts will push the city’s hotel and motel room total to nearly 60,000.

“The strong operators are getting stronger and the weak are getting weaker,” Glenn Schaeffer, senior vice president of Circus Circus Enterprises Inc., said. “We expect a real solid growth rate over the next several years.”

With visitor volume and gaming revenue each up about 14% over a year ago, airline traffic up 8.8% and hotel occupancy running at a national record of more than 80%, gaming executives say marketing is a key to the new boom.

Many resorts are turning to the proven formula of Circus Circus, aiming at the middle-income gambler and families in an effort to court an untapped market and establish an identity with future customers.

Target of Marketing

“The casinos are now looking for middle-class patrons even more so than the high-rollers,” said David Christianson, professor of tourism and hotel administration at the University of Nevada-Las Vegas. “Even such traditionally high-roller hotels such as Caesars Palace and the Riviera are concentrating more of their efforts on the middle class.”

R&R; Advertising, the agency that handles the Las Vegas Convention and Visitors Authority’s advertising and promotion, has fashioned the theme “Las Vegas: The American Way to Play.” The agency is headed by Sig Rogich, one of three key members of The Tuesday Team that handled President Reagan’s reelection advertising campaign.

An example of the growing family emphasis was witnessed last summer when Wet ‘n’ Wild, a $15-million water theme park on the Las Vegas Strip, drew 300,000 customers in its premiere season. The opening-season figures were higher than at sister parks in Orlando, Fla., and the Dallas-Fort Worth area.

Christianson said competition from Atlantic City has not hurt Las Vegas as much as some thought it would. And he said the impact of some state lotteries, such as in California, has had little impact on Nevada’s main industry--gambling.

A Different Kind

“That’s because they’re two different forms of recreational activity,” Christianson said of the state lotteries.

If anything, lotteries are helping gambling become an acceptable form of risk recreation, Christianson said.

William Eadington, an economics professor at the University of Nevada-Reno and a longtime gaming analyst, said Atlantic City took away some of Las Vegas’ East Coast customers two years ago “and it flattened our growth for a couple of years.”

“But we seem to be getting back to a healthy growth rate,” Eadington said. “There was a real concern in the first part of the 1980s that Las Vegas’ growth would come to an end. Now the feeling seems to be that, no, it won’t.”

Major expansions are currently under way at five hotels. They include:

-Circus Circus: A $60-million expansion is scheduled for completion in April, adding 1,188 rooms to the family-oriented Las Vegas resort. The latest addition will give Circus Circus 5,027 rooms and 240,000 square feet of casino space in Nevada. Included are 2,793 rooms in Las Vegas, 1,625 in Reno and 609 in Laughlin, Nev.

-Flamingo Hilton: A fourth tower scheduled for completion late next year will add 500 rooms, increasing the total to 2,920 rooms. The $62-million addition will make the resort the second largest hotel in the world, just 200 rooms shy of the Las Vegas Hilton a few blocks away.

-Tropicana: A $70-million, 808-room tower is scheduled for completion early next year.

-Golden Nugget: A 21-story, $50-million 976-room tower is under construction at the downtown resort that is challenging the lock on coveted high rollers that was once held by casinos on the Strip and in Atlantic City.

-Imperial Palace: An 800-room, $40-million tower is under construction that will make the resort the fifth largest in Las Vegas.