In charge of attracting tourism to Las Vegas, what is he doing to counter its decline?

Steve Hill, CEO and President of the Las Vegas Convention and Visitors Authority, joins us this week on Nevada Week.

♪♪ Support for Nevada Week is provided by Senator William H. Hernstadt.

-Welcome to Nevada Week.

I'm Amber Renee Dixon.

The number of people that visited Las Vegas in June is down 11% this year compared to the year before, marking the sixth straight month of year-over-year decreases in Las Vegas visitor volume.

That's according to the Las Vegas Convention and Visitors Authority, also known as the LVCVA.

The governmental entity promotes and attracts tourism to Las Vegas and, in a June report, said the year-over-year decrease reflected the, quote, broader backdrop of persistent economic uncertainty and weaker consumer confidence, compounded by a slower convention month.

So how is the LVCVA responding in order to support the tourism industry that employs more than 26% of Southern Nevadans?

For that, we bring in Steve Hill, President and CEO of the LVCVA.

Steve Hill, welcome back to Nevada Week.

-Thanks, Amber.

-When we last had you on, it was before the inaugural Las Vegas Grand Prix.

And we just learned on Tuesday that that race is going to continue for two more years, 2026-2027.

We'll talk about that ahead, but I want to start with what your take is on the state of tourism in Las Vegas.

(Steve Hill) Well, as you quoted from us, you know, there's this backdrop of concern by our customers around the country regarding their jobs, the state of the economy, their personal finances.

And at the core of the decline-- and it's a lull.

I mean, Vegas is going to be fine long term, but at the core of that decline is that concern and that hesitation.

-Okay.

So you say "a lull."

But let's say that the tourism industry here in Las Vegas was as bad as some of the headlines are suggesting.

The SFGate, for example, has an article called "'Has hell frozen over?

': Las Vegas tourism is in trouble."

Let's say-- -Let's not say that.

[laughter] -Okay.

If that were true, if it were that bad, would you even acknowledge it?

-Of course.

The numbers speak for themselves.

We've had a lull over the beginning of the year, and it's more pronounced in the summer, largely because during the summer, we rely more on a leisure tourist than we do the business community, than our sporting events.

And so it's a little bit more pronounced in the summer.

But it is not the end of Las Vegas.

-But if it were that bad, would you even admit that?

I mean, what advantage would you have in that position?

Or would you make it sound like things are better than they are?

-It's a hypothetical that can't exist.

Las Vegas is a place like no other.

We all know that.

This place offers something that people want to participate in, everybody wants to be here, and it is unmatched across the country.

So I wouldn't have to admit it, because it's not possible.

-Okay.

Let me run this quote by you from, well, yourself.

You were speaking to a group of commercial real estate agents.

You said, "Visitation is down about 7-ish percent."

This was back when you had May numbers only, not the June numbers.

"ADR, Average Daily Room Rates, are also down, and revenue per room is down 14%.

That's the largest drop we've seen year over year, month over month this century, other than in a crisis."

That, to me, makes it sound really bad.

-Yeah, and it's, it's not.

I mean, I've said this a lot, too.

I'm old enough to remember when we had normal business cycles.

This was back in the '70s, '80s, early '90s.

We haven't had a normal business cycle in 30-35 years.

We have had crises.

And that's this entire century.

We have had a crisis, or we have been recovering from those crises.

So we had a dot-com bust.

We had 911.

We had a Great Recession.

We had Covid.

And in between those, we were recovering and growing.

And so if you eliminate all that, you eliminate almost all the time in this century.

So just the normal ups and downs, we haven't seen this century, which is why that point kind of stands out.

-Prior to the position you currently hold, you were Director for the Governor's Office of Economic Development, an office you created.

And then before that, you had your own company--I think you moved here to Las Vegas in 1987--Silver State Minerals?

-Materials, yes.

-Materials.

And what was that business?

-I was in the ready-mix concrete business.

-Okay.

So I say all of that because, with that expertise, I wonder what you think about the possibility of a recession.

Is the United States headed toward a recession?

-Well, it's hard for me to say.

I mean, you know, the pure definition of a recession is six months of negative growth.

Doesn't-- We don't appear to be in that right this minute.

There's a little bit of disconnect between, I think, you know, the stock market and the overall national growth and how quite a few people feel about the economy in the United States.

And that's been going on for more than just this year.

We started to see that disconnect in early '24.

And so we've seen it for almost two years now.

It's just exacerbated over the last number of months.

-Okay.

As I mentioned, the LVCVA is pointing to economic uncertainty, weaker consumer confidence, and a slower convention month.

But there are industry experts across the country and here locally who say high prices play a big part.

Nevada Week recently collaborated with Nevada Public Radio for a show on this very topic.

Here's some of what was said.

(Anthony Curtis) Let me tell you, it's nice to be on your show, but this is one of many that I have been on recently talking about, specifically, the gouge.

And they're talking really about, about the Strip casinos, more than anything, them having their hand in your pocket for elevated prices and fees.

What they hate most is the fees, whether it be resort fees, parking, you know, you pay extra for a good seat in a restaurant now.

On and on, they just keep inventing them.

(John Katsilometes) The gouge is a thing.

You know when you walk into a casino floor, I've had people who have been entertainers in the city for a long time saying they're hearing from tourists when they come into a hotel casino that they've spent $100 before they do anything, before they see a show or anything.

(Mike Prevatt) And speaking of Uber, we actually have an Uber driver on the line.

He's got some feedback for us.

Josh from Las Vegas, welcome to State of Nevada.

(Josh) Thank you.

I'd like to say I do multiple rides, 25-30 rides a day, up and down the Strip, a lot to the airport.

And the major sentiment I'm hearing a lot of is that Vegas is becoming too expensive.

Two to four times a day, I'll hear someone say, I'm not coming back until I know it's going to be cheaper.

-Do you want to react to any of that?

-Well, we've certainly seen and heard that kind of drum beat that's out there.

To say that that is the predominant reason we're having the downturn right now is incorrect.

It's just not right.

You can see tourism issues across the country.

It is based on consumer sentiment drops.

It's based on international policy.

It's caused Canadian visitation to drop pretty significantly.

We're having to overcome that.

But Las Vegas, we talk about reinventing ourselves, and the reason that that happens is the competitive nature of the city.

We've got dozens of properties out there that are also hearing the feedback from their customers.

And to the extent that their customers aren't happy about something, they have the opportunity to adjust what they're doing and react to that.

And you're seeing that happen.

So this is the kind of environment that drives the next wave of innovation, the next response from our properties, and just makes Las Vegas better.

-What is the LVCVA doing when you hear those kind of complaints of high prices?

What do you do?

-Well, we do more in-depth research than just listening to anecdotal complaints.

And we're in the process again.

I mean, we do that on a regular basis.

We announced yesterday at our board meeting that we're doing a deep dive into the value proposition of Las Vegas, and we'll research that.

We will share that with our resort partners so that they can see what that reaction is on a bigger scale that is more statistically significant.

That's important.

We are leaning into our partnerships with the OTAs, the Expedias and the Bookings of the world.

We are letting people know in a variety of different ways what the value proposition of Las Vegas really is.

The idea that we are more expensive than other destinations... You can pick a place to be in a series of things to do here that would make that true, but there are all kinds of offerings where that's not true as well.

Las Vegas is still a value, and there are a number of ways to experience the city and the offerings that we have.

We're getting that out there as well.

-I have to ask about the resort fees and the parking fees.

There was an article in the Review-Journal 2019.

The headline is, quote, "Some Las Vegas Resorts Cutting Fees as Visitation Declines."

2019.

And in the article, an LVCVA spokesperson is quoted as saying, "We believe it is premature to state that resort or parking fees are directly resulting in a net decrease in overall visitation.

Okay, so it's been six years since then.

What do you think about the relation between those fees and visitation?

-I don't-- I don't think at this point those are the issue.

Part of the reason for that is they are now published.

I mean, they're required to be published.

You can't publish a room rate without publishing the resort fee.

-That was a recent development.

-It is.

Well, but that's all of this year.

And so that issue, I think, is actually gone.

People continue to go back to it, but if you go anyplace, you pay a resort fee.

I've traveled a number of places over the past couple of months, and our resort fees are certainly competitive at a minimum with what you pay in other locations.

Our parking is way more competitive than you pay in most locations.

I was in a place in Southern California just this weekend.

Parking overnight was $60.

It's a very common charge.

I don't think those are the issues at this point.

-Okay.

Higher prices are related to inflation.

The latest US inflation report was that it was unchanged in July.

But it's been an issue, not just for visitors, but the hotels and casinos that are catering to them.

I'm wondering about tariffs, though, and have you heard from any of the properties about how tariffs are impacting them, if at all?

-Well, most of the tariffs were not put in place until just the last few days, and we're getting more clarity around what those tariffs are going to be and how much is-- what the percentage is going to apply to each kind of product and then from each location.

Where they're, I think, going to have and have had an impact on us, I'm sure, on the properties as well is--and anybody looking to build--the idea-- The tariffs are going to affect the construction process quite a bit.

And then you look at the supplies that people need and buy.

We're just learning what those are going to be.

And so, you know, if they're there, they're going to add costs.

That's just the way that is going to work.

We also take very good care of our workforce here in Las Vegas.

The majority of them are unionized.

Union contracts that have been negotiated over the past couple of years have added some pretty large costs to the service provision in the destination as well.

So we're having to take that into consideration as we look to price things in Las Vegas.

-Tariffs are also being blamed for a drop in international tourism, just one of several policies from President Trump's administration that some view as unwelcome to international visitors.

Other policies, a $250 visa fee and then a crackdown on immigration that has resulted in reports of tourists saying that they are getting detained at the airport or detained at the border or even turned away.

Some Republicans would counter, That's the price of keeping our country safe.

But how big of an impact do you think those policies are having on tourism here?

-Well, I think they are all having an impact.

What hasn't had a lot of conversation is the concern around the ICE raids and I think a reduction in travel and stay in our properties that we've heard anecdotally.

We don't really have statistics on the depression of travel by those concerned.

We do see that folks, particularly in the drive market, are staying more with friends and family than they are--but we're counting those as visitors.

They're just not staying in the hotels as much as they were.

And those numbers are up, staying with friends and family, pretty significantly.

-There has been a decrease in tourism from Canada.

But what do you know about Mexico?

I didn't look up those numbers.

-Actually, travel for Mexico has been really healthy.

It's up nearly 15% for the year.

Our international travel is actually about flat.

Canada is down 20%.

Maybe even a little more now.

But the rest of our international travel has been up and has pretty much balanced the effect that we've seen from Canada.

-Before we talk more about Canada, has there been any impact-- The national crackdown on immigration, has that impacted the workforce of the casinos?

Have you heard anything about that?

-I have not heard that directly.

I've heard that anecdotally in terms of some of the service providers to the hotel casinos.

-How so, or can you elaborate on that?

-Well, what I'm saying is I have not heard that from the casinos in terms of their employees, but the companies that provide services at times have struggled because of that.

-And their struggles are due to...?

-The concern on their workforce and being able to show up for work.

-Okay, all right.

Back to Canada, which made up, let's see, 48% of arriving passengers from a direct international flight last year, 48% Canadians.

I have the number right here if you want to look.

How do you counter that drop in tourism?

I mean, big numbers.

June, for example, from WestJet, a drop of 31.2%; Air Canada, 33.2% when compared to the year before.

-Well, we are staying in touch with our friends from Canada, and we've got a great relationship with Canadians.

They want to be here.

I'm going on a sales mission in Western Canada in a couple of weeks.

So we're, you know, we're going to continue to do that, but that's an issue that is a national issue that, frankly, we're not going to be able to overcome right now directly with Canadians.

Going to continue to invite them when they're ready to come and continue to invite everybody else.

-Why can you not take care of it right now?

-Well, it's a national issue.

They're angry at the United States.

They're not-- This isn't a Las Vegas/Canada issue.

This is a Canada/US issue right now.

-Right.

And so how do you combat that when the President of the United States is saying, I'd like to make Canada the 51st state?

-Well, as I say, we're just continuing to maintain the ties with Canada, continue to invite them to come when they're ready.

Understand that right now, they need to make a statement, and it's the way it is.

And that's what we can do.

-So what will your messaging be like when you go there?

What are you going to say?

-We love you.

We want you to come back.

We're ready whenever you are.

-And you'll be traveling around to where?

-Yeah.

On this trip, it's, it is the western part of Canada.

It's Vancouver, Calgary, Edmonton.

-Okay.

-And by the way, we'll talk hockey, because coming back to watch the Oilers or the Flames play, play the Knights is a great attraction.

-Has that boosted tourism from Canada?

-We think so, yes.

-Perhaps as the hockey season starts?

-Yeah, absolutely.

-And you do keep mentioning that this is a national issue, this drop in tourism.

The World Travel and Tourism Council said that the US is on track to lose a staggering $12.5 billion in international visitor spending this year.

Its president said, in part, "While other nations are rolling out the welcome mat, the US government is putting up the closed sign."

How much do you agree with that or not agree with that?

-Look, from a tourism standpoint, the policies in DC have not been helpful.

You mentioned the visa fees.

It's hard to get to the United States, and we are making it harder.

That's not helpful.

We think that it's important for that to change.

The argument that you made about, These are the prices that we pay for things that are not tourism related, okay, that's a valid argument.

People can have that.

That's not an area we're addressing.

We're just saying that there is an impact to the, to the policies that have been put in place.

-Yeah.

A Republican strategist that I spoke with said the stop sign, or the closed sign, is a closed sign for illegal immigrants.

-And that's, that's true.

I understand that.

But there is also the sudden impact that it is having on the industry and on the financial situation for a number of people.

And I think it's affecting the economy of the country.

-Does the LVCVA reach out to the Trump administration to let them know what's going on?

-We reach out through our representatives in DC, and we are also, for example, strong members.

And, you know, Bill Hornbuckle right now, the CEO of MGM, is the chairman of US Travel, which is the organization that represents the travel industry in DC.

-As I mentioned at the beginning of the show, when we last had you on, it was before the inaugural Las Vegas Grand Prix, the F1 race.

We are now 100 days away from the third race here in Las Vegas.

And on Tuesday, the LVCVA Board of Directors voted to sponsor the race for two additional years at a cost of $20 million.

We're going to talk about why ahead, but let's first look back.

Year One of the race had its problems, but there were improvements in Year Two.

Here's what Alan Snel, Publisher and Reporter of LVsportsBiz.com said about that when Nevada Week recently teamed up with Nevada Public Radio.

(Alan Snel) Year Two was a huge improvement.

They did a lot of the preparation and installment of the equipment overnight, so the traffic problems decreased.

And you're going to probably see a, probably a smaller increase in terms of the time, in terms of the ability to install the equipment, the fencing.

Keep in mind that when you build an F1 track, it's basically a 3.8 mile stadium.

And this is the classic winners and losers: The hotels on the circuit do better than usual that weekend, but the small guys get crushed.

And if your business is not related to the race, you will lose money that weekend.

-Do you want to react to that?

-The Formula One race is on the weekend and will be on the weekend before Thanksgiving every year.

And it is a historically low weekend in terms of tourism.

It has made a huge difference across the destination because we have that race that weekend.

Alan was right, we've had, we had problems the first year.

We are working to correct that.

We don't want this to be a trade-off, and we are making progress on making sure that's not the case.

You know, we're now sponsoring, for example, the Neon City Festival downtown, and it's changed the outlook for that weekend for downtown and all those businesses down there.

So we'll keep making improvements to the race itself and improvements to the impact on the community.

-And the small businesses that he's referencing, what has happened with them?

They claim that the infrastructure that was put in blocked off their normal foot traffic, and they lost a bunch of money.

-Formula One's made a lot of progress working with those local businesses.

I think the ones that are right on the circuit right now, for the most part, feel like now the race is going to be a benefit to them.

I don't actually know, other than maybe one or two smaller businesses that have expressed concern, other than that.

-Okay.

In Year One, Clark County reported that it actually lost some money on the event.

It did get tax revenue, 3.8 million in tax revenue, but the staff reportedly spent more than 17,000 hours performing race-related work, and the bill for that was 4.4 million.

So they were in the red.

Has that been corrected?

I didn't see anything about that in Year Two.

Any reporting on that?

-Well, you know, the amount of tax revenue that was generated for state and local governments last year was $45 million.

That's going to get distributed a little differently.

Clark County is not really in the business of making money; they provide services.

A part of those services are provided for the Formula One race.

The first year was the most difficult race.

We were building this from scratch.

It took way more hours for the County, for us, for a lot of-- everybody involved, actually, to design the first year.

Second year was much easier.

It becomes, starts to be a routine.

Third year is going to be even better than that.

As we build the race this year, we'll use two crews to do it instead of one, which will cut by three weeks the amount of time that we have to be in construction for the circuit.

All of that saves everybody involved time and money.

-What else has gone into the improvements?

-Well, I mean, there's so many topics that are involved.

-One, for example, price.

-Sure.

The ticket pricing this year has been reduced by about a third.

It makes it much more accessible for a broader variety of people.

But it's also, I think--and we've seen this already--accelerated ticket sales.

And so that is going to increase paid attendance at the race.

It's going to make the race better for Formula One, but it will also make it better for the community.

-And then what about the workers on the Strip?

I understand that the LVCVA is paying for part of that transportation?

-We are, yes.

-How does that work?

-Yeah.

We pay both to rent parking and busses in order to get people in and out of the circuit.

We provide the monorail for the workforce to get in and out of the circuit.

They can park at our parking lots and get on the monorail there.

So that's just a part of what we do as a part of that sponsorship.

-And Clark County has sometimes made it seem that they have the final say of approval on this race, whether it gets to go forward, especially after that first year.

Have they approved this new two-year deal?

-They have the responsibility to provide a-- or make the decision on whether to provide a road closure permit.

And that has to be issued each year.

And so Formula One works with the county.

And that's what those hours were all about, in a number of different ways, but that's a part of it.

And they have not issued that permit this year yet, and they won't probably until October or so, because they want-- -For this year?

-For this year, yeah.

And that will be the same situation for each of the upcoming years.

-Okay.

Steve Hill, President and CEO of the Las Vegas Convention and Visitors Authority, thank you so much for joining Nevada Week.

-Thanks for having me.

-And thank you for watching.

For any of the resources discussed, go to vegaspbs.org/nevadaweek, and I'll see you next week on Nevada Week.